WTO Trade Agreements
As agreed upon earlier in 2011, the India-Malaysia Comprehensive Economic Cooperation Agreement (Ceca) came into effect on July 1, 2011.
The Ceca encompasses liberalisation of trade in goods and services, investments and other areas of economic cooperation, as per a statement from the Ministry of External Affairs (MEA). Trade between the two countries had inched to $10 billion in 2010-11, depicting a rise of 26% from 2009-10.
The first review of the Ceca will be held within a year of it coming into force. This is India's fourth Ceca, after Singapore, South Korea and Japan. The specifications under India-Malaysia Ceca inches a step beyond the India-Asean FTA commitments, which was implemented by both countries last January.
Under this Ceca, the items on which India has obtained market access from Malaysia consist of basmati rice, mangoes, eggs, trucks, motorcycles and cotton garments, which are all items of considerable export interest to India. Meanwhile, adequate protection has been provided by the Indian side for sensitive sectors such as agriculture, fisheries, textiles, chemicals and auto, as per the agreement.
Both countries have provided commercially viable commitments in sectors and modes of interest to each other which should result in enhanced services trade. Such a pact among South Asian countries is strategic, because it forms an MoU among them on various related issues.
The agreement promises to effect movement of business people, including contractual service suppliers, and independent professionals in commercially meaningful sectors, which include accounting and auditing, architecture, urban planning, engineering services, medical and dental, nursing and pharmacy, computer and related services and management consulting services.
Sectors such as accounting and auditing, architecture, urban planning, engineering services, medical and dental, IT and ITeS, and management consulting services would get Malaysian market access.
India-Malaysia Free Trade Agreement: Analysis of the Advantages and Disadvantages
Free Trade Agreement (FTA) - A free trade area (FTA) is a trade bloc whose member countries have signed a free trade agreement (FTA), which eliminates tariffs, import quotas, and preferences on most (if not all) goods and services traded between them. It can be considered the second stage of economic integration. Countries choose this kind of economic integration if their economical structures are complementary. If their economical structures are competitive, they are more likely to form a customs union.