Malaysia will eliminate almost all tariffs on processed foods.
According to Tim Wilson, director, IP and Free Trade Unit and Climate Change Policy, Institute of Public Affairs, Melbourne, the agreement will open massive economic opportunities within the Malaysian market for the sale of fresh food and dairy products at affordable prices.
He said, "The benefit for Australian exports is to increase their access to the Malaysian market and provide affordable food that can be used to make processed foods for Malaysian domestic consumption and export."
Wilson also stated that cheaper Malaysian inputs into processed foods would enable the country's food industry to compete in the international market and that there may need to be very minor adjustment for the Australian food industry, but it will benefit from the free trade.
The Australian Food and Grocery Council (AGFC) agreed that the country's food and grocery manufacturing sector, estimated to be worth about 108 billion Australian dollars, will benefit from the agreement.
Geoffrey Annison, acting chief executive, AFGC, said, "This agreement will allow food and grocery manufacturers to continue to innovate and explore new markets while maintaining a competitive manufacturing base within Australia."
"The industry looks forward to supplying safe, high-quality nutritional products for what is potentially a very large growth market," he said, adding that to really take advantage of the Malaysian opportunity, the Australian government still had to get their policy settings right to support the industry's competitiveness.
Welcoming the arrangements that would make it eaier for exporters to enter the market via a simplified declaration of origin documentation, Annison emphasised that the arrangements would not translate into any lowering of Australian food import standards.
He stated that Australia has high quarantine standards surrounding food imports irrespoective of where they are from, adding that the issue is politically sensitive and categorically stating that Malaysia wouldn't be exempt from the rules.
However, Annison added that as long as they are treated and packaged in the appropriate manner, they should not be a barrier to entry or add unnecessary costs.
