"Free Trade Agreement Between the Government of the Republic of Turkey and the Government of Malaysia” entered into force on 1 August 2015. The Agreement is Turkey’s second FTA with an Asian country after South Korea and its first FTA with a Southeast Asian country.
Currently, the FTA covers only trade in goods, including market access, rules of origin, customs procedures and facilitation, sanitary and phytosanitary measures, technical barriers to trade and trade remedies. It also includes chapters on economic and technical cooperation, transparency and dispute settlement. The Agreement also has an “Evolutionary Clause” (Article 14.3) which foresees that the Parties will initiate negotiations on trade in services and explanatory talks on investments one year after the entry into force of the Agreement with the aim to expand the scope of the FTA.
Under the FTA, in terms of tariff lines, 71% of Turkey’s exports, and 69% of Turkey’s imports have gained duty free access to their respective markets upon the entry into force of the Agreement. At the end of the transition period of eight years, in terms of tariff lines, 99% percent of Turkey’s exports and 86% of Turkey’s imports; in terms of products subjected to trade, 94% of Turkey’s export and 75% of Turkey’s import will be exempt from customs duties.
Regarding the industrial products, in terms of tariff lines 70% of the customs duties of both Parties have gained duty free access immediately with the entry into force of the FTA, while products considered as sensitive for Turkey and Malaysia will be subjected to 3, 5 or 8 years dismantling period.
Regarding the agricultural products, Parties have asymmetrical elimination schedules due to the sensitivity of Turkey’s agricultural sector. In this area, at the end of the transitional period, 94% of Turkey’s exports and 47% of Turkey’s imports will be subject to duty free access. In this sector, products considered as ‘very sensitive’ have been excluded from the elimination schedules of the Parties. Additionally, Turkey has granted 30% duty reduction for palm oil products.
The trade volume between Turkey and Malayisa was realized as 3.424 million dollar in 2017 with an increase of 48% compared to 2016. In 2017, Turkey’s exports to Malaysia has amounted to 286 million dollar, whereas its imports has amounted to 3.138 million dollar.