Good progress was made in the fourth round of MAFTA negotiations
which were held in Kuala Lumpur on 3 to 7 July 2006. This
followed advances made at inter-sessional meetings on investment,
telecommunications, e-commerce, financial services and dispute
settlement since the last negotiating session held in Canberra in
March 2006.

We are now seriously engaged in the negotiations on goods.
Both Parties exchanged initial tariff offers at this round.
They are a good starting point for detailed market access
negotiations. The focus of discussion was on seeking ways to
improve our respective offers rather than re-emphasising
difficulties. We will now assess the initial offer from
Malaysia and submit a request list before the next negotiating
session. Australia's request list will be informed by
discussion with industry and responses to requests for public
submissions.

There was useful discussion on Malaysia's import licensing
regime which covers about 27 per cent of Malaysian tariff lines,
and which Australia regards as an important priority in the
negotiations. Both sides have advanced draft text for the
agreement which will form the basis of discussions at the next
negotiating session.

Both parties made steady progress towards narrowing differences
on investment. Major outstanding issues include the coverage
of portfolio investment and investment in services.

Discussion on services continues to highlight fundamental
differences between Australia and Malaysia. Malaysia
reiterated its preference for a positive list approach to market
access commitments. Australia has underscored its commitment
to a negative list approach. Both Parties agreed to schedule
an inter-sessional meeting in late August to advance negotiations
in this area.

There was pleasing progress on intellectual property and
e-commerce where discussion focused on draft text. Malaysia
outlined its difficulties in relation to commitments on competition
policy.

Australia underscored its disappointment that government
procurement was again not discussed at this session. We
continue to argue for the inclusion of commitments on government
procurement in MAFTA.

Australia and Malaysia tabled text covering most areas of the
negotiations at this session. Both Parties will advance text
in the lead up to the next negotiating session scheduled for 11 to
15 September 2006 in Canberra.

Mr Vaile will be meeting with Malaysia's Trade Minister,
Rafidah Aziz, in Adelaide on 3 August for the Australia-Malaysia
Joint Trade Committee meeting where they will discuss the bilateral
relationship including the progress of MAFTA negotiations.