General Agreement Trade in Services in World Trade Organisation

In Trade in Services Agreements, Malaysia’s priority is to pursue trade liberalisation through rule-based multilateral trading system under the General Agreement Trade in Services (GATS) in World Trade Organisation (WTO).

GATS entered into effect in January 1995 after the end of the Uruguay Round with a new round of negotiations commencing in 2000. As members were still learning about services then, a lot of focus were placed on policies and regulations affecting trade in services. Liberalization initiatives in services therefore will have an impact on both traders and non-traders because the domestic regulatory regime is involved. The GATS can provide services exporters with the following benefits:

Through GATS, the coverage of both service and the service providers as well as the four modes of services supply were introduced.

Regional and Free Trade Agreements (FTA/RTA)

Malaysia participation in FTA/RTA is to complement its participation in the multilateral approach, i.e. GATS and for closer engagement with major dialogue/trading partners, regionally or bilaterally. The choice of bilateral FTA is based on cost-benefit analysis, i.e. to maximise the benefits of trade liberalisation. The Malaysia-Japan FTA was signed in December 2005 with other five regional and seven bilateral FTA being negotiated:

For updates on Malaysia FTAs visit www.miti.gov.my

ASEAN Framework Agreement on Services

Malaysia focuses on ensuring Malaysia into ASEAN integration through Asean Framework Agreement on Services (AFAS) (in addition to other agreements like AFTA, AIA, AEC, etc).
AFAS is aimed at substantially eliminating restrictions to trade in trade in services among ASEAN countries in order to improve the efficiency and competitiveness of ASEAN services suppliers. AFAS provides the broad guidelines for ASEAN Member Countries to progressively improve Market Access and ensure equal National Treatment for services suppliers among ASEAN countries in all four modes of services supply. AFAS also provides rules for related aspects such as mutual recognition (Click here for MRA Engineering), dispute settlements, institutional mechanism, as well as other areas of cooperation in services (Click here for Emergency Safeguard Measures) . Following the signing of AFAS, officials of ASEAN countries immediately started to embark on the negotiations to achieve the objective of AFAS of creating a freer trade in services within the region. This effort is carried out through rounds of negotiations process, each round resulting in packages of commitments (Click here for Malaysia Commitments) from each ASEAN country in each agreed economic sector/sub-sector and mode of supply. At present, ASEAN has concluded 4 packages of services commitments through 3 rounds of negotiations since 1 January 1996.