Analysis of International Marketing Activities: Malaysia & Australia

This essay provides a critical analysis of international marketing activities between Malaysia and Australia, focusing on the policies and agreements that facilitate and regulate trade between the two countries. It begins with an introduction to the Malaysia-Australia Free Trade Agreement (MAFTA) and provides a literature review on the economic relationship between the two nations. The essay then delves into a critical analysis of various factors, including tariffs, taxation, and the Trans-Pacific Partnership (TPP), highlighting how these elements influence trade. It examines the impact of MAFTA, including its benefits for both countries and its role in addressing non-tariff barriers. The conclusion emphasizes the importance of market investigation, professional advice, and adapting to technological advancements for Australian companies in the Malaysian market, as well as the need for Malaysia to manage its trade relations effectively. References to relevant academic sources are included to support the arguments presented.

Running head: INTERNATIONAL MARKETING ACTIVITIES BETWEEN MALAYSIA
AND AUSTRALIA
INTERNATIONAL MARKETING ACTIVITIES BETWEEN MALAYSIA AND
AUSTRALIA
Name of the Student
Name of the University
Author Note

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INTERNATIONAL MARKETING ACTIVITIES BETWEEN MALAYSIA AND
AUSTRALIA
Introduction
In this essay, the discussion will be on the international marketing activities between
Malaysia (Home Country) and Australia (Host Country). The discussion will be the critical
analysis of the policies that facilitates as well as regulates the domestic and the foreign
companies trading activities and relations between the countries. The negotiation between the
countries came to an end on 30th of March, 2012, for a free trade agreement, namely
Malaysia-Australia Free Trade Agreement (MAFTA). The agreement came into action from
1st January, 2013. It is a complete and extensive agreement consisting 21 chapters which
includes trade in goods, services and investments as well as financial cooperation. The
agreement also includes creative property rights, e-commerce and competition policy. It also
marked one important milestone, achieving the already settled ASEAN-Australia-New
Zealand FTA (AANZFTA) (Maria, 2018).
Literature Review
Malaysia is a middle-income nation with a variation in the economy. The economy is
pretty unified into local and global value chains, so trade is important to growth and financial
development. Trade plays an important part in the country, with imports and exports of goods
and services similar to 130% of GDP approximately. In between the year 2013 and 2016,
there were some alteration in the structure of trade in goods (Rahman, 2014). The exports and
imports declined due to lower commodity prices. Long-term financial policy is set out in
Vision 2020, which includes the primary objective to achieve high-income country status by
2020, by increasing the speed of growth of labour productivity. The trade between the
relations include the areas of trade in goods, services, telecommunication services, e-
commerce, institutional provisions, final provisions, investments, and many more.

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Critical Analysis
Tariffs and duty rates are continuously changing and getting revised. Australia beliefs
strongly in confirming and reconfirming these before selling products to Malaysia. There are
policies which facilitate as well as regulate trading between the two countries. Some of them
are discussed below:
Tariff
Malaysia approves the Harmonized Commodity Description and Coding System of
categorization or allocation of stuffs. Malaysia has been increasingly liberalizing its tariff
regime or establishment of taxes, but some of the products which are in clash with regional-
manufactures items are still now saved from all these new taxation systems. The mutual trade
relationship of Australia and Malaysia has achieved a meaningful foundation with the signing
of an inclusive free trade agreement (FTA). Constructed on the ASEAN Australia New
Zealand Free Trade Agreement (AANZFTA), this mutual FTA promises tax-free entry for
97.6 per cent of recent Australian goods that are exported to Malaysia (99 per cent by 2017),
while the trades from Malaysia will be benefited from duty-free entry into Australia.
Achievement of important and meaningful profits for services and finance has occurred
through admission to expanded foreign possession in major service sectors where Australia
has convinced the ability to perform (Food & Council, 2014).
Taxation
An Avoidance of Double Taxation agreement has been signed by Malaysia and
Australia. The total accumulated earning of the companies of both the countries and
individuals obtained from or transferred to Malaysia are accountable to tariff. Exclusions are
created to the income transferred to Malaysia by local companies (companies except which
are involved in banking, insurance, air and sea conveyance), foreign companies and

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AUSTRALIA
individuals. The tariff rates which are suitable includes real property gains tax, sales tax,
import duty, service tax, company tax, excise duty, personal tax, double taxation and
withholding tax. In addition to these, the government of Malaysia provides a broad range of
tax inducement to Australia (Wignaraja, 2013).
Trans-Pacific Partnership (TPP)
One of the most eminent trade agreements—the Trans-Pacific Partnership (TPP)—
consists of ISDS provisions. The TPP was signed on 4 February 2016 and involves 12
signatories: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand,
Singapore, the United States, and Vietnam. Though there are concerns that are elevated, many of
Australia’s present trade agreements have ISDS provisions, along with other TPP countries. The
agreements with nations like New Zealand, Malaysia, the United States, and Japan do not contain
ISDS clauses. Australia already contains ISDS provisions with the vast bulk of TPP nations. This
agreement aims of ending an inclusive trade and investment agreement between Australia and
Malaysia (Gantz, 2016). The TPP negotiations allow Malaysia to enhance the latest market
approach obligations to Australia. The TPP negotiations initiated in March 2010 and
Malaysia began its assistance in October 2010. The inclusion of some parties in the TPP
negotiations will help Malaysia to convey many persistent results in areas like jobs,
intellectual property, competition, and government acquisition, rather considering in mutual
FTAs, like MAFTA (Abidina, Haseeb & Jantan, 2016).
MAFTA
This offered ample profits for Australia’s business and investment relationship with
Malaysia that have built the existing marketplace connection and other results with Malaysia
under AANZFTA and the WTO (World Trade Organization). Australia and Malaysia divided
the understanding while bargaining MAFTA by developing the market access commitments

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INTERNATIONAL MARKETING ACTIVITIES BETWEEN MALAYSIA AND
AUSTRALIA
of both the nations in AANZFTA and recognizing certain mutual market approach and
business-related regulatory problems which may not be convincingly solve the
competitiveness in the marketplace. MAFTA also enhanced Australia’s wider mutual
relationship with Malaysia. Precisely, it has energised the close bonds that have gradually
build up between the two countries over the last ten years and created a hard-working and
much planned structure for addressing business and investment issues. At a wider level,
MAFTA expanded Australia’s engagement with the Asia-Pacific region for doing business.
MAFTA encourages the elimination of taxes on 94.8 per cent of Malaysia’s tax lines on
coming into effect, expanding to 98.6 per cent in 2016, covering 98.9 per cent of 2009-11
imports into Malaysia from Australia. Every Australian tax on Malaysian imports will be
omitted from MAFTA’s entry into force. MAFTA has withdrawn Malaysia’s measurable
restrictions on car imports from Australia and induced tax allocation which was increased for
a variety of agronomical products. Besides it includes developments on many other non-
taxable measures stirring Australia’s goods exports; containing the modern beginning of
import licensing arrangements for particular agronomical products like milk and rice as well
as better clarity and advisory devices. MAFTA provides more determination and
transparency for service exporters and shareholders of Australia, inclusive through
AANZFTA, which provides market access guarantee throughout a variety of sectors. Areas
of export interest such as knowledge, commercial services, accounting, management advisory
and telecommunications are included. MAFTA also provided a lofty level of approach in the
market for liberalisation of goods. In short, MAFTA addressed a lot of meaningful non-
taxable obstructions which were not inscribed in AANZFTA (Vitalis, 2015).
Conclusion
From this essay, it can be concluded that the Australian companies are considered to
spend time investigating the market, obtain professional advice and to investigate the trading

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AUSTRALIA
issues properly and thoroughly in the marketplace of Malaysia and establishing business
relationships with the Asian countries. The alteration in government after sixty years gives
Malaysia the chance to reflect on and review its trade and investment policies. It is also suitable
for Malaysia to perform a more active role in local financial unification, concentrating on
comprehensive, sustainable growth and acknowledge its role in the multilateral trading system.
Malaysia should not only endure to manage an open, liberal trade and investment environment,
but chiefly, the country must assure that its policies are appropriate in the face of technological
advances and requirements. The time is right for Malaysia to revise its mutual financial relations
with its partners, prioritise its relationships so as to govern resources efficiently. In this context it
is important to coordinate with both the Ministries of Foreign Affairs and Defence to ensure that
Malaysia’s economic, geo-political and security interests are even.

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