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Federated Farmers is congratulating the Government on yesterday’s conclusion of a free trade agreement with Malaysia. Due to be signed later in the year, Malaysia represents New Zealand’s seventh largest trading partner.
“Malaysia is one of the economic tigers of the Asia Pacific region and I’m pleased to say Selamat Datang to this latest agreement,” said Don Nicolson, President of Federated Farmers.
“While the current economic slowdown has seen Malaysia’s 2009 GDP growth forecast shrink from an initial 3.1 percent to 1.4 percent, it’s still in positive territory. GDP growth for 2010 is expected to be 3.2 percent, a figure we’d envy here in New Zealand.
“Bilateral trade with Malaysia reached NZ$2.7 billion for the year ending June 2008. New Zealand’s merchandise exports to Malaysia increased by some 31 percent year-on-year to hit NZ$855 million.
“A critical thing for New Zealand to recognise is the importance of brands. Fonterra has experienced phenomenal growth from the ASEAN economies through its brand led approach.
“For our meat sector particularly, brands are important to develop given the Malaysian supermarket sector is increasingly dominated by major domestic and international retailers, such as Carrefour (France), AEON (Japan) and Tesco (UK). Irrespective of the current economic slow down, these big chains are all moving ahead with expansion plans.
“New Zealand needs to recognise this is a sophisticated consumer market. To maximise opportunities there we need a sophisticated approach. Malaysia is adopting western style modern retail outlets and value sales are forecast to hit US$5.49 billion by 2013 – an increase of some 37 percent on 2009.
“Malaysia has a rapidly expanding middle class and the prize for New Zealand is to capture as much of the 22.7 percent increase in food consumption expected over the next four years.
“Given the backsliding of the United States and the European Union, agreements like this are important to send a message that trade and not protectionism is the future,” Mr Nicolson concluded.