Bill English

Wellington, Oct 27 NZPA - Businesses are being urged to take advantage of trade inroads in Asia, including the signing of a deal with Malaysia overnight, considering the strong rate of growth of Asian economies.

The Malaysian deal builds on the agreement New Zealand signed this year with the 10 members of the Association of South East Asian Nations (Asean), of which Malaysia is a part.

The result is that 95 percent of goods will be duty free and within seven years all goods tariffs will be phased out.

Some of the key aspects of the Malaysian deal were in the non-tariff areas with business people allowed to get visas more easily and for longer.

Acting Prime Minister Bill English said today the latest deal was significant as it was part of a bigger picture of a number of free trade agreements with the Asian economies.

"It's clear over the next five to ten years that is where the action is going to be -- they are the fast growing economies -- and our traditional markets in Europe and the UK are not in great shape."

Mr English said it was hoped that a reduction in tariffs would see strong export growth, but he was reluctant to put a figure on it as it depended on the ability of businesses to take advantage of opportunities in Asia.

His comments were echoed by the Wellington and Auckland chamber of commerce business groups.

Auckland Chamber of Commerce chief executive Michael Barnett said that coupled deals already forged the latest agreement was a great opportunity for businesses if they chose to take it.

He said international trade had been volatile over the last year, but analysis showed that growth within Asia held the best prospects for New Zealand exporters.

There were opportunities for exporters to develop their businesses, but export activity was also moving beyond traditional relationships built on product alone.

Trade Minister Tim Groser said New Zealand's services trade with Malaysia was expanding, particularly in the education sector, with the number of Malaysian international students in New Zealand increasing by over 70 percent since 2003.

He said Malaysia was New Zealand's eighth-largest export destination, accounting for almost a billion dollars of exports in 2008.

Exports to Malaysia had increased 80 percent since 2004, which was more than double the rate of New Zealand's export growth to the rest of the world.

Lain Jager, who is chief executive of kiwifruit marketer Zespri and was in Malaysia with the New Zealand delegation, said kiwifruit was New Zealand's seventh-largest export to that country.

"Malaysia presents significant future growth opportunities for our industry and we already have plans to boost our staff presence here to help educate Malaysian consumers about the nutritional benefits of Zespri kiwifruit," he said.

Prime Minister John Key and Fonterra chairman Sir Henry van der Heyden opened a new $12 million expansion of the Fonterra Dairymas cultured foods plant in the Malaysian capital, Kuala Lumpur, after the deal was signed.

Mark Wilson, regional manager for Fonterra Asia/Africa and Middle East said: "There is huge opportunity for Fonterra in Malaysia where, with a climate not suited to dairying, they rely upon imports to meet over 95 percent of domestic dairy consumption."

Green Party co-leader Russel Norman said deals such as the Malaysian one restricted governments' abilities to regulate to protect things such as environmental and labour standards.

He said the relationship with Malaysia was good, but Malaysia in the past had intervened to protect its country -- particularly against financial intervention.

"But treaties like this restrict the ability of the government to intervene, to control financial activities.

"In the middle of a global financial crisis, why would you reduce your ability to regulate the finance sector? It doesn't make any sense."