The ASEAN-South Korea Services Agreement will provide greater opportunities and market access to Malaysian services providers in penetrating the South Korean market, the Malaysian International Trade and Industry Ministry (MITI) said Wednesday.
Malaysia is expected to benefit from collaboration in four competitive sectors: construction, engineering, maritime and information and communication technology (ICT), the ministry said in a statement.
MITI issued the statement after the economic ministers of the Association of the Southeast Asian Nations (ASEAN) signed the agreement with South Korea at the 11th ASEAN Summit in Singapore on Wednesday. The agreement is in addition to the Trade in Goods Agreement implemented last June.
Under the latest agreement, both ASEAN and South Korea offer higher liberalization commitments compared with those in the General Agreement on Trade in Services (GATS) under the World Trade Organization (WTO), MITI said.
The deal also reaffirmed ASEAN and South Korea's commitments towards greater economic integration, the ministry said, adding that Malaysia's liberalization commitments comprise offers beyond the WTO Doha Round.
Selected sectors offered by ASEAN comprises business services, computer related services, telecommunication services, construction, distribution services, educational services, environmental services, financial services, tourism and related services, and transport services, MITI said.
Last year, ASEAN's trade with South Korea amounted to 52.8 billion U.S. dollars.
South Korean investment in ASEAN, meanwhile, is also growing fast, totaling 1.1 billion U.S. dollars in 2006, up from 578 million U.S. dollars in 2005.
Malaysia is a major trading partner of South Korea in ASEAN. In2006, Malaysia's total trade with it amounted to 47.2 billion ringgit (14 billion U.S. dollars), with exports and imports of 21.3 billion ringgit (6.3 billion U.S. dollars) and 25.9 billion ringgit (7.7 billion U.S. dollars) respectively.
For the first nine months of this year, total trade was at 35.5billion ringgit (10.5 billion U.S. dollars).
Malaysia's main exports to South Korea are mineral fuels, machineries, transport equipment, manufactured goods and chemicals. The main imports are machinery and transport equipment, manufactured goods and chemicals.
In terms of investment, South Korean investment in Malaysia in 2006 amounted to 417.5 million ringgit (123.5 million U.S. dollars)in the manufacturing sector.
From January to August 2007, investment in the sector recorded 903 million ringgit (267.2 million U.S. dollars).
Malaysia's investment in South Korea in 2006 in all sectors was39.9 million ringgit (11.8 million U.S. dollars).