Malaysia-Japan Economic Partnership Agreement (MJEPA) by Nurul Fatihah and Nurul Ashiqin

Malaysia-Japan Economic Partnership Agreement (MJEPA) 
by Nurul Fatihah and Nurul Ashiqin

Malaysia-Japan Economic Partnership Agreement (MJEPA) was signed on 13 December 2005 and came into force on 13 July 2006. This agreement was predicted to fully the goals of its (FTA) component within ten years. Both countries, within the framework of their respective national circumstances, have developed general, product-specific, and industry sector– specific strategies to promote FTA. Malaysia, being much weaker than Japan in the international and multilateral forums with the developed countries in particular, seeks to achieve wider objectives than simple market access for its products in particular through favorable tariff and non-tariff facilities under a FTA. Japan, on the contrary, aims to achieve regional and global stability of its trade and economic activities, and also to contribute to the economic development of its FTA partners. These kinds of diverging goals and objectives, in fact, create diverse opportunities for member countries to achieve mutual business and economic goals.

In this agreement (MJEPA), it has details the liberalization of services between Malaysia and Japan. Here is a summary of the main points agreed upon:

Japan has offered the service providers in Malaysia:

·         Market access to the following sectors:
·         Professional and business services;
·         Communication services;
·         Education Services
·         Related Health & Social Services
·         Tourism and related services
Malaysia is also committed to:
·         Framework Agreement on Services (AFAS) Fourth Package; and
·         51% equity ownership of the lease, repair, maintenance of equipment and machinery

The benefits that can be derived from MJEPA are as follows:

1. -          Provides access for Malaysian services providers to Japan’s marketing including business and professional services, education services, communication services, tourism and travel related services, and health related and social services.
2. -          Provides a framework to further facilitate cross-border investments between the two countries through commitments on national treatment, most-favored nation treatment, as well as protection of investors and investments
3. -          Provides a framework for economic and technical cooperation. A major example is the cooperation undertaken the Malaysia-Japan Automotive Industry Cooperation (MAJAICO)