Australia, Malaysia eye trade pact
SYDNEY, Australia (CNN) -- Negotiations to secure a free-trade agreement between Australia and Malaysia have begun in Canberra as the two countries mark a new step in their often troubled relationship.
Australian Prime Minister John Howard, describing talks with Malaysian Prime Minister Abdullah Badawi as "constructive and wide ranging," said on Thursday the countries had signed a statement of intent to begin negotiations.
Abdullah's three-day visit to Australia, the first by a Malaysian Prime Minister in 21 years, is being viewed as a warming of ties between two countries whose past relationship has been fraught with political and cultural difficulties.
Howard said a free trade agreement would build on the "already substantial relationship between the two countries."
Malaysia is Australia's ninth biggest trading partner with bilateral trade valued at nearly $10 billion in 2004.
Australia has already struck free trade agreements with the United States, New Zealand, Thailand and Singapore.
Australia mainly sells primary produce to Malaysia while importing oil and electronic goods.
Howard also said Australia will establish a Malaysia institute to develop the relationship and he has accepted an invitation to visit Malaysia.
In a statement released after their meeting in Canberra, Mr Howard said that the two leaders reaffirmed links between the two countries, including close ties in education, trade and security.
"We encouraged business to explore opportunities for increased two-way investment," Howard said, adding that the leaders reaffirmed the importance attached to the Asia Pacific Economic Cooperation (APEC) forum and the early conclusion of a free trade agreement between ASEAN and Australia and New Zealand.
Howard said the two countries would continue to work closely as neighbours in regional efforts to promote security and combat transnational crime.
On Friday the Malaysian Prime Minister will travel to Sydney to meet Australian business leaders and view a technology demonstration before attending a reception hosted by New South Wales Premier Bob Carr.
Political tensions between Canberra and Kuala Lumpur have been tense in the past with Australia a frequent target of attack by former leader Mahathir Mohamad.
As recently as last week, Abdullah criticized Australia for seemingly being more concerned about its relationship with the United States than its Asian neighbors and for supporting a policy of pre-emptive strikes against terrorists in neighboring countries.
Australian Foreign Minister Alexander Downer said the comments would not hinder the success of Abdullah's visit.
"The focus of his visit will be very significant in strengthening the economic relationship ... the political relationship, by the very fact of his visit, is improving as well, and that is good to see," Downer told radio listeners on Wednesday.
"There will always be times when with other countries we have some points of disagreement," he said.
