Malaysia consists of thirteen states and three federal territories separated by the South China Sea with a population of 28.3 million. Malaysia has one of the best economic records in Asia, with a GDP of 265 billion USD, a growth rate of 4.8% in 2011 and a total trade volume of 401 billion USD. The economy has traditionally been fuelled by its natural resources, but is expanding in the sectors of science, tourism, commerce and medical tourism.

Malaysia’s first three trading partners are Singapore, China and Japan. Main export products of Malaysia are electrical and electronic products, crude and refined oil, palm oil, chemicals, natural gas, wooden products, while main import products are electrical and electronic products, crude and refined oil, machinery and spare parts, chemicals, transportation equipment, metals.

Malaysia is a member of ASEAN, Group of D-8, OIC.

Malaysia has Free Trade Agreements (FTA) with New Zealand, Japan, Pakistan, India, Chile, AFTA (ASEAN Free Trade Area) and countries that have FTA’s with ASEAN. It has ongoing FTA negotiations with Australia, European Union and Turkey.

Turkey and Malaysia have initiated FTA negotiations in 2010 and held seven rounds of talks at present. Eighth round is planned to be held in the first quarter of 2012. Both sides mainly agreed on the general context of the agreement. Recent negotiations focus on the issue of “Rules of Origin”.

The legal framework of bilateral commercial and economic relations of Turkey and Malaysia depends on a number of agreements, including  Trade Agreement (1977), Economic and Technical Cooperation Agreement (1977), Avoidance of Double Taxation Agreement, (1996), and Reciprocal Protection and Promotion of Investments Agreement (2000).

Turkey and Malaysia have initiated FTA negotiations in 2010 and held seven rounds of talks at present. Eighth round is planned to be held in the first quarter of 2012. Both sides mainly agreed on the general context of the agreement. Recent negotiations focus on the issue of “Rules of Origin”.

Within the framework of the Economic and Technical Cooperation Agreement signed in 1977, Turkey-Malaysia Joint Economic and Technical Committee (JETC) mechanism has been established. Two meetings were held since the establishment of the committee undertaking many aspects of the bilateral economic and commercial relations.

With the aim of establishing a mutual confidence and cooperation environment among Turkey and Malaysia, Turkish-Malaysian Business Council has been established in 2005. The last meeting of the business council was held in İstanbul on September 27, 2011, giving the opportunity for Turkish and Malaysian business circles to meet in an efficient and effective atmosphere.

Exports

Malaysia was Turkey’s 82th export partner in 2011.

Turkey’s exports to Malaysia were 183 million USD in 2011 with a decrease of 19% (225 million USD) from 2010. Since 2005, in which Turkey’s “Asia-Pacific Commercial and Economic Relations Development Strategy” was initiated, Turkey’s exports to Malaysia have raised by 220% (57 million USD).

Top 5 export categories (2-digit SITC) to Malaysia in 2011 were; petroleum, petrol products and related materials, iron and steel, inorganic chemicals, textile yarn, fabrics; made-up articles, other transport equipment.

Imports

Malaysia was Turkey’s 34th import partner in 2011.

Turkey’s imports from Malaysia were 1.5 billion USD in 2011 with an increase of 39% (1.1billion USD) from 2010. Since 2005, in which Turkey’s “Asia-Pacific Commercial and Economic Relations Development Strategy” was initiated, Turkey’s imports from Malaysia have raised by 99% (785 million USD).

Top 5 import categories (2-digit SITC) from Malaysia in 2011 were; fixed vegetable fats and oils, textile yarn, fabrics; made-up articles, electrical machines, apparatus and appliances, crude rubber, clothing accessories.

Trade Balance

The trade volume between Turkey and Malaysia reached to 1.75 billion USD in 2011. But the trade between our countries has an unbalanced structure and on this account Turkey encounters 1.38 billion USD of trade deficit against Malaysia.

Contracting and Consultancy Services

Malaysia does not seem to appear as an effective partner for Turkey in the field of construction. As per date, Turkish construction companies have undertaken 3 projects, amounting to 58.6 million USD in Malaysia.

Investment

Turkish foreign direct investment (FDI) stock in Malaysia amounts to 0.5 million USD between 2002-2011. Investments mainly realized in the year 1998 and before and focused majorly on construction facilities.

FDI stock of Malaysia in Turkey amounts to 54 million USD between 2002-2011. 15 million USD of these investments were realized in 2011.