'OPEN SKIES' AGREEMENT WITH MALAYSIA STRENGTHENS CLOSE RELATIONSHIP

"Malaysia is New Zealand's latest Open Skies partner", Transport Minister Jenny Shipley announced today.

"New Zealand's proposals for opening up international air services are getting a positive reception within South East Asia", Mrs Shipley said following a meeting with her Malaysian counterpart, Dato' Seri Dr Ling Liong Sik this morning.

"This Agreement demonstrates a shared understanding in Kuala Lumpur and Wellington of the importance of efficient international air transport links to the wellbeing of our economies", Mrs Shipley said.

The new Agreement with Malaysia, negotiated by officials in late-October, complements those concluded earlier this year with the United States and Singapore.

New Zealand and Malaysian airlines will be permitted to operate between and beyond the two countries without restriction as to routing, or the capacity which may be provided. Airlines will not be required to file fares for approval, although the authorities in either country may require the airlines to notify them of the fares they are charging.

As was the case in the recent agreement with Singapore, the new Agreement with Malaysia includes liberal airline investment provisions.

The signing of the new Agreement is expected later this year. Meantime, the rights exchanged with Malaysia will be applied provisionally.

"Conclusion of this new Agreement is a significant development in New Zealand's relationship with Malaysia", Mrs Shipley said.

Malaysia is New Zealand's largest trading partner in South East Asia, and the tenth largest overall. The two countries recently concluded an Agreement on Trade and Economic Cooperation covering investment and trade in services, as well as goods. The Trade Agreement envisages working towards the removal of distortions to trade and investment flows.

The new Air Services Agreement is consistent with this objective and a signal of our commitment to liberalising trade and investment.

It is consistent also with the Bogor Declaration of Common Resolve, in which APEC economies commit themselves to free and open trade in goods, services and investment no later than 2010, and in the case of developing economies no later than 2020.

Negotiations with Brunei Darussalam towards a similar agreement are planned for later this month.

The new Agreement with Malaysia follows the signing earlier this year of an Open Skies Agreement with the United States, and the negotiation of similar agreements with Singapore and the United Arab Emirates.

This year has also seen the signature of new Air Services Agreements with South Africa and India, and increased opportunities in New Zealand' s air services arrangements with the United Kingdom and Hong Kong.