KUALA LUMPUR: Malaysia and Chile set up a joint study group on Thursday as a first step toward a free trade agreement.
The announcement was made after talks between visiting Chilean Foreign Minister Ignacio Walker and Malaysia's Minister of International Trade and Industry, Rafidah Aziz.
Rafidah told reporters that the study group would submit its recommendation to both governments by the end of the year.
Walker said the first round of the joint study would take place on Feb. 28 in Kuala Lumpur.
A ministry statement said the study group will identify the strategic and economic benefits the two countries will derive from a free trade area, review existing trade and economic relations, and identify policies for boosting trade in goods, services and investment.
Chile is Malaysia's fourth largest trading partner among the South American countries.In 2004, bilateral trade increased by 77.7 per cent to US$232.4 million (euro196.95 million).
Chilean Foreign Minister Ignacio Walker, left, is greeted by his Malaysian counterpart Syed Hamid Albar prior to a meeting in Putrajaya, Malaysia, Thursday. - APpic
Malaysian exports to Chile were valued at US$95.0 million (euro76.27 million) while imports were valued at US$137.3 million (euro116.3 million).
From January to November 2005, total trade amounted to US$197.8 million (euro167.6 million) with Malaysian exports recorded at US$58.2 million (euro49.32 million) and imports at US$139.7 million (euro118.3 million).
Malaysia's main exports to Chile in 2004 were electrical and electronic, rubber and wood products in addition to machinery, appliance and parts and chemicals and chemical products.
Chile's exports to Malaysia are mainly metals, ores, metal scrap, paper and pulp products, fresh, chilled or frozen seafood, and chemicals and chemical products. - AP
Latest from AP-Wire