Australia and Malaysia are on track to conclude negotiations for a free-trade agreement by mid-2006, Malaysian Trade Minister Rafidah Aziz said today after talks with her counterpart Mark Vaile.

"We hope to complete the process by mid-next year," Rafidah told a news conference.

Vaile described the process as having been "incredibly healthy and productive" but said it was still "early days at this stage" and declined to nominate a date for the talk to conclude.

He said both countries were contining to "working through the process, initially of establishing the perimeters and the key areas we want to work on."

"We don't commit ourselves in absolute terms to a timeframe. It's more important that you get a good outcome rather than meet a deadline."

"We are hopeful that is, in due course, 2006, and that is the target that we'll work towards," he said.

"If it takes a bit longer, or if we do it any quicker, all the better. But we want to ensure that the agreement is a good agreement for both sides."

Halal meat

Vaile said Australia was working to ensure meat exports to mainly-Muslim Malaysia were slaughtered in accordance with halal standards.

"The customer is always right. If you don't work off that premise, then you're not going to sell a product," he said.

"There are certain requirements under religious law as far as halal certification is concerned and there are some issues that we're working through, particularly with Jakim (Department of Islamic Development Malaysia), to make sure that those requirements are achieved."

Malaysia recently suspended beef imports from several Australian abbatoirs amid concerns over slaughtering methods.

It imports about 10,000 metric tonnes of Australian beef per year. In 2004, it imported Australian meat and livestock products worth about RM250 million.

Australian Prime Minister John Howard and Malaysian Prime Minister Abdullah Ahmad Badawi agreed to launch negotiations on a free-trade agreement during Abdullah's visit to Canberra in April.

Nine largest

According to Australia's Department of Foreign Affairs and Trade website, one of its key objectives is to eliminate tariffs imposed by Malaysia on its dairy products, horticultural products, processed meat, seafood, tropical fruits and alcoholic beverages.

Annual bilateral trade between the countries amounts to some 7.5 billion dollars and Malaysia is Australia's ninth largest trade partner.

Australia exports raw cane sugar, copper, milk and cream, wheat and coal to Malaysia.