Malaysia will reduce or eliminate import duties on Australian exports while tariffs on its shipments to Australia totally eliminated when the recently- concluded Malaysia-Australia Free Trade Agreement (MAFTA) comes into effect on Jan. 1, the Malaysian Ministry of International Trade said on Thursday.

The agreement, signed on May 22, sees Malaysia lowering or eliminating tariffs on an agreed list of industrial and agricultural products from January 2013 with further reductions expected each January subsequently until 2019.

Australia, meanwhile would eliminate all Malaysian import duties under the deal, making MAFTA the first free trade agreement that grants immediate tariff elimination on all Malaysian products.

"MAFTA marks another important milestone in Malaysia-Australia economic relations... the scope of commitments under the MAFTA provides a more liberal and predictable operating environment for the business community of both countries to further strengthen their bilateral trade and economic linkages on a long term basis," the ministry said in a statement.

The agreement allows Malaysians to wholly own operations in professional sectors like legal accounting, architecture and engineering and paves the way for increased Australian participation in Malaysia's education, telecommunication and financial services.

Both countries would improve economic cooperation in technical programmes in the fields of automotive, tourism and clean coal technology among others under the accord.

MAFTA was Malaysia's sixth bilateral free trade agreement after the country sealed similar deals with Japan, Pakistan, New Zealand, India and Chile.

Negotiations on MAFTA started in May 2005 and were paused briefly a year later to make way for the ASEAN-Australia-New Zealand FTA before it was concluded in March this year after 11 rounds of talks.

Malaysia's exports to Australia in 2011 totalled 8.4 billion U. S. dollars as bilateral trade grew by 11.1 percent on an annual basis to 12.58 billion U.S. dollars the same year.