INTRODUCTION

This is Malaysia’s Seventh Trade Policy Review at the World Trade Organisation (WTO). Trade has historically been an engine of growth and continues to play an important role in the Malaysian economy. Malaysia’s trade policy is aimed at creating a free and fair trading environment with a vision to make the country one of the most competitive trading nation by 2020.

Malaysia’s trade performance continued to improve during the period under review despite the uncertainty in the global market, weak aggregate demand, low commodity prices and volatile financial markets in major economies. Domestically, policies continue to focus on high value and knowledge-intensive industries. With the aim of becoming a high-income nation by 2020, emphasis has been placed on integrating Malaysian companies into Global Value Chains (GVC) and developing commercial ties with new markets.

The WTO is an important feature of Malaysia’s overall trade and investment policy. The rules- based multilateral trading system creates opportunities for Malaysian business through trade liberalisation in a fair trading environment. To complement the multilateral process, Malaysia continues to negotiate bilateral, regional and plurilateral trade agreements as a means to obtain preferential and effective market access.

 Apart from economic engagements with ASEAN countries and other key economic partners such as China, the European Union (EU), the United States (U.S.) and Japan, Malaysia is also actively promoting trade with new markets in Africa, Latin America and West Asia. To accelerate the growth of a new wave of exports, the services sector, and small and medium enterprises (SMEs) have been identified as the targeted areas to be promoted under the Eleventh Malaysia Plan 2016-2020 (11MP).

 ECONOMIC DEVELOPMENT

Overview

 Domestic Economy

The coherent economic and industrial planning policies introduced by the Government, specifically the five-year Malaysia Plan and the New Economic Model (NEM), identified specific economic objectives and industry guidelines for the development of the nation. The core and focus areas embedded under these policies will be aggressively implemented to achieve the projected growth targets set by the Government

The 11MP which was launched in May 2015 emphasizes not only on economic development but also has a special focus on the need for greater inclusiveness. A monitoring mechanism has been established to ensure all the outcomes are met. In addition to the inclusive strategy, emphasis is also given to enhance productivity growth and promoting quality investment in higher value-added industries. The thrusts outlined in the 11MP and number of targeted goals (KPIs) are as follows:

 List of Thrusts and Number of Targeted Goals (KPIs) in the 11MP 

 The Government is committed to ensure the nation’s economic growth despite external uncertainties. During the period under review, the Malaysian economy continued on a positive trajectory, recording an average GDP growth of 5.1% for the period 2014 to 2016. Real GDP growth was 6.0% in 2014, 5.0% in 2015 and 4.2% in 2016. The positive momentum was supported by private investment and private consumption. In 2016, the per capita Gross National Income (GNI) of Malaysia increased to US$9,850.