Malaysia remains steadfast in championing regional trade
24 Dec 2020
The year 2020 is supposed to be an ambitious year for regional trade pacts.
However, progress has been hampered as the world scrambles to mitigate the challenges brought about by the Covid-19 pandemic.
The deadly virus — which had allegedly originated from an exotic meat market in Wuhan, China and detected in Malaysia as early as in January this year — has severely damaged the global economy, and the country was not spared from its repercussions.
Like many other countries, Malaysia has resorted to taking drastic actions, including implementing international border closure and restricting interstate travels to curb the spread of Covid-19, which the World Health Organisation (WHO) had declared as a global pandemic on March 11, 2020.
However, amidst the backdrop of the pandemic, Malaysia has proven its capabilities by successfully conducting and concluding its year-long Asia-Pacific Economic Cooperation (APEC) chairmanship with a strong pledge towards free, open and non-discriminatory trade and investment.
The leaders of the 21 APEC member economies vowed to strengthen cooperation during and after the Covid-19 pandemic, as they gathered online on Nov 21 for the first-ever fully virtual 27th APEC Economic Leaders’ Meeting (AELM).
“As a grouping whose economies constitute about 60 per cent of the global economy, APEC assumes a central role in spearheading post-pandemic economic recovery,“ Prime Minister Tan Sri Muhyiddin Yassin, the host of this year’s APEC meetings, said in his opening remarks.
Among the leaders at this year’s AELM were the United States President Donald Trump and Chinese President Xi Jinping.
Both leaders agreed to set aside their differences and recognise the importance of a free, open, fair, non-discriminatory, transparent and predictable trade and investment environment to drive economic recovery in such a challenging time.
Two years ago, APEC leaders failed to agree on a joint statement for the first time in its history amidst a trade row between Washington and Beijing, while in 2019, the AELM meeting scheduled in Chile was cancelled due to anti-government protests across the South American cities.
In a declaration issued after the virtually-held meeting in Kuala Lumpur, APEC leaders stated their commitment to combatting and mitigating the impacts of Covid-19 and improving the narrative of trade and investment.
They had also committed to implement inclusive economic participation through digital economy and technology, driving innovative and inclusive sustainability, as well as strengthening stakeholder engagement during “one of the most challenging health and economic crises of our times”.
The Kuala Lumpur Declaration is one of the two important documents to emerge in this year’s APEC meeting, with the other being the “APEC Putrajaya Vision 2040”, which will chart the future of the region and replace the Bogor Goals that expires this year.
This year also marked another key milestone for Malaysia; for the world’s largest free trade agreement (FTA), the Regional Comprehensive Economic Partnership (RCEP) was finally inked after undergoing 31 rounds of arduous negotiations spanning eight years.
The signing of the RCEP on Nov 15 represents a significant and imperative milestone in the integration and revitalisation of economies of the 15 signatories.
Senior Minister cum International Trade and Industry (MITI) Minister Datuk Seri Mohamed Azmin Ali said the signing of the agreement is a testament to the strengthening of the multilateral trading system while upholding the World Trade Organisation’s development agenda.
The RCEP encompasses 15 countries with a combined population of 2.2 billion, or nearly 29.7 per cent of the world’s population, and represents US$24.8 trillion or 28.9 per cent of the world’s gross domestic product, based on the World Bank’s 2018 data.
It amalgamates and streamlines the existing FTAs of ASEAN+1 — which includes Japan, South Korea, China, Australia and New Zealand — into an inclusive and comprehensive agreement.
Among other things, the agreement will enhance inter and intra-regional trade and investment, strengthen regional value chains, as well as facilitate transparency, information sharing and harmonisation of technical regulations and standards.
Meanwhile, promoting the region’s post-pandemic economic recovery through digitalisation has become one of the main agendas discussed during the 19th ASEAN Economic Community (AEC) Council Meeting on Nov 15, which was held as part of the virtual 37th ASEAN Summit.
As for FTAs, MITI said Malaysia has signed 16 FTAs and implemented 14 FTAs, comprising seven bilateral FTAs and seven regional FTAs.
Collectively, in 2019, trade with countries covered by both the regional and bilateral FTAs accounted for 66.7 per cent of Malaysia’s total trade, or RM1.22 trillion.
Exports to FTA countries amounted to RM672.1 billion, while imports totalled RM551.5 billion.
For the first nine months of 2020, trade with FTA partners accounted for 66.5 per cent or RM860.6 billion.
Exports amounted to RM483.29 billion while imports totalled at RM377.31 billion.