FTAs: Lessons from FTAs: Lessons from MalaysiaMalaysia

Adul ChotinisakornMinistry of Commerce

2 October, 2008

E&E Products38%

Chemical Products6%

Others36%

Refined Petro5% Palm Oil

8%Crude Petroleum

7%

Malaysian Export Structure, Jan-July 2008

Malaysian Self-Sufficiency Level in Food Commodities, 2000-2010 (%)Malaysian Self-Sufficiency Level in Food Commodities, 2000-2010 (%)

*Ninth Malaysian Plan

*Harvard Business Review, July-August 2007

BMI Short-term Political Risk Rating Quarter 4, 2008

Source: Business Monitor International

BMI Long-term Political Risk Rating Quarter 4, 2008

Source: Business Monitor International

BMI Short-term Economic Risk Rating Quarter 4, 2008

Sour

Source: Business Monitor International

BMI Long-term Economic Risk Rating Quarter 4, 2008

Source: Business Monitor International

BMI Business Environment Risk Rating Quarter 4, 2008

Potential

Information

Age approach

Vision 2020

requirement

Current

Industrial

approach

Source : EPU; IMF; World Bank; Mckinsey analysis

TOWARDS ACHIEVING VISION 2020Potential per capita GDP in real 1992 US$ thousand

Post-independence

1957-70

•Laissez-faire/ export-oriented•Economic and rural development Growth

Growth with Equity, 1971-90

Balanced Development,1991-2000

Performance & Impact Oriented Development to achieve the goals of Vision 2020

ECONOMIC MASTER PLAN

MALAYSIA

MP 1MP 2MP 3MP 4MP 5MP 6MP 7MP 8MP 9

MSC MASTER PLANMALAYS

IA

Multimedia Super Multimedia Super Corridor Phase 1Corridor Phase 1

MSC Next Leap (2004-2010)

Urban Transportation RM 12 bn/us$3.2bn

Water treatment

Telecommunications/multimedia RM 6.6 bn/ us$1.7bn

Ports RM 7.8 bn / us$2.1bn

Power RM 42.3 bn / us$11.1bn

Airports RM 10.0 bn / us$2.9bn

Roads/highways RM 31.6 bn / us$2.9bn

Scope of Scope of PrivatizationPrivatization

Generating New Sources of GrowthGenerating New Sources of Growth

Biotechnology Action PlanBiotechnology Action Plan

Palm Oil Industrial Cluster (POIC)Palm Oil Industrial Cluster (POIC)

Halal HubHalal HubDevelopment of halal product industry Development of halal product industry cluster to capture the growing share of cluster to capture the growing share of the world halal market potentialthe world halal market potentialCredibility and worldwide recognition of Credibility and worldwide recognition of JAKIM’s halal certification system and JAKIM’s halal certification system and logologoAvailability of needed resources and Availability of needed resources and strong government supportstrong government supportEstablish Halal Industry CorporationEstablish Halal Industry CorporationProvision of various incentivesProvision of various incentivesInternational Malaysia Halal Showcase International Malaysia Halal Showcase (MIHAS)(MIHAS)

Vision 2020

Toward FTAsPURPOSE

S

LAOSLAOS

CAMBODIACAMBODIA

BURMABURMA

VIETNAMVIETNAM

PHILLIPINESPHILLIPINES

BRUNEIBRUNEI

INDONESIAINDONESIA

SINGAPORESINGAPORE

THAILANDTHAILAND

MALAYSIAMALAYSIA

ASEAN MEMBERS

Political issues

Export Goods(Agricultural Product and Labor-intensive

Products)

Services & Investment

Technology /Industry

NAM: National Auto-Mobil

MSC: Multimedia Super Corridor

Agro and Biotech Industry

Halal Hub

SMEs

Construction and Engineering

Human Development

FTA SeriesMALAYSIA &

ASEANMalaysia - JapanMalaysia - Korea

Malaysia’s Bilateral Agreements

Malaysia – New ZealandMalaysia – U.S. TIFA

Malaysia - PakistanMalaysia - Chile

Malaysia - Australia

Malaysia – U.S. FTA

Malaysia – India

ASEAN - JapanASEAN – Australia and New Zealand

ASEAN - ChinaASEAN - EU

Trade Preferential System - OIC

D-8 Preferential Tariff Agreement

ASEAN - KoreaASEAN - India

Malaysia’s Multilateral AgreementsDone

Done

Done

Done

Done

Done

Done

O/P

O/P

O/P

O/P

Don

e

FTA STRATEGIC MOVE

MALAYSIA

Malaysia - JapanMalaysia - Korea

Malaysia’s Bilateral Agreements

Malaysia – New Zealand

Malaysia – U.S. TIFA

Malaysia - PakistanMalaysia - Chile

Malaysia - Australia

Malaysia – U.S. FTAMalaysia – India

•J-M Economic Partnership Agreement•FDI and SMEs development•Agriculture and Agro-based Industry•Trade and Investment Cooperation

•Telecom and Springboard to South Asia

•Two-Way Investment flow

•Biotechnology

•FDI and Economic Cooperation•Comprehensive Economic Cooperation

Benefits

FTA STRATEGIC MOVE

ASEAN

Multilateral Agreements

•Goods•Services

•Investment

Benefits

ASEAN - JapanASEAN - Australia and New Zealand

ASEAN - ChinaASEAN - EUASEAN - KoreaASEAN - India

FTA STRATEGIC MOVE

Technology

ASEAN - JapanASEAN - Korea

ASEAN - India

Malaysia - JapanMalaysia - KoreaMalaysia - New ZealandMalaysia - AustraliaMalaysia - India

ASEAN – Australia & NZ

• MSC:Multimedia Super Corridor• Agro and Biotech Industry• SMEs• Construction and Engineering• Human Development

• Seek more Econ and Tech Coop• Offer more Market Access in Agricultural and Food Products

1st Step Strategy 2nd Step Strategy

Econ and Tech Cooperation

FTA STRATEGIC MOVE

Halal Hub

Offer the allowance of Food and Agricultural Product

1st Step Strategy

Distribute food products to Muslim countries (Halal Food)

2nd Step Strategy

Malaysia - ChileMalaysia - Pakistan

Malaysia - New ZealandMalaysia - Australia

Malaysia - India

Trade Preferential System - OIC

D-8 Preferential Tariff Agreement

Vision 2020 Malaysian Plans

Agro & Biotech

Food

SMEs Development

TechnologyFT

A N

eg

otia

tion

K-economy

Conclusion

THANK YOUTHANK YOU

TERIMA KASIHTERIMA KASIH