WT/TPR/M/292  
16 April 2014  
(14-2327)  Page: 1/46  
Trade Policy Review Body 
3 and 5 March 2014   
 
  TRADE POLICY REVIEW 
MALAYSIA  
MINUTES OF THE MEETING 
Chairperson: H.E. Mr. Joakim Reiter 
CONTENTS 
 
1  INTRODUCTORY REMARKS BY THE CHAI RPERSON ....................................................... 2  
2  OPENING STATEMENT BY THE REPRESENTATIVE OF MALAYSIA  .................................. 4  
3  STATEMENT BY TH E DISCUSSANT .............................................................................. 10  
4  STATEMENTS BY MEMBERS ........................................................................................ 13  
5  REPLIES BY THE REPRESENTATIVE OF MALAYSIA AND ADDITIONAL 
COMMENTS ..................................................................................................................... 39  
6  CONCLUDING REMARKS BY THE CHAI RPERSON ......................................................... 45  
 
 
Note: Advance written questions and additional questions by WTO Members, and the replies 
provided by Malaysia are reproduced in document WT/TPR/M/292/Add.1 and will be available 
online at http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm . WT/TPR/M/292 • Malaysia 
 
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  1  INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1.1.  The sixth Trade Policy Review of Malaysia was held on 3 and 5 March 2014. The Chairperson 
H.E. Mr Joakim Reiter (Sweden) welcomed the delegation of Malaysia headed by Dr. Rebecca Sta Maria, Secretary General of the Ministry of In ternational Trade and Industry; the rest of the 
delegation; H.E. Ms Mariam Md Salleh, Permanent Representative of Malaysia to the WTO; other 
colleagues from the mission in Geneva; and the discussant, H.E. Mr. Harald Neple (Norway). 
1.2.  The Chairperson recalled the purpose of the Tr ade Policy Reviews and the main elements of 
the procedures for the meeting. The report by Malaysia was contained in document WT/TPR/G/292 
and that of the WTO Secretariat in WT/TPR/S/292. 
1.3.  Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to the delegation of Malaysia: Canada; Singapore; Norway; 
Pakistan; Australia; Mexico; Hong Kong, China; Switzerland; New Zealand; the United States; 
Philippines; Argentina; Chile; China; Colombia; Thailand; Japan; the Republic of Korea; the European Union; Indonesia; the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu; Costa Rica and Brazil. The following delegations submitted written questions after the two 
week deadline: Brunei Darussalam on behalf of ASEAN; Turkey; Peru; Brazil and Ecuador. 
1.4.  As regards the overall economic situation, at th e previous TPRB meeting on Malaysia in 2010, 
Members acknowledged Malaysia’s steady economic growth, despite a contraction in 2009 as a 
result of the global financial crisis. During this latest period under review, Malaysia's overall economic performance was also strong, underpinned by pragmatic economic management and appropriately calibrated macroeconomic policies. The economy had continued to undergo a 
significant external rebalancing, reflecting also the objective – as indicated in 2010 – to boost 
domestic demand. Whilst we had seen a slowdown in  total factor productivity (TFP) growth during 
2008-2012, Malaysia remained externally competit ive. Its economic fundamentals remained, by 
and large, sound but, similarly to others, its economy remained vulnerable to exogenous shocks. 
Malaysia's equitable and sustainable growth depended  on diversification, which raised the question 
about the structural reforms that Malaysia would want to pursue in the future. At the same time, 
the Secretariat report highlighted that Malaysia had recently embarked on several new initiatives 
to improve its business environment and facilitate investment, including the introduction of a regulatory reform programme in 2013.  
1.5.  With regard to trade policy, a very obvious trend, both in 2010 and today, was Malaysia’s 
continued to pursuit of trade liberalization at the regional and bilateral levels: seven new RTAs had 
entered into force over the past four years and integration among ASEAN Member states had deepened. Malaysia was looking to conclude RTAs with economies in Europe as well as 
participating in the Trans-Pacific Partnership and ASEAN Regional Economic Partnership 
negotiations. This begged the same question as Members raised in 2010, namely how Malaysia intended to ensure that its bilateral and region al trade agreements would remain complementary 
to the multilateral trading system. 
1.6.  Moreover, in 2010, Members noted that relatively low agricultural protection contrasted with 
higher levels of average tariff protection in manufacturing, even if the manufacturing sector was relatively open to both trade and investment with the exception of the automobile sector. During 
the period under review, Malaysia had broadly main tained its dualistic approach to protection of 
goods. However, the manufacturing sector had in creasingly been subject to RTA-driven trade 
liberalization.  
1.7.  Also, in 2010, Members applauded Malaysia's unilateral reduction of its applied MFN tariff 
rates while expressing concern that a large num ber of tariff lines were unbound. Since then, 
further unilateral tariff cuts had led to a drop of the average applied MFN tariff rate from 7.4% in 
2009 to 5.6% (2013). As a result, the average gap between applied and bound MFN rates 
appeared to have risen to 10 percentage points.  
1.8.  Other things seemed to have changed far less, however. In 2010, Members questioned why a 
considerable portion of Malaysia’s tariff lines was subject to mostly non-automatic import licensing. 
Some Members also expressed concern about export regulations, noting that its export tax 
revenues were higher than import tax revenues. Limited progress seemed to have been made in WT/TPR/M/292 • Malaysia 
 
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  these – and some other – areas during the period of review. On a sectoral basis, the automotive 
sector also remained protected by a high average applied MFN tariffs (of 17.3%), non-tariff measures (such as the gazetted price system) an d the import licensing system of "approved 
permits"; in addition, an array of tax as well as non-tax measures (soft loans and grants) 
measures were still in use. Considering the recently revised National Automotive Policy, this review 
offered a timely occasion to clarify what changes, if any, had been introduced to past instruments and measures.  
1.9.  In other areas, the situation was quite the opposite with noticeable steps taken to improve 
conditions for trade and investment. For example, Malaysia became an observer to the WTO Agreement on Government Procurement in 2012, and efforts had been made to improve transparency and "integrity pacts" in its procurement procedures. Further progress had also been 
made in other areas of past concern such as the alignment of national standards with international 
ones, and the enforcement of intellectual proper ty rights. Similarly, whereas the Malaysian 
economy remained one of the most highly subsidized in the region and the world, renewed 
emphasis was placed on efforts for rationalizing the subsidies regime in October 2013. This review 
offered an opportunity to assess the scope and effectiveness of such reforms, as well as to what extent they matched the expectations of Members. 
1.10.  Perhaps the area with the most visible and important changes in Malaysia’s trade policy 
since the last review was services. At its last review, Members welcomed Malaysia's relaxation of equity and other restrictions on foreign investment in services, and encouraged the authorities to consider further liberalize its foreign investment regime. In 2012, Malaysia started to implement 
either partial or complete lifting of foreign equity restrictions in 17 services subsectors, under 
6 sectors (professional services, communications services, distribution services, educational services, environmental services and health-related and social services). Additionally, new financial 
services laws had removed the explicit caps on foreign direct investment in the banking and 
insurance sectors. These reforms were seen as essential step in order for the Government to achieve its objectives of increasing the share of services in GDP to 60% by 2020 and to establish a 
knowledge-based economy less reliant on manufactured exports.  
1.11.  The Chairperson was sure that these topics and themes, and many more, would be touched 
upon in greater detail at the deliberations during the two days.  
1.12.  He also noted that a podcast would be made of this TPRB meeting. WT/TPR/M/292 • Malaysia 
 
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  2  OPENING STATEMENT BY THE REPRESENTATIVE OF MALAYSIA (DR. REBECCA STA. 
MARIA) 
2.1.  I am very honoured to be here representing Ma laysia for its sixth Trade Policy Review. At the 
outset, let me put on record my appreciation to all the delegates present here for showing an 
interest in Malaysia’s trade policy through the questions submitted and we hope for an interesting 
exchange of views. 
2.2.  I would like to thank you Mr Chairman, for your kind words of welcome and introduction to 
Malaysia’s sixth Trade Policy Review. Special thanks to H.E. Ambassador Harald Neple of Norway 
for accepting to be the discussant. I would also like to thank the WTO Secretariat’s team for their hard work in producing the report which provides a basis for our discussion.  
2.3.  In the last few weeks there was a sudden surge in the workload in my Ministry as Ministry 
officials prepare the response to all the questi ons posed by the Membership. The early batch of 
responses was circulated to Members 2 days ago. Like other Members going through the Trade Policy Review, there is a lot of coordination work involved as questions cut across Ministries and 
agencies and despite the many constraints, not least of which is of course, time. We assure you 
that we have put our best effort in providing the written answers and will provide responses to additional questions as soon as possible. 
Malaysia and the multilateral trading system 
2.4.  Being a trading nation with a small domestic market, the Malaysian economy is very much 
dependent on international trade. As such, Malaysia attaches great importance to the multilateral trading system. It is our view that the multilat eral trading system has provided stability to 
international trade and in ensuring that world trade is conducted in an open, fair and transparent 
manner.  
2.5.  It is without doubt that Malaysia has benefited through its membership in the GATT and later 
the WTO. Our active participation in the multilateral trading system has contributed towards the 
growth and development of our country from a relatively undeveloped country dependent on 
agriculture in the 60’s to a vibrant industrialising nation now enjoying middle income status.  
2.6.  Malaysia fully supports the early conclusion of the Doha Development Agenda, and is hopeful 
that with the adoption of the Bali Package at the recent Ministerial Conference, negotiations could move forward in the other remaining areas of the DDA. Our continued focus at the WTO should be on efforts to open up markets and strengthen rules to ensure transparency, certainty and 
predictability in global trade.  
2.7.  As a Member of the WTO, Malaysia views the trade policy review as a very important process 
in promoting greater awareness and understanding of a Member’s trade policies and practices, and 
the legitimate reasons behind them. It also offers the Member under review an opportunity to 
demonstrate efforts taken and being taken in meeting its obligations in the WTO. More importantly, these reviews provide a platform fo r member States to share policy initiatives and 
measures that are being taken to meet obligations that are more difficult to implement, 
particularly when it has to go through stakeholders' reviews and consultations and the parliamentary process.  
2.8.  For the sixth Trade Policy Review, Malaysia received 470 questions from 27 Member 
countries. The queries cover IPR, Competition Policy, domestic regulatory reform, Government 
Procurement, services liberalization, and tariff related issues. 
Overall economic environment during the review period 
2.9.  When we met for Malaysia’s TPR in 2010, the world was in the process of recovering from the 
global economic crisis. Major adjustment and re balancing efforts were undertaken by advanced 
nations to strengthen the economy. However, the recovery has been slow and unemployment 
remains a global issue. The emerging and developing economies seem to be faring a little better 
but they too face challenges as they are dependent on demand from advanced economies. WT/TPR/M/292 • Malaysia 
 
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  2.10.  Despite the challenging global economic environment and weaker external demand, 
Malaysia managed to record positive growth duri ng the review period. In 2010, Malaysia recorded 
a GDP of 7.2% which was supported by higher private and public sector spending. Malaysia 
recorded GDP growth of 5.1%, 5.6% and 4.7% in 2011, 2012 and 2013, respectively. In fact, 4th 
quarter 2013, GDP growth of 5.1% was stronger than expected.  
2.11.  Strong growth, low unemployment, poverty reduction, manageable inflation coupled with 
the Government’s determined approach towards economic reform – rationalisation of subsidies, 
planned introduction of GST – have met with approval from international rating agencies. This is 
also reflected in investor confidence. Foreign direct investment for 2013 was the highest on record. The budget deficit has been reduced to 3.9% , exceeding the Government’s target of 4%. 
2.12.  Malaysia continued to record healthy expansion of trade. Total trade for 2013 expanded by 
4.6% to reach RM1.369 trillion (US$418.72 billion) compared with RM1.309 trillion 
(US$400.37 billion) registered in 2012. In 2013, ex ports grew by 2.4% to total RM719.81 billion 
(US$220.16 billion), and imports expanded 7% to RM649.19 billion (US$198.56 billion). 
2.13.  In March 2010, the Government launched the New Economic Model (NEM) with the aim of 
propelling Malaysia  to a high income nation by 2020 while al so ensuring that gr owth is sustainable 
and inclusive. The New Economic Model comprises four key pillars namely the 1Malaysia concept, 
the Government Transformation Programme (GTP ), the Economic Transformation Programme 
(ETP) and the 10th Malaysia Plan 2011-2015. The NEM highlights several key initiatives such as public sector reform, modernizing labour laws and deregulation and liberalization, as the basis for competing in the global market. 
2.14.  The Economic Transformation Programme was fo rmulated with the goal of elevating the 
country to high-income status by 2020, with GNI pe r capita of at least US$15,000. To achieve the 
Economic Transformation Programme’s targets, the Government has identified 12 National Key 
Economic Areas or NKEAs, representing economic sectors which account for significant 
c o n t r i b u t i o n s  t o  G N I .  T h e  p r o g r a m m e  i s  a l s o  focused on raising Malaysia's competitiveness 
through the implementation of six Strategic Reform Initiatives.  
2.15.  Each NKEA is made up of Entry Point Projects, encompassing new growth areas, and 
Business Opportunities, which enable the sectors to further move up the value chain. The 12 NKEAs are: 
 Oil, gas and energy 
 Palm oil and rubber 
 Financial services 
 Tourism 
 Business services 
 Electronics and electrical 
 Wholesale and retail 
 Education 
 Healthcare 
 Communications content and infrastructure 
 Agriculture 
 Greater Kuala Lumpur/Klang Valley 
2.16.  The six Strategic Reform Initiatives are made up of supportive policies that will drive 
Malaysia’s global competitiveness. They are : 
 Competition, standards and Liberalization 
 Public finance reform WT/TPR/M/292 • Malaysia 
 
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   Public service delivery 
 Narrowing disparities 
 Government's role in business 
 Human capital development 
2.17.  The Tenth Malaysia Plan, 2011-2015, which is also the nation’s medium term plan, 
encapsulates the aspiration of the Government Transformation Programme (GTP), the Economic Transformation Programme (ETP) and the New Ec onomic Model (NEM). The Plan charts the 
strategic development of the nation for the period 2011-2015 and sets the stage for major 
structural transformation required of a high-inc ome economy. The Plan contains strategic policy 
directions and programmes based on five key thrusts: (i) creating the environment for unleashing economic growth; (ii) moving towards inclusive socio-economic development; (iii) developing and 
retaining a first-world talent base; (iv) building an environment that enhances quality of life; and 
(v) transforming Government to transform Malaysia. 
Fiscal Policy 
2.18.  The Malaysian Government is committed to fiscal consolidation in order to strengthen the 
fiscal position and ensure long-term fiscal sustainability as well as macroeconomic stability. Sound financial position would warrant fiscal space needed to mitigate any adverse impact arising from 
unexpected economic or financial crises.   
2.19.  In line with this commitment, the 2014 fiscal deficit as a percentage of Gross Domestic 
Product (GDP) is targeted at 3.5%. 
2.20.  The Malaysian economy is expected to grow by 5–5.5% this year supported by resilient 
domestic demand and the improving external sector . Growth will be private sector led, supported 
by strong private capital spending while private consumption will continue to remain resilient. 
2.21.  The fiscal commitment is in line with the effort to achieve a fiscal deficit target of about 3% 
to GDP in 2015 and a balanced budget by 2020. Fi scal consolidation will be implemented gradually 
in order to support continued economic growth while ensuring the well-being of the people. 
Structural Reforms 
2.22.  One of the measures to achieve the deficit target and ensure prudent and productive 
government spending is subsidy rationalization. This measure is being implemented progressively and gradually, particularly in the challenging and uncertain global economic environment, to ensure minimal impact especially on the low income group. 
2.23.  In this regard, the Government reduced the subsidies for RON95 petrol and diesel by 
Malaysian 20 sen per litre in September 2013. The subsidy for sugar was removed in October, the same year. Similar rationalization of subsidies has been taken for cooking gas and electricity. This 
process is continuing.   
2.24.  Part of the savings from the subsidy rationalization is given back to the people, particularly 
the vulnerable groups, to mitigate the rise in th e cost of living. This approach ensures that the 
shift from a blanket subsidy with leakages arising from among others, smuggling activities and 
excessive consumption by those that can afford, to a more targeted social assistance mechanism.  
2.25.  Besides the subsidy rationalisation, the Government continues to stress measures which will 
improve the effectiveness of spending, re-prioritize programmes and projects for those with high 
multiplier effects to the economy as well as ensure government spending is always based on 
“value for money”. 
2.26.  Measures to increase government revenue continues to be given priority, On 1 April 2015, 
the Goods and Services Tax (GST) will be implemented to widen the tax base. WT/TPR/M/292 • Malaysia 
 
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  2.27.  In addition, the Fiscal Policy Committee, established in June 2013, will continue to formulate 
comprehensive fiscal guidelines and set the dire ction of the country's fiscal management. The 
Committee’s role is also to strengthen the Government’s financial position as well as ensure long-term fiscal sustainability and macroeconomic stability. 
2.28.  The fiscal adjustments implemented so far have been positively accepted by international 
rating agencies. On 20 November 2013, Moody’s In vestors Service reaffirmed Malaysia’s sovereign 
debt rating at “A3” and revised the rating outlook  from “Stable” to “Positive”. The Moody’s upward 
revision reflects the improved prospects for fiscal consolidation and reforms with continued 
macroeconomic stability in the face of external challenges.  
2.29.  The Government is committed to pursue reform initiatives which are critical to improve 
productivity and competitiveness of the economy.  Fiscal targets on debt and deficit will be met 
while strictly observing rules and regulations on spending, revenue collection and debt 
management. Good governance, strong fiscal instit utions, prudent financial management as well 
as well-paced and articulated fiscal reforms will en sure healthy public finances and boost market 
confidence. 
Services sector 2.30.  During the period under review, the services sector continued to be the main contributor to 
Malaysia’s GDP. In 2013, the sector contributed 54.7%  to the GDP and this is expected to increase 
to 56% by 2015. 
2.31.  As part of the Government’s effort to further liberalise the services sector, the Government 
identified and unilaterally liberalised 18 sub-sectors in 2012. This was undertaken in addition to 
the 27 sub-sectors of service that were unilatera lly liberalised in 2009, bringing the total number 
of sub-sectors autonomously liberalised to 45. While most of the unilateral liberalisation initiatives have been immediately implemented, several have the implementation delayed pending 
parliamentary approval process required of amen dments to legislations, as in the case of 
professional services. Besides attracting foreign investments, the liberalisation of these sub-sectors is expected to contribute towards creating a dynamic and competitive business 
environment and further improve the econ omic fundamentals of the country.  
Financial services 2.32.  The Malaysian financial sector continues to remain resilient with domestic financial stability 
preserved since the last review. The progressive lib eralisation of the domestic financial sector has 
continued to contribute to the further diversification of the financial system and in enhancing its 
competitiveness.  
2.33.  The enactments of the Financial Services Act 2013 and the Islamic Financial Services Act 
2013 have further strengthened the regulatory and supervisory framework for the financial system 
in Malaysia, and provided greater clarity and transparency in the implementation and administration of the law. Malaysia also issued the Financial Sector Blueprint 2011-2020. This 
envisages a more significant role of the participants in the financial system towards realising the 
vision of a more competitive, dynamic, inclusive, diversified and integrated financial system that best meets the changing needs of the economy. The new laws and the Blueprint together have also clarified the criteria for new market entrants in the financial sector through new licences and 
acquisition of interest in existing licensed banks and insurers. 
Manufacturing sector 2.34.  The manufacturing sector in Malaysia is undergoing a transformation and restructuring 
process as the country moves into high-technology, knowledge based and capital-intensive 
industries. The Government through its Economic Transformation Programme has identified manufacturing-related NKEAs which require focused development. 
2.35.  For example the NKEA on Electrical and Electr onics focuses on Entry Point Projects that 
support clustering or that have the potential of becoming development enablers. In this NKEA, four WT/TPR/M/292 • Malaysia 
 
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  sectors namely semiconductor, solar Photovoltaic, LED and Industrial Electronics have been 
identified as sectors that would bring spill-over business effects to Malaysia.  
National Automotive Policy 2.36.  The National Automotive Policy 2014 which was announced on 20 January 2014 is expected 
to transform Malaysia’s automotive industry. The key directions and strategies were formulated 
based on extensive studies and consultations with relevant government agencies, industry players, and consumers. It aims to prepare the local automotive players for liberalization of the industry.  
2.37.  Apart from focusing on key structural issues affecting the automotive industry, the 
Automotive Policy outlines measures to meet cost, delivery and global quality standards.  
2.38.  There are 6 roadmaps and action plans develo ped to ensure the smooth implementation of 
the Policy. These roadmaps, launched on 6 February 2014 are: 
 The Technology Roadmap; 
 Automotive Supply Chain Development Roadmap; 
 Human Capital Development Roadmap; 
 Automotive Remanufacturing Roadmap; 
 Development of Automotive Authorized Tr eatment Facilities (ATF) Framework; and 
 The Bumiputera Development Roadmap. 
2.39.  Central to NAP 2014 is the vision of making Malaysia an energy efficient vehicle (EEV) hub. 
This encompasses strategies and measures to strengthen the entire value chain of the automotive industry and lead to environment conservation, hi gh-income job creation, transfer of technology 
and create new economic opportunities for domestic companies.  
Initiatives to Facilitate Trade and to be more competitive 
2.40.  The establishment of a Special Task Force to Facilitate Business or PEMUDAH in 2007 has 
proven to be successful in creating and sustaini ng a business-friendly environment in Malaysia. 
The continuous engagement between the public and private sectors facilitated by PEMUDAH has 
assisted to position Malaysia as the 6th easiest place to do business with improvements in behind-the-border measures as reported in the World Bank Doing Business 2014 Report. The report 
ranked Malaysia number one for Getting Credit, number four for Protecting Investors and number 
five for Trading Across Borders.  
2.41.  The Performance Management and Delivery Unit or PEMANDU was established in 2009 to 
oversee the implementation and progress of th e Government Transformation Programme (GTP) 
and Economic Transformation Programme (ETP). 
2.42.  The Malaysian Government acknowledges that in order to reduce operational cost of doing 
business and to facilitate trade, faster clearance and movement of goods across the border is 
essential. The Royal Malaysian Customs Department is working on the U-Customs as a means to 
transform and improve Customs service delivery. 
2.43.  As part of the Government’s effort to enhance transparency and predictability of regulatory 
actions and to create a more conducive business climate, in 2013 the Government adopted the 
National Policy on the Development and Implementa tion of Regulations. This is to address the 
gaps in the rule-making process and to put Malaysia in a position to meet international best practices, enhance transparency and credibility of regulatory actions. To this end, the Government 
will: 
 Review existing regulations with a view to removing unnecessary rules and compliance 
 costs; 
 Undertake a cost-benefit analysis of new policies and regulations to assess the impact on the 
 economy; and WT/TPR/M/292 • Malaysia 
 
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   Make recommendations on policy and regulatory changes that will enhance productivity. 
2.44.  All legislations (new and existing) are now required to go through a more robust process of 
analyses and consultations with stakeholders to meet  the desired public policy objectives. It is the 
intention of the Government to ensure that re gulations do not create unnecessary burden to 
society and business, discourage competition and innovation or alienate stakeholders.    
2.45.  The Competition Act 2010 was introduced by the Government to promote a competitive 
environment for business and investment. This Act is currently in force. 
2.46.  Malaysia will continue to review and gradually liberalise the import licensing requirements 
taking into account the overall development objectives of the nation. In an exercise undertaken in 2011, Malaysia abolished licensing requirements for 1,218 tariff lines out of 2,428 tariff lines which were subjected to import licensing requirements. This process is on-going. 
Way Forward 
2.47.  The Government is now preparing the Eleventh  Malaysia Plan, 2016 - 2020. The 11th Plan is 
not only the nation’s last medium-term plan before 2020, the year which Malaysia aspires to 
become a high-income advanced country, but also provides the broad policy setting for Malaysia 
beyond 2020. The 11th Plan will focus on economic  growth, sustainability and inclusiveness. The 
preparation of the Plan will involve extensive engagement and collaboration with all stakeholders 
and various segments of society to ensure the in clusiveness of the nation’s medium-term policy 
measures. The 11th Plan is expected to be tabled in Parliament in June 2015. 
2.48.  Malaysia will continue to be committed to the Multilateral Trading System. We will work with 
the WTO to ensure that we meet the objectives of the Doha Development Agenda. 
2.49.  As a member of ASEAN and APEC, Malaysia is also committed towards enhancing regional 
economic integration.  WT/TPR/M/292 • Malaysia 
 
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  3  STATEMENT BY THE DISCUSSANT 
3.1.  I want to begin by welcoming the delegation from Malaysia, headed by Dr. Rebecca Sta 
Maria, Secretary General of the Ministry of International Trade and Industry, and thank you for your opening statement. I would also like to thank Malaysia and the Secretariat team for their high 
quality reports which form a good factual basis for our discussions. The breadth and experience of 
the Malaysian delegation coming from a number of ministries and institutions will ensure interesting discussions on the challenges ahead for Malaysia, both when it comes to its trade policy 
and its overall economic performance. 
3.2.  During my intervention I will touch upon the economic and trade performance of Malaysia, on 
issues linked to trade facilitation and corruption, and finally some aspects of the many plans linked to Malaysia’s Vision 2020, such as the services sector, the oil and gas sector and manufacturing, 
including the automotive sector, and SMEs. 
3.3.  Malaysia is a country with a strong overall economic performance during the period under 
review due to pragmatic economic management and appropriately calibrated macroeconomic 
policies. Malaysia has clearly stated ambitions for its economic development and trade 
performance with an impressive number of plans under the overall New Economic Model. The aim is to transform Malaysia into a developed high income nation by 2020. The strategies emphasize 
the importance of driving private sector growth , reducing state involvement in the economy, 
encouraging high value-added activities, integrating Malaysian companies into global value chains, and developing commercial ties with new markets. 
3.4.  However, external shocks such as the financial crisis, the earthquake and tsunami in Japan 
and the flooding in Thailand have had a strong influence on Malaysia’s trade balance. While still in 
surplus, it has declined significantly. Yet, the level of foreign reserves seem adequate, covering 9.7 months of retained imports and 3.7 times the short term foreign debt. It would be interesting 
to hear the views of the Malaysian delegation on th eir expectations going forward, seen in relation 
to the foreseen developments under the New Economic Model from 2010.   
3.5.  GDP growth has also been reduced, while still  higher than in neighbouring countries. The 
latest figures available predict a growth level of 4.7% for 2013. The plan’s forecasts for the period 
2011-2015 are for a 6% average growth per annum in GDP, in other words lower levels of growth than before the global downturn. What are the expectations going beyond 2015?  
3.6.  Malaysia has an impressive low level of 3% unemployment recorded in the reports, coupled 
with a large influx of foreign workers which constitute 16% of total employment. At the same time, 
I note that 8.2% of total employment is in the informal sector, and that the re-entry into the formal sector is a stated aim. With 59.4% of empl oyment in the informal sector in services there 
are many plans for the further development and innovation for this important sector of the 
economy.   
3.7.  With a few exceptions, Malaysia has an open economy and its trade policy is focused on 
efforts towards creating a more liberalized and fair international trading environment. The general 
assessment of Malaysia’s business climate is very positive, although further reforms are deemed necessary to improve government services, tackle corruption, and increase the country’s technological readiness.   
3.8.  I would like to commend Malaysia for the very high ratings it gets in the World Bank Doing 
Business 2014 Report both when it comes to ”trading across borders” and in “ease of doing business”. Trade facilitation measures and efforts to improve corporate governance and fight the 
challenge of corruption have also been high on  the agenda, all being important elements in 
creating the necessary framework conditions for the increase in FDIs upon which Malaysia relies.  However, with an estimated loss of 1-2% of GDP to  corruption, there is still a job to do. This is 
recognized by the Government by identifying corrupt ion as one of the national key results areas in 
the Government Transformation Program. 
3.9.  Malaysia has strong economic performance, is strongly outward oriented, but at the same 
time one of the most heavily subsidized countries in the world. I note that many of the written 
questions to Malaysia relate to import licensing, local content provisions, export controls, tax WT/TPR/M/292 • Malaysia 
 
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  incentives and other forms of support given to domestic industries to promote increased exports. 
This seems to be in contrast to the high ratings I just mentioned in trading across borders and ease of doing business. It leads to the question: how is the use of some of these measures conducive to achieve Vision 2020 and to achievin g economic prosperity and social justice as 
outlined in the tenth Malaysia plan? Will the planned reforms entail changes to some of these 
measures?  
3.10.  The launch of The New Economic Model in 2010 comprising an impressive list of plans, 
result areas, strategic reform initiatives and growth targets aims to propel Malaysia to become a 
high income nation which is both inclusive and sustainable. The plans include modernizing labour laws, public sector reforms, deregulation and liberalization as the basis for competing in the global market place. I would find it useful if Malaysia could share with the Membership what results were 
achieved so far, what problems have been enco untered, and what lessons were learned during the 
process. The role of the private sector will be pivo tal if plans are going to succeed, both in terms of 
which sectors should have priority and in terms of investment. Some elaboration on the role of the 
private sector in the planning would therefore be of great interest so as to understand to what 
degree there is common ownership of these ambitious plans. 
3.11.  From an overall perspective, the link between trade policy and the New Economic Model and 
Vision 2020 seems not to be highlighted to a very  large extent, even though the further opening 
up of the services sector to foreign ownership is one of the measures being pursued.   
3.12.  During the period under review, the services sector continued to be the main contributor to 
GDP with a share of 54.6% in 2012. The services  sector is among the main priorities in the 
ambitious plans going forward under the Vision 2020.  Among the 12 National Key Economic Areas, 
7 concern the services sector. At the same time, Malaysia is undergoing a further liberalization of 18 service sub-sectors as announced in the 2012 Budget Speech. These sub-sectors were 
identified as having high economic impact that  support and serve as enablers to the Economic 
Transformation Program. With this liberalization, the Government envisages stronger growth in the key sectors through expansion or collaboration between local and foreign services suppliers. I note 
that quite a few of the questions in the field of services concern the possibility of foreign ownership 
and participation in services. What are the possibilities for the cross border delivery of services? With the latest liberalization, the system is more liberal than the bindings in both GATS and present FTAs. I also note that, at present, there is a deficit in the services trade with other 
countries. What are the future expectations in this regard?   
3.13.  Coming from an oil and gas producing country, I find the role of the oil and gas sector in the 
Malaysian economy of particular interest. I am particularly curious about the Secretariat’s 
formulation that “to some extent PETRONAS appears to act as an oil fund from the point of view of 
macroeconomic management” given that 48% of go vernment revenue derives from this sector.  
This seems to imply that oil and gas revenue accruing to the Government as dividends, royalties 
and taxes forms part of the regular budget and is not put into a separate fund. With declining oil 
and gas production this would seem to be a challenge in the long term. In this context, it is important to note that the IMF has advised that the Government in its fiscal policy should take into consideration the potential long-term decline in oil related revenue, and that the revenue base 
should be broadened away from volatile oil and gas related receipts. These are important inputs 
into the work in the Government on fiscal consolidation, tax reform and expenditure rationalization. The introduction of the Goods and Services Tax next year will be an important 
measure to widen the tax base, as already mentioned in the Malaysian introductory statement. 
3.14.  Energy subsidies have been high on the agen da i.a. in G20 and the OECD/IEA context for 
some time, and I note that in the case of Malaysia, efforts to change the present system have 
been made. In this context, targeting marginal groups would be a priority as I understand has 
been done in some of the reforms already undertaken. Given that this is a systemic issue of interest to many of the Members, it would be interesting to hear how the Government plans to deal with these challenges.   
3.15.  In manufacturing, Malaysia is generally relatively open to trade and competition, with the 
exception being the automotive industry. With an overall GVC participation rate in the manufacturing sector of 68% Malaysia ranks 7th in the world and has an impressive record of 58% 
when it comes to domestic value addition in expo rt, a rate that has been growing over the review 
period. Malaysia also ranks high in terms of  high-technology export to total exports. WT/TPR/M/292 • Malaysia 
 
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  3.16.  However, the performance over the review period has been mixed, and the manufacturing 
sector is undergoing transformation and restructuring. According to the Government, the manufacturing sector will remain one of the leading contributors to growth. The Government has the stated aim of shifting from resource-based economy to high technology, knowledge based and 
capital-intensive industries such as medical devices and green technologies, such as led-lighting, 
solar panels and generic drug manufacturing. It would be interesting to hear whether the choice of these sub-sectors have been based on certain criteria, and what sort of policy measures the 
Government intends to maintain in order to achieve this. 
3.17.  Malaysia has the ambition to transform the automotive industry to become the production 
hub in the ASEAN region by 2020. At present, this sector is heavily regulated. The Government in January issued a National Automotive Industry Policy in order to fulfil this ambition, which was 
referred to in the Malaysian presentation today. Quite a few of the written questions concern the 
automotive sector and the need for increased tran sparency and competition. It would therefore be 
interesting to hear some details as what concrete measures are foreseen, and to what extent the 
concerns of Members are met in the changes foreseen. 
3.18.  Finally, I would like to touch upon SMEs which according to the reports constitute 97.3% of 
business establishments, and are also highly present in the informal sector. An estimated 90% of 
these SMEs are in services. With this prevalence of SMEs, the elaboration of an SME masterplan to 
support innovation and transformation is understanda ble. At present, the contribution of SMEs to 
the GDP is 32%, and the plan for 2020 is to increase  this to 40%, while at the same time urging 
re-entry into the formal sector. In 2020, the plan is for 62% of employment to be in SMEs and for 
25% of exports to derive from SMEs. To what extent are these plans succeeding up till now? 
3.19.  Overall I have been very impressed by both  the performance and the ambitions of the 
Government of Malaysia. I have also tried to highlight some of the challenges as the Government 
continues its efforts to achieving a high-income advanced economy by 2020. I am sure that the 
Government will continue to further strengthen the economic and trade integration of Malaysia while taking an ecosystem approach to promote the development of the services sector as the 
next engine of growth, and accelerating the shift to high value-added, high technology, 
knowledge-intensive and innovation-based industry. WT/TPR/M/292 • Malaysia 
 
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  4  STATEMENTS BY MEMBERS 
MYANMAR  ON BEHALF  OF ASEAN 
4.1.  Malaysia is a large contributor to ASEAN's economy representing 17% of total trade in the 
region with one of the highest GDP's in ASEAN.  ASEAN in turn accounts for more than 25% of 
Malaysia's international trade, which demonstrates the strengthened trade relationship between 
Malaysia and other ASEAN member States. Malaysia is also one of the top attractors of foreign direct investments into ASEAN, which gives Malaysia a significant part to play in driving ASEAN's 
economic growth and trade. 
4.2.  ASEAN notes Malaysia's solid economic performance during the review period, where with an 
annual average growth rate of 4.1%, Malaysia's real GDP growth rages rebounded after contracting in 2009 from -1.4% to 7.4% in 2010. There was also a steady reduction in the rate of 
unemployment. These positive achievements are built on Malaysia's strength in the service and 
manufacturing sectors where the majority share of total employment lies. 
4.3.  In a regional context, together with ASEAN partners, Malaysia has played a prominent role in 
continuing and actively working towards achieving an ASEAN Community by 2015 in all the three 
ASEAN pillars of political and security cooperation, socio-cultural cooperation, and economic cooperation. With Malaysia set to take over the role of ASEAN Chair in 2015, we are confident that 
Malaysia will take our group towards achieving these goals. 
4.4.  Specifically under ASEAN's Economic Cooperation Pillar, Malaysia has made great strides in 
reaching the targets and deadlines set in the AEC Blueprint, where it has implemented about 88% of the measures. Malaysia has also completed its ASEAN tariff elimination programme where 
99.1% of imports from ASEAN member States are now duty free. On the services front, progress 
has also been made in liberalizing trade in services, financial services and air transport. 
4.5.  ASEAN would particularly like to thank Ambassador Mariam Md Salleh and the Malaysian 
team for their diligent efforts and constructive engagement with all delegations, especially with 
ASEAN members here in Geneva. 
4.6.  We congratulate Malaysia on its economic progress it has experienced over the review period.  
CANADA 
4.7.  I trust that Malaysia views the Trade Policy Review Mechanism, by providing peer review, as 
an important lever for reform. It is in this spirit that Canada has some specific suggestions for how Malaysia can better support its transition to a high income country by 2020.  
4.8.  I offer these suggestions in full recognition of Malaysia’s strong overall economic performance 
since the last review, which the Secretariat report attributes to pragmatic economic management, and appropriately calibrated macroeconomic policies. Indeed, Malaysia's success has earned the 
praise of the IMF, which recognized Malaysia's remarkable resilience in weathering the global 
financial turbulence in its recent Article IV assessment, forecasting an increase in growth from 4.7% in 2013 to 4.9% in 2014. 
4.9.  This positive macroeconomic environment presents an opportunity for Malaysia to continue 
moving forward with structural reforms as a foundation for long-term sustainable growth. Permit me to highlight three core pillars of such reforms: finance, governance, and trade.   
4.10.  With respect to the financial pillar, Malaysia should be commended for moving forward with 
ambitious plans for fiscal consolidation and tax reform, including the implementation of a goods 
and services tax by April 2015. However, long term  fiscal sustainability may require Malaysia to 
look more deeply at how its finances are structured. For example, one-third of Malaysian revenues 
come from PETRONAS, a major state-owned enterprise. Canada is concerned that the dependence 
on PETRONAS may inhibit broader economic reforms, particularly as PETRONAS has publicly warned that its annual dividend to Government may decrease as the company's domestic assets 
decline. WT/TPR/M/292 • Malaysia 
 
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  4.11.  The likely decline in government revenues underscores the need to address directly the 
scope of government subsidies, which are not sustainable in the medium term. The Secretariat report notes that the Malaysian economy remains one of the most highly subsidized in the region and in the world, and Canada has submitted writ ten questions focused on those that are trade 
distorting.   
4.12.  Trade can also be a lever of reforms and growth, and Canada is pleased to note efforts 
aimed at shifting the Malaysian economy from one focused on export-oriented manufacturing to 
domestic services, including through the lifting of  FDI caps in many services sectors. However, 
despite these changes, Canadian companies continue to raise concerns with restrictions that undermine foreign involvement in several areas, including professional and financial services, government procurement, automotive supply, manu facturing, and agriculture, among others.   
4.13.  For example, market access barriers in the fo rm of import duties, quotas, and licenses 
undermine competition, particularly in Malaysia’s agriculture sector. Canada is particularly concerned that Malaysia's import quotas for pork are unnecessarily restrictive. In addition, in late 
2013, Canada learned of new phytosanitary requirements for grains, as well as soybeans, that 
have been partially implemented in January and ar e due to be fully implemented this July. Canada 
was disappointed that Malaysia did not notify its trading partners of these new requirements 
beforehand. Moreover, the new import standards and implementation dates were unclear and open 
to interpretation by each trading partner. Malaysia's agricultural notifications on tariff rate quotas and domestic support are a further example. Ca nada would expect that changes to import 
regulations and standards be communicated to all partners via the agreed-upon formal WTO 
notification mechanism. 
4.14.  After all, transparency provides WTO Members with the right to an accurate and informed 
understanding of their partners' trade policies and practices, which in turn promotes international 
trading opportunities and supports progress in trad e negotiations, including in the follow-up to 
Bali.  
4.15.  Finally, a stool cannot stand on only two legs, and the path to sustainable growth also 
requires progress on the governance pillar. In this  regard, Canada is concerned that Malaysia has 
experienced a fall in Transparency International's Global Corruption Perceptions Index ranking to 53rd in the 2013 listing from 33rd in 2002. Corrupt practices are an impediment to the establishment and expansion of business, and undermine Malaysia's efforts to improve domestic 
competitiveness. While Malaysia did take some steps during the review period, such as the 2011 
Anti-Corruption Principles and the Whistleblower Pr otection Act, its declining ranking suggests that 
stronger anti-corruption enforcement is needed over the long term.   
4.16.  In the time remaining, permit me to say a few words about the Canada-Malaysia bilateral 
relationship. Malaysia is Canada's second largest merchandise trading partner in ASEAN, and has become, more recently, a key Ca nadian investment partner. For example, two-way merchandise 
trade reached more than $2.9 billion in 2013, and the stock of Canadian FDI in Malaysia increased 
by nearly 18% in 2012, reaching $712 million. Malaysia’s investment of $36-39 billion in our natural gas sector, and its onward selling of part of its share to oil and gas interests in Japan and in India demonstrate well that Canada contributes meaningfully to Asia's energy security.   
4.17.  More generally, we welcome Malaysia's active engagement in the International Technology 
Agreement, and is pleased to be working alongside Malaysia through the Trans-Pacific Partnership. 
SINGAPORE 
4.18.  Malaysia is our closest neighbour, and we enjoy longstanding and robust economic ties 
underpinned by strong trade and investment link s and even stronger people-to-people ties. 
Malaysia was Singapore's second largest trading partner in 2013, with bilateral trade growing 
1.2% to US$90 billion. Singapore was also Malaysia's second largest trading partner and largest 
export destination in 2012. Investment linkages are healthy, with growing cooperation reflected in iconic projects such as Iskandar Malaysia (IM) in neighbouring Johor state. According to the Malaysian Investment Development Authority (MIDA), Singapore was the 3rd largest investor in 
Malaysia's manufacturing sector in 2012 with RM2.2 billion. Singapore was also the top destination 
for Malaysian direct investment abroad in 2012.   WT/TPR/M/292 • Malaysia 
 
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  4.19.  We commend Malaysia's continued pursuit of unilateral tariff liberalization since its last trade 
policy review. Simple average tariff rates declined from 7.4% in 2009 to 5.6% in 2013. Malaysia's efforts in trade facilitation to improve customs procedures by shifting customs clearance from clearance-based controls to post-clearance audit controls demonstrates ASEAN's commitments in 
this important area. Malaysia is well on track in its efforts towards our common objective of an 
integrated ASEAN Economic Community (AEC), having implemented over 88% of the AEC Blueprint measures by June 2013 and having completed its ASEAN tariff elimination programme in 
2012. We look forward to Malaysia's leadership as ASEAN Chair in the critical year of 2015 when 
our AEC achievements will be assessed. Tangible benefits from Malaysia's domestic reforms are supported by Malaysia's jump in rankings in the World Bank's Ease of Doing Business index from 37th place in 2010 to 12th in 2013. Malaysia's new National Policy on the Development and 
Implementation of Regulations to make the regulatory process more efficient and effective will also 
benefit traders and investors.   
4.20.  We welcome Malaysia's liberalization efforts in its services sector since 2009, which has 
involved 17 services sub-sectors and other busine ss-friendly reforms. The robust growth of the 
services sector, averaging 5.9% annually from 2009 to 2012 is testament to the positive benefits 
of such liberalization. We look forward to further liberalization in this dynamic sector, and welcome 
Malaysia's decision to become an observer to the WTO Agreement on Government Procurement in 
2012. We hope that Malaysia will consider becoming a party to the Agreement in the future.   
4.21.  As open economies that are highly reliant on trade, Singapore and Malaysia share a deep 
commitment to the multilateral trading system. Both our countries are fully committed to working 
towards the advancement of the Doha Round and the early implementation of the MC9 decisions 
including the Trade Facilitation Agreement. Singapore and Malaysia also cooperate actively in pursuing trade liberalization both within ASEAN and beyond, through initiatives such as the 
Trans-Pacific Partnership (TPP), Regional Comprehensive Economic Partnership (RCEP) and the 
Information Technology Agreement (ITA). We look forward to working with Malaysia as the Chair of ASEAN in 2015 and wish Malaysia well in its pursuit of her goals under its Vision 2020.   
NORWAY 
4.22.  Norway is pleased to note that Malaysia's economy is characterized by growth and 
development and commends the Government for its commitment to relaxing restrictions on competition and FDI, and encourages you to continue these efforts.   
4.23.  Norway values Malaysia's active role and contribution to the work of the WTO and in the 
Doha Development Agenda over the past years. Although we do not necessarily see eye to eye on all issues, we value the comprehensive contact we have in Geneva and appreciate Malaysia's 
constructive engagement and commitment to the multilateral trading system. Norway welcomes 
those measures taken by Malaysia since its last Trade Policy Review in 2010 that has supported the global trading system. 
4.24.  Trade between Norway and Malaysia has over the past ten years increased by 25%, but is 
still rather limited. There is clearly a potential for developing our mutual trade further. In 2013, Norwegian imports from Malaysia amounted to US$300 million. The most important products are machinery, electronics, optics, and rubber products. 
4.25.  Norway's export to Malaysia amounted to US$339 million in 2013, an increase of 
US$130 million compared to 2010. A number of large-scale Norwegian investments have taken place in Malaysia, primarily in the fields of telecommunication, maritime services, and within the 
energy sector. This is a clear indication of the growing attractiveness of the Malaysian market and 
a testament to the Government's recent liberalizati on policies. We note that the services sector 
continued, during the period under review, to be the main contributor to Malaysia's GDP. We have 
been pleased to note that Malaysian service industries support efforts to drive liberalization of 
services markets.  
4.26.  Norway recognizes measures taken to streamline the regulatory framework and the removal 
or reduction of equity and other restrictions on  foreign investment. Furthermore, we welcome the 
declared commitment of the Government to im proving transparency and fighting corruption. WT/TPR/M/292 • Malaysia 
 
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  4.27.  Norway looks forward to seeing negotiators from Norway and Malaysia meet here in Geneva 
later this month for a first round of negotiations on a Free Trade Agreement between Malaysia and the EFTA States. The trade patterns between Malaysia and Norway are complementary, which underpins the assumption of fruitful process to take place. There is a great potential for increased 
trade to be realized by an FTA between Malays ia and EFTA. We are confident that a free trade 
agreement will bring a significant boost to the al ready positive trend in our trading relations. 
Especially in trade in services, there is a significant trade potential to be unlocked.  
PAKISTAN 
4.28.  Malaysia has been making remarkable progress on the path to economic growth and social 
development, underpinned by a strong economic management and macroeconomic fundamentals. During the period under review, its economy und erwent significant external rebalancing in 
response to a decline in external surplus. Malaysia has reaped gains from higher world energy 
prices, being a gas and oil exporter that earned about 35% of government revenue in 2011. Malaysia has successfully reduced exposure to extern al shocks and volatility. The country is aiming 
to become a high income country by 2020 throug h a broad based, all encompassing and highly 
competitive economic structure that involves value-added production chain by attracting 
investments in Islamic finance, services, high-tech production and bio-technology. The economic 
transformation programme encompasses projects and policy measures towards this goal. 
4.29.  Malaysia is a text book example of a successful transition from a poor country to a middle 
income emerging country by effectively managing the transition and creating a harmonious society and a fast developing emerging multi sector economy.  
4.30.  It is also noted that its engines of growth have shifted markedly from export oriented 
manufacturing to domestic services leading to a robust domestic demand to register an annual average growth rate of 4.1% during 2009-2012. Malaysia has also plans to further move into the 
direction of fiscal consolidation, tax reform and expenditure rationalization. Its fiscal deficit decline 
from 6.7% of GDP in 2009 to 4.5% in 2012.During the period, its FDI stock rose by 58.8%, which may be largely a result of a major liberalization effo rt to remove or reduce restrictions on foreign 
equity participation in what the Secretariat report calls “a swathe of services sub-sectors”, 
although FDI limits are identified in fisheries, energy, telecom and air and maritime transport. It 
has also enacted various new trade related laws. Reforms undertaken since 2010 to improve the business environment in Malaysia cut the processing time for dealing with custom permits, 
eliminating and simplifying licensing requirements. Malaysia shifted custom clearance from 
clearance based controls to post clearance audit controls, and evidently its ease of trading across border remains highly ranked in international comparisons. A National Committee on Investment 
was established in 2010 while also introducing Malaysia Corporate Identity Scheme.  
4.31.  Malaysia has a multiplicity of tariff rates. Its average applied MFN tariff rate dropped from 
7.4% in 2009 to 5.6% in 2009 that reflects autonomous liberalization, although there is a 
pronounced tariff escalation. 
4.32.  Malaysia's use of antidumping dropped signific antly, with no case initiated between 2007 
and 2012.  
4.33.  The Secretariat report has noted that the Malaysian economy remains one of the most 
highly subsidized in the region and the world. Th e Secretariat report notes that its reform effort 
has accomplished little so far although there has been a renewed emphasis on these efforts in October 2013.  
4.34.  State involvement in economy continues in numerous areas. Several new changes were 
brought to the legal and institutional framework governing competition policy, and the IP regime was also strengthened.  
4.35.  Pakistan and Malaysia enjoy friendly and sound economic and trade relations, although that 
is not truly reflected in the volume of trade between the two countries. The two countries established the Malaysia-Pakistan CEPA that came into force on 1 January 2008. As a result, the bilateral trade between Pakistan and Malaysia has reached US$2.8 billion. The two countries also 
launched the Malaysia-Pakistan Business Council in 2011. WT/TPR/M/292 • Malaysia 
 
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  AUSTRALIA 
4.36.  Malaysia's economic performance during the review period has been commendable, 
underpinned by sound and pragmatic policies. Australia welcomes Malaysia's goal of becoming a high-income economy by 2020 and supports the efforts Malaysia is undertaking to reform its 
economy to help achieve that goal. While Malaysia will face many challenges during this process, 
Australia knows from its own experience that the road to a stronger economy and increased prosperity lies in this type of structural economic reform. In this respect, Australia welcomes 
measures in Malaysia's 2014 Budget to address fiscal deficit and debt, to strengthen fiscal 
management and to reduce certain subsidies. 
4.37.  Reducing barriers to trade and investment are important aspects of the economic reform 
process and will improve Malaysia's long-term competiveness and strengthen economic growth. 
Policies that favour national or local providers over foreign suppliers often limit choices, increase 
prices and discourage efficiency. Australia encourages Malaysia to further liberalize its goods and services market, including for government procurement, to foster innovation and stimulate 
domestic industry. 
4.38.  Given the importance of foreign investment for sustainable economic growth, Australia also 
encourages Malaysia to address issues that discourage foreign investment, such as affirmative 
action programs that apply to foreign equity limits and restrictions on mergers with local firms in 
certain sectors. Removing or reducing foreign investment restrictions would create a more competitive environment in Malaysia, leading to better allocation of resources and helping to foster innovation and stimulate Malaysia's domestic industry. This would help bring the 2020 goal closer 
to fruition. 
4.39.  Australia's relationship with Malaysia is strong and rests upon a broad network of linkages, 
including education and people-to-people links, defence cooperation, and enduring economic and 
trade ties. 
4.40.  Malaysia is Australia's ninth largest trading partner and our third largest in ASEAN. Two-way 
trade of goods and services was valued at A$17.1 billion in 2012 and around 3,500 Australian 
companies export to Malaysia every year. Regula r meetings of the Joint Trade Committee, led by 
ministers responsible for trade, provide a valuable opportunity to share updates on bilateral trade and economic issues. 
4.41.  The Malaysia–Australia Free Trade Agreement (MAFTA), which came into effect in 2013, has 
been a significant milestone in the bilateral ec onomic partnership and is providing additional 
impetus to the relationship. Tariff reductions under MAFTA are already delivering new opportunities for businesses in both countries. To continue on this upward trajectory, Australia encourages 
Malaysia to turn its attention to reducing non-tariff barriers to trade and investment, particularly in 
relation to services. We thank Malaysia for their collaboration in preparing for consideration of MAFTA later this year in the WTO Committee on Regional Trade Agreements. 
4.42.  Australia is also pleased to work with Malaysia to improve regional economic integration. 
Australia and Malaysia are both members of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), and we work closely an d constructively in other regional trade 
negotiations, including on the Regional Comprehensive Economic Partnership (RCEP) and the 
Trans-Pacific Partnership Agreement (TPP). 
4.43.  Here in Geneva, Australia looks forward to continuing the highly productive relationship we 
have with Malaysia in the Cairns Group, as we strive jointly to achieve a fair and market-oriented 
agricultural trading system. It is not only critical that we implement the agreed outcomes from the 
9th Ministerial Conference in Bali, we must also ensure that agriculture remains central to the WTO's forward agenda, ideally across all three pillars of market access, domestic support and 
export competition. As a WTO Member that has made significant progress in customs reform in 
recent years, and that played a very constructive role in the successful trade facilitation negotiations, we look forward to working with Malaysia to ensure the early entry into force of the new Agreement on Trade Facilitation.  WT/TPR/M/292 • Malaysia 
 
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  MEXICO 
4.44.  Malaysia offers an excellent example of disci pline and proper implementation of economic 
measures, not only to address the international crisis but also to achieve sustained economic growth, which averaged 4.1% over the review period and close to 6% over the past four years, 
2013 included. 
4.45.  This has translated into sound and above all stable macroeconomic figures. In 2013, 
inflation and the unemployment rate were estimated at 2 and 3.1%, respectively, which would be 
the envy of many countries. 
4.46.  Malaysia's economic situation has increased the world's confidence in the country, 
as illustrated by the two concrete examples below: 
 Last December, Moody's credit rating agency assigned Malaysia a sovereign credit rating 
of "A", which further strengthens the country's favourability in the international 
financial markets. 
 The stock of foreign direct investment in Malaysia increased by a factor of 2.5 between 
2000 and 2012, when it reached US$132.4 million. 
4.47.  We wish to highlight Malaysia's efforts to improve ease of doing business in the country, 
inter alia  as regards processing times for dealing with customs permits, licensing requirements, 
and approval of building permits, as a result of which the World Bank's Ease of Doing Business 
report 2014 has ranked Malaysia as the sixth friendliest economy to do business. It is important to note that according to this report, the building requirements indicator jumped 56 notches in barely one year, from 99
th to 43rd position. 
4.48.  On the other hand, some sectors require the Malaysian Government's urgent attention. 
1. Although it is commendable that average applied tariffs dropped significantly to 
reach 5.6% in 2013 and that 65% of them are zero rated, some concerns remain: 
 Almost 20% of industrial tariffs are unbound, which means that there will always 
be an underlying uncertainty. 
 Malaysia's tariff structure is generally complex and dispersed, and 
includes 19 ad valorem  rates, (19 ad valorem , 19 specific, 11 compound, 
and 2 alternate duties). 
 There are still sectors which enjoy much higher levels of protection than the rest 
of the economy: 
 In agriculture, the average tariff (2.9%) is even lower than in the 
manufacturing sector, but some ad valorem  equivalents are as high as 1,439% 
on alcoholic beverages and tobacco. For other products such as cabbages, 
the ad valorem  tariffs may reach 90%. 
 As regards industrial goods, tariffs in the mining subsectors are up to 50% 
in the case of Portland cement, and in the automotive sector, the average tariff 
is more than 17%, i.e. the highest average for all sectors. 
2. In addition to tariff protection, the automotive sector benefits from other instruments 
that protect it from international competition. 
 According to the Secretariat Report, the Automotive Development Fund (ADF) 
and Industrial Adjustment Fund (IAF) continued to provide soft loans and grants to 
parts and component manufacturers. 
 Soft loans are granted for the purchase of locally produced national cars. WT/TPR/M/292 • Malaysia 
 
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   The Customs Administration continues to apply a price system to determine 
the dutiable value of new automobiles, which in practice raises the price of imports. 
3. The administration of non-automatic import licences is complex and the system covers 
a large number of product categories. 
 The complexity lies in the fact that licences are issued depending on the local 
destination of the merchandise, that is, if the goods are destined to the entire territory, licensing applies to 42 categories of products; if the goods 
are to be re-exported, 34 product categories are exempt, as well as, in some states, 
another 14 groups of products. Moreover, 11 government agencies are involved in the granting of licences. 
 We are convinced that Malaysia's business-friendly environment will also have 
a favourable impact on licence administration. 
4.49.  I n  s h o r t ,  w e  w i s h  t o  c o n g r a t u l a t e  M a l a y s i a  o n  t h e  s o u n d  m a n a g e m e n t  o f  i t s  
economic policies and urge it to extend its substantial trade liberalization to other sectors that will 
undoubtedly help achieve the objective of turnin g Malaysia into a high-income country by 2020. 
HONG KONG, CHINA 4.50.  Hong Kong, China and Malaysia enjoy a close and strong relationship that is underpinned by 
multi-faceted and vibrant trade ties. In recent ye ars, trade in goods grew by 7% annually and 
trade in services grew even more robustly, by 9% annually. In 2009, Hong Kong, China and 
Malaysia signed a Joint Declaration on Strengthening Economic Cooperation. And this year, Hong Kong, China will commence negotiations for an FTA with ASEAN. 
4.51.  From an overall perspective, we applaud Malaysia's efforts in liberalization and facilitation, 
which, from our own experience, will help enha nce competitiveness, expand trade and attract 
investment. Malaysia's significant leaps in the Ease of Doing Business and Trading Across Borders 
rankings of the World Bank, are a testimon y to the effectiveness of their reforms. 
4.52.  Turning to the specific aspects of Malaysia's trade policies, we are glad to note that more 
than 80% of Malaysia’s tariff rates are bound. It is also commendable that as a result of unilateral 
reductions, the average applied MFN tariff rate dropped from 7.4% in 2009 to 5.6% in 2013. 
However, it is noted that about 1% of tariff lines remain non- ad valorem  and these lines tend to 
conceal high peak rates. In addition, Malaysia's tariff structure is complicated by the use of different rate bands. We encourage Malaysia to simplify its tariff structure so as to provide greater 
predictability. 
4.53.  On agriculture, while tariffs are generally low, we note that there is still a high level of 
protection in a number of areas. Non- ad valorem  tariff rates are applied almost exclusively on 
agricultural products and they continue to protect alcoholic beverages, tobacco articles and certain 
edible fruits. A number of products, including po ultry, pork, and some dairy products, are still 
subject to tariff rate quotas. Malaysia also continues to provide increasing amounts of 
product-specific and general support to its agricultural sector. While we understand that food 
security is an important issue, we encourage Malaysia further to liberalize its agricultural sector so as to bring in competition which can in turn promote trade and benefit consumers. 
4.54.  On trade facilitation, we are glad that Malaysia has launched various initiatives to improve 
the efficiency and transparency of its Customs regime. On customs clearance, the shift from 
clearance-based controls to post-clearance audit controls and the Authorised Economic Operator Programme will expedite the movement of goods. The “u-Customs” initiative will also provide a 
national single window system for the submission of all import, export and transit information. We 
commend these initiatives that will greatly benefit trade flows. We also look forward to working closely with Malaysia and other Members towards the early implementation of the WTO Agreement 
on Trade Facilitation. 
4.55.  On investment, we are glad to note the progressive liberalization of the services and 
financial sectors since 2009, which has allowed growing foreign presence in the banking, WT/TPR/M/292 • Malaysia 
 
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  insurance, stockbroking and takaful sectors. All foreign equity restrictions in the capital market 
have been lifted with the exception of unit tr ust management companies and credit rating 
agencies. Notwithstanding this, foreign direct investment limits are still found in fisheries, energy, telecommunications and air and maritime transport – all important sectors. And, as the Secretariat 
has noted, the 2010 Competition Act does not cover certain corporations, including those in energy 
and telecommunications. We hope Malaysia will continue its efforts in making further liberalization. 
4.56.  We note that a considerable portion of Malaysia's tariff lines are still subject to import 
licences, most of which are non-automatic and are used as a trade and industrial policy tool for, 
inter alia , regulating the flow of imports and promoting selected strategic industries. We encourage 
Malaysia to switch to automatic licensing or abolish the licensing requirement for further liberalisation. 
4.57.  On services, we commend Malaysia's liberalization efforts, such as removing foreign equity 
restrictions, allowing private ownership of port terminals for specialised cargo, and relaxing citizenship requirements for architects, engineer s and surveyors. The services sector is an 
important pillar in Malaysia's economy as it contributes significantly to the GDP as well as 
employment. From our experience, continued liberalization of trade in services is conducive to further and sustainable economic development. It is also a proven recipe for attracting foreign 
investment. As such, we encourage Malaysia to continue its liberalization efforts. 
SWITZERLAND 4.58.  We appreciate the active engagement of Malaysia in bilateral, regional and multilateral 
economic arrangements which reflects Malaysia's strong integration in the world economy and its 
efforts to continue to open itself to international trade and foreign investments. We welcome in 
particular also Malaysia's positive engagement in the WTO and the Doha Development Agenda and 
in particular also the personal engagement of Ambassador Mariam Salleh here in Geneva. 
4.59.  I am pleased to say that bilateral economic relations between Switzerland and Malaysia are 
excellent and continue to progress in a very satisf actory way, as evidenced by a 10.5% increase of 
our bilateral trade last year. Malaysia is the third most important trading partner for Switzerland 
among the ASEAN countries. As far as investments are concerned, Switzerland is an important 
player in Malaysia, ranking 6th among European countries.  
4.60.  Not only is the quality of our economic relations very satisfying; moreover, Switzerland also 
sees potential to further deepen the cooperation between our two countries, both at the 
multilateral as well as at the bilateral level. Switzerland is convinced that the launch of 
negotiations on a comprehensive Free Trade Agreement between the EFTA states and Malaysia will further strengthen our bilateral relations.  
4.61.  Let me make now a few specific comments. Referring to the subject of intellectual property, 
Switzerland would like to commend Malaysia for the progress made in respect to the protection and enforcement of intellectual property rights. While Switzerland still sees room for further 
improvement in a number of areas, we consider th e simplification and expedition of registration 
procedures for patents and trademarks to be important steps in this regard. We also welcome the introduction of test data protection for pharmaceuticals containing new chemical entities. Furthermore, we appreciate the Malaysian authoritie s stepping up their efforts in the fight against 
piracy and counterfeits, in particular by strengthening enforcement. 
4.62.  We commend Malaysia for many positive developments in its trade and economic policy. 
However, we are also looking forward to see further progress and improvements in some policy 
areas. In this regard, Switzerland has subm itted a number of questions to the Malaysian 
delegation. These relate, inter alia , to Malaysia's intellectual property rights, government 
procurement legislation, corporate governance as well as competition policy. We thank the 
delegation of Malaysia for the answers to our questions that we have just received and which we 
will examine with great interest.  
4.63.  Let me conclude by emphasizing that Switzerland shares with Malaysia a strong interest in 
strengthening the multilateral trading system. A st rong rules-based system, as provided by the WT/TPR/M/292 • Malaysia 
 
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  WTO, remains crucial for highly integrated and open trading economies like Malaysia and 
Switzerland. 
NEW  ZEALAND 
4.64.  New Zealand welcomes this opportunity to comment on the sixth Trade Policy Review of 
Malaysia. Since its 2010 review, Malaysia has maintained a strong overall economic performance 
due to its pragmatic economic management and effective macroeconomic policies. These measures, aimed at bringing Malaysia closer to its goal of becoming a "high-income" country by 
2020, will also benefit the wider WTO community. 
4.65.  New Zealand appreciates Malaysia's efforts to remain strongly outward focused in its trade 
of goods and services, and its major liberalization efforts in its services sector. These are evidence of Malaysia's commitment to maintaining an open and liberal trade regime – one which will 
promote economic development and enhance the well-being of its society as a whole. Malaysia is a 
significant trading partner for New Zealand, wi th this relationship underpinned by two trade 
agreements (the bilateral Malaysia - New Zealand FTA and the regional ASEAN Australia New 
Zealand FTA) which have entered into force in the period since the last review. 
4.66.  New Zealand notes the positive assessments of Malaysia's business environment, in 
particular its rankings in terms of ease of doing business and global competitiveness. These ratings 
should help attract further foreign business and investment. 
4.67.  New Zealand welcomes the actions taken by Malaysia during the review period to further 
liberalize trade in services. Noteworthy, steps include reducing foreign equity limitations in professional services, educational services and environmental services. These should assist the 
growth of these sectors in Malaysia and broaden consumer access and choice. New Zealand is 
encouraged to see new policies being advanced to further facilitate cross-border trade in services, which will help Malaysia advance towards its stated objective of increasing services' contribution to 
GDP to 65% by 2020.  
4.68.  New Zealand also recognizes Malaysia's leadership role in ASEAN on trade and economic 
issues, including its upcoming chairmanship of ASEAN and the East Asia Summit in 2015. This will 
be an important year for ASEAN in realising its aspirations for an Economic Community. It also 
marks the 40th anniversary of ASEAN-New Zealand’s diplomatic relations. 
4.69.  Malaysia's openness to trade liberalization is demonstrated by 7 new regional (RTAs) and 
bilateral trade agreements that have entered into  force during the review period. Three of these 
are ASEAN RTAs with third countries and 4 are bilateral agreements (with New Zealand, Australia, 
Chile, and India). New Zealand commends Malaysia's continued efforts to bolster trade through its Economic Transformation Programme, including through important initiatives such as its 
participation in the Trans-Pacific Partnership (TPP) agreement.  
4.70.  Area of concern raised by others today, notwithstanding its commitment to an open and 
liberal trade regime, the Malaysian economy remains one of the most heavily subsidized in the 
region and the world. We therefore strongly encourage Malaysia's efforts to implement a subsidy 
rationalisation programme. Malaysia's largest single area of subsidization occurs in the energy sector, specifically on petroleum products. We acknowledge the comments made today that indicate Malaysia is increasingly seized of this issue. Subsidies that artificially lower end-user 
energy prices create wasteful energy use and often fail to meet their objectives, distorting trade, 
diverting investment and lowering competitiveness. In the fisheries sector specifically, subsidies also contribute to overfishing and overcapacity and we have posed a number of questions in this 
respect, particularly given the reported overfishing of Malaysian fish stocks. 
4.71.  In support of subsidy rationalisation, we suggest Malaysia consider utilising the APEC 
Voluntary Peer Review for Reform of Inefficient Fossil Fuel Subsidies towards a targeted fossil fuel 
subsidy rationalisation programme with well-designed transitional policies.    
4.72.  In conclusion, New Zealand looks forward to continuing to cooperate with Malaysia 
bilaterally, in regional fora, and in the WTO to help it achieve our shared goal of becoming higher value-added, knowledge-based and innovative economies. WT/TPR/M/292 • Malaysia 
 
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  UNITED  STATES 
4.73.  Malaysia is an important and valued trading partner for the United States. In 2013, it 
ranked as our 20th largest goods trading partner with US$40.3 billion in two way goods trade. 
Bilateral trade in services added another US$3.9 billi on of trade, according to the latest data from 
2012. U.S. services exports to Malaysia were US$2.5 billion in 2012, and imports of services from 
Malaysia to the United States was US$1.4 billion, an increase of 177% over the previous decade. Foreign investment has grown steadily, with stock of U.S. foreign investment in Malaysia totalling 
US$15.0 billion in 2012, an incr ease of 21% from 2011. 
4.74.  The United States and Malaysia continue to work together to further advance the 
multilateral trading system, as well as to deepen and expand our bilateral trade relationship. In October 2010, Malaysia joined the negotiations for the Trans-Pacific Partnership (TPP), which we 
welcomed as an important next step to furthe r enhance the trade and investment relationship 
between our two countries, and to support economic integration across the Asia-Pacific region. 
4.75.  Malaysia's economic policies over the past several years have focused on ensuring 
sustainable and inclusive growth to achieve its objective to become a self-reliant and industrialized 
nation by 2020. To achieve these objectives, the Malaysian Government had planned implementation of an ambitious political, economic, and fiscal reform agenda. 
4.76.  The United States commends Malaysia for the steps it has taken to liberalize its trade and 
trade-related policies since its previous Trade Policy Review in 2010. These steps recognized the importance of services to the Malaysian economy and were intended to advance Malaysia's goal of increasing the share of services as part of Malaysia's overall GDP from the current level of 50.4% 
to 65% by 2020. These efforts included significant liberalization of its services sector. In 2012, 
Malaysia took initial steps to reduce or remove foreign equity restrictions in 17 services subsectors, including in professional services, communication services and distributions services. 
We would appreciate an update on any plans for further liberalization in this sector, particularly in 
light of the important role services plays in Malaysia's 2020 plan. 
4.77.  Malaysia also took steps to improve its attractiveness as a trade and investment destination, 
to further integrate its companies into global value chains, and to develop new trade and 
investment ties. It strengthened its intellectual property rights protection and enforcement during the period of review, including modernization of its Copyright Act, enforcement actions against online piracy, and joining the WIPO Internet treaties. Malaysia also reformed its policies on 
competition and consumer protection and has been active in implementing trade facilitation 
initiatives. Regarding trade facilitation, we hope that Malaysia will continue its leadership as we approach important milestones in the implementation of the Bali agreements. 
4.78.  Despite these positive developments, there are some areas where Malaysia's planned 
economic reforms have slowed or where Malaysia could make further improvements to its trade and investment regime. We encourage Malaysia to continue efforts to improve its intellectual 
property regime, including addressing the relati vely widespread availability of pirated and 
counterfeit products, high rates of piracy over the Internet, and continued problems with book piracy. In addition, we urge it to establish the remaining 12 of the 15 dedicated Intellectual 
Property courts it had planned. 
4.79.  On import licensing, the Secretariat's report states that no major changes have been made 
to Malaysia's import licensing regime, which continues to cover about a quarter of its tariff lines. The United States reiterates its concern with Malaysia's expansive use of import licenses. We 
would appreciate further information on the Government's administrative procedures and its 
justification for the continued use of import licenses on such a broad range of products in light of Malaysia's commitments under the WTO Import Licensing Procedures Agreement. 
4.80.  With respect to automobiles, the United States is disappointed that Malaysia continues to 
apply high tariffs in the automotive sector and imposes non-tariff measures that significantly raise the cost of imported vehicles, including a non- transparent import permit and gazette pricing 
system. Malaysia's new National Auto Policy seeks to transform the country into a regional hub for 
energy efficient vehicles, but it does little to promote structural reform or address longstanding 
trade barriers, even appearing to retreat from prior liberalization commitments. The Secretariat's WT/TPR/M/292 • Malaysia 
 
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  report further mentions that Malaysia has not notified a number of support measures and 
incentives under the National Automotive Program, and we urge it to submit these notifications. 
4.81.  In closing, the United States commends Malaysia for its strong performance overall and the 
progress it has made in liberalizing and reforming its trade regime. We encourage Malaysia to 
continue to pursue reform efforts that will enable it to achieve sustainable growth and further 
integration into the global trading system. We would like to thank the delegation of Malaysia for its active participation in this important process, and welcome the opportunity to continue to work 
cooperatively with Malaysia to further expand our bilateral relationship and to promote the 
multilateral trading system.   
PHILIPPINES 4.82.  The Philippines fully associates itself with the ASEAN statement made earlier by Ambassador 
MAUNG WAI. I would also like to make a few additional points on our bilateral economic 
relationship with Malaysia.  
4.83.  Let me start by thanking the Malaysian Government for its support to the peace process in 
Mindanao, as well as for the assistance it extended to the country in the wake of super Typhoon 
"Yolanda."  
4.84.  The Philippines and Malaysia share longstanding bilateral economic relations as we are each 
other's top trading partners as seen in the vibrant trade and investment relations on all fronts. In 
last week's state visit of President Benigno S. Aquino to Malaysia, both sides reaffirmed keen interest to broaden and deepen the economic relationship in the years ahead.   
4.85.  On bilateral investments, the numbers have been growing steadily. In 2013, the total value 
of Malaysia's Foreign Direct Investment into the Philippines increased more than 5 times since 
2003. Philippine companies have also made substantial investments in Malaysia particularly in the areas of food, textile, and petroleum. 
4.86.  The Philippines lauds the steps taken by Malaysia to continue liberalization in its trade and 
trade-related policies. Moreover, the Philippines notes with interest Malaysia's shift to new economic model from a reliance on a manufacturi ng base dependent on semi-skilled and low-cost 
labour to an economy that is centred on innovative services- and knowledge-based industries. On 
specific sectors, we are reviewing the recently launched National Automotive Policy and how it will provide opportunities for Philippine companies. These developments present various possibilities 
for cooperation for both countries. 
ARGENTINA 
4.87.  As emphasized in the Secretariat Report, Malaysia's economy recovered rapidly from 
contraction in 2009 and moved towards more sustainable and moderate growth rates as, inter alia , 
"the engines of growth shifted markedly from  export-oriented manufacturing to domestic 
services". In other words, robust domestic dema nd offset external weakness and fuelled growth. 
4.88.  The reasons for this phenomenon are in Malaysia's Government Report, which states that 
the factors that contributed to the growth in private final consumption were positive 
income performance, low inflation, and governmental assistance to low- and middle-income households, amongst other measures. This is a telling example of why it is useful – even in strongly external market-oriented economies such as Malaysia – for the State to intervene 
in order to strengthen the domestic market by improving income distribution between the various 
segments of the population. 
4.89.  We accordingly welcome and encourage the Government's ongoing efforts to achieve its 
goal of making Malaysia a high-income nation that is both inclusive and sustainable by 2020. 
4.90.  Turning to trade, we wish to highlight the fact that Malaysia continues to maintain 
a "relatively liberal" agricultural regime – as the Secretariat points out – with applied tariffs 
averaging 2.9%, i.e., less than half of the 6.2% tariff applied to industrial goods. WT/TPR/M/292 • Malaysia 
 
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  CHILE 
4.91.  Chile congratulates the delegation of Malaysia for the work it has done in preparing this 
Review and thanks it for responding to our questions. Our two countries established diplomatic relations more than 30 years ago (in 1979), and ties have since become closer 
in various spheres such as the Antarctic Cooperation, based on a 2007 Memorandum of 
Understanding between Chile's Institute of National Antarctic Research and Malaysia's Academy of Sciences. 
4.92.  As regards trade relations, our countries share the same views on international trade. 
This is reflected in our participation in APEC, where Malaysia supported Chile's entry, and the Trans-Pacific Partnership Agreement (TPP) negotiations, where Chile supported Malaysia's 
entry. In the WTO, we have common views on agricultural liberalization through the Cairns Group. 
4.93.  As to bilateral trade, a fairly comprehensive Free Trade Agreement has been in force 
between our two countries since April 2012, covering trade in goods, rules of origin, customs procedures, technical barriers to trade, sanitary and phytosanitary measures, trade remedies, 
safeguards, cooperation, transparency and disp ute settlement. The Agreement also includes 
an evolving clause for the negotiation of chapters relating to services and investment. Since this is South America's first Agreement with Malaysia, Chile has become Malaysia's entry point 
and platform in the region. The Agreement is su pplemented by various double taxation and air 
services agreements, which has further intensified our trade relations. In 2013, trade between our two countries amounted to almost US$500 (473) million. 
4.94.  Chile acknowledges Malaysia's macroeconomic progress during the period under review, 
especially as regards inflation control, sustained growth, narrowing of the fiscal deficit 
and the low rate of unemployment. As evidence of  the country's robustness, we note the increase 
in foreign direct investment to 58.8% in a time span of only four years. At the same time, we urge 
Malaysia to pursue its efforts to liberalize the services sector. 
4.95.  It is common knowledge that our country is opposed to any kind of economy- 
or trade-distorting subsidy. We accordingly urge Malaysia, which is one of the most subsidized 
economies in the world, to step up its reforms aimed at streamlining the subsidies regime. 
We likewise consider that Kuala Lumpur should increase the country's competitiveness in the global economy by simplifying its complex system of customs duties, by reducing import 
prohibitions and, unquestionably, by eliminating trade-distorting export restrictions. It should also 
continue to drive changes to reduce State intervention in economic sectors such as government 
procurement, services and key strategic utilities. 
4.96.  Lastly, we have every confidence that thanks to its stability and the implementation 
of various domestic reforms, as well as by following its national motto "Unity is Strength", 
Malaysia will succeed in becoming a self-s ufficient and industrialized nation by 2020. 
CHINA 
4.97.  China notes with pleasure that Malaysia's economic fundamentals remain sound. Since the 
last TPR in 2010, Malaysia has maintained stable economic growth and its robust domestic demand has successfully offset external weakness. Malaysia has stepped into a more sustainable growing period as one of the most vigorous and promising economies at Asia-Pacific region. 
4.98.  There are some other impressive features I would like to highlight. Firstly, various initiatives 
have been taken by Malaysian Government to improve its business environment, and to encourage public and private collaboration, which are conducive to attracting foreign business and investment 
in Malaysia. Secondly, during the period under review, applied MFN tariff of Malaysia has been 
reduced from 7.4% to 5.6%. Thirdly, trade facilitation efforts from Malaysian Government continued by easing trade across borders. Fourthly, autonomous efforts have been made in 
liberalizing 17 service subsectors, including educational, environment and health-related services. 
4.99.  That being said, we believe there are still some areas in which Malaysia could improve so as 
to better integrate itself into the global value chain. Examples include: a considerable portion of Malaysia's tariff lines are still subject to import licensing, most of which non-automatic; only WT/TPR/M/292 • Malaysia 
 
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  limited Malaysian companies can obtain import permit on such goods as silk fabric, which hampers 
foreign distribution business in Malaysia; mining products are still subject to high tariff protection, export licensing and export tax, etc. 
4.100.  On the multilateral aspect, we commend Malaysia for its consistent support for the 
multilateral trading system and taking WTO as the core of its foreign trade policy. Malaysia has 
been actively engaging in the DDA negotiations and strongly supported Bali Harvest and made its due contribution in delivering the Bali package. China will continue to cooperate with Malaysia to 
push for a successful discussion on Post-Bali work  programme and the eventual conclusion of the 
Doha Round. 
4.101.  On bilateral aspect, Malaysia has become No. 1 trading partner and No. 2 investment 
destination among ASEAN members with China. We note with pleasure that the ASEAN Free Trade 
Area (AFTA) is now in place, and work is going on as to deepen the cooperation under 
ASEAN-China FTA. China hopes that these initiatives could further benefit the business community as complimentary to the multilateral trade rules. 
COLOMBIA 
4.102.  Some countries are frequently cited as models of successful development. Malaysia 
is unquestionably one of the most striking examples, in that it has raised the quality of life 
of its population by reducing poverty levels from nearly 50% in 1970 to less than 2% in 2012 
and almost tripled its per capita GDP in the past 20 years. 
4.103.  More remarkable still is that Malaysia is maintaining this growth trend by implementing 
a series of macroeconomic policies that have enabled it to achieve average annual growth 
of over 4% and to maintain moderate rates of inflation and a comfortable level 
of international reserves. 
4.104.  As has been the case for centuries, Malaysia's economy is strongly outward-looking. 
To that extent, we are pleased to note in the Secretariat report that the country's trade policy has 
undergone many positive developments in this shor t period of three years, including the following: 
 Reduction in foreign investment restrictions in a number of services subsectors. 
 Cutting of processing times for dealing with customs permits. 
 Establishment of a committee to assess and approve investment projects in a more 
swift and streamlined fashion. 
 Introduction of a Malaysia Corporate Identi ty scheme to simplify business interactions. 
 Unilateral tariff cuts as a result of which the average applied MFN tariff rate dropped 
from 7.4% in 2009 to 5.6% in 2013. 
 Drop in recourse to anti-dumping action. 
 Requirement that government entities follow certain steps in developing regulations 
affecting trade and investment. 
4.105.  Thanks to a number of these improvements, Malaysia was ranked very favourably 
in the Doing Business Index, the Global Competitiveness Report and the Global Enabling Trade 
Report. They have also led to the country's growing participation in global value chains. 
4.106.  Notwithstanding the above and other positive developments, some areas would appear 
to give WTO Members cause for concern: 
 Persistence of discriminatory FDI policies. WT/TPR/M/292 • Malaysia 
 
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   High tariff protection for certain agricultural products as a result of non- ad valorem  
tariff rates. 
 The fact that Malaysia is a highly subsidized economy. 
 Heavy dependence on PETRONAS as the largest contributor to the government 
budget. 
 A considerable number of tariff lines are subject to mostly non-automatic import 
licensing. 
4.107.  Although the domestic policy considerations underlying this kind of measure may well 
be justified, it is necessary to ensure that such measures do not have a negative impact on the operation of the multilateral trading system. 
4.108.  Lastly, we wish to highlight the key role Malaysia has assigned to trade policy in order 
to enable the country to emerge as an industrialized nation by 2020 thanks 
to the New Economic Model. 
4.109.  Since this model emphasizes diminished regulatory activity and liberalization as a basis 
for competing in the world market, this will pose challenges for Malaysia. These challenges include 
attracting greater investment, promoting increased competition, and focusing on both greater value-added and knowledge-intensive activities. 
4.110.  We are convinced that Malaysia will achieve its objective of becoming a high-income 
country which is both inclusive and sustainable.  In the words of Prime Minister Najib on the 
occasion of the third anniversary of the impl ementation of the Economic Transformation 
Programme: "It is my wish that everyone, rich or  poor, rural or urban, regardless of race, can 
participate in the journey to transform the economy and take the country to high-income". 
THAILAND 4.111.  Thailand is very pleased to have an opportunity to participate in the sixth Trade Policy 
Review of Malaysia. We also associate ourselves with the ASEAN statement to be delivered by 
Ambassador Maung Wai of Myanmar. 
4.112.  Malaysia is our neighbouring country and has remained among our top five trade partners 
for the past six years. We have maintained a very strong trade relationship as Thailand is 
Malaysia's fifth export destination and import source and Thailand is in Malaysia's fifth largest trade partner. 
4.113.  Malaysia’s economic performance during the review period has been remarkable and 
equipped with pragmatic economic management and carefully calibrated macroeconomic policies.  
Examples of impressive indicators are: the annu al average rate of economic growth at 4.1% 
during 2009-2012, the low inflation rate at 1.7% in 2012, one of the lowest in the Asia-Pacific 
region, and the low unemployment rate of 3% in 2012. Malaysia's promising and stable economic 
status is also reaffirmed with the prudent monetary policy, resulting in surplus trade and current account balances and increasing foreign exchange reserves.  
4.114.  We have seen and considered Malaysia's effo rt in trade liberalization and reforms in 
various trade-related areas valuable and meaningfully contributing to the regional and multilateral trade. 
4.115.  As ASEAN members, we appreciate Malaysia's effort in liberalization in services sectors 
since 2009. The cooperation among ASEAN members during the review period allowed us to 
achieve further comprehensive ASEAN agreements, co vering trade in goods or ATIGA, investment 
or ACIA and customs matters, and ASEAN RTAs wi th Australia and New Zealand, India and Korea. 
We are looking forward to continuing our close coll aboration in the future work with Malaysia under 
ASEAN, to accomplish an ASEAN economic comm unity by 2015 and to conclude the Regional 
Comprehensive Partnership or RCEP negotiations.   WT/TPR/M/292 • Malaysia 
 
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  4.116.  From the multilateral trade perspective, Thailand commends Malaysia for undertaking 
different reforms to enhance business environment, to mention a few, simplifying licensing requirements, reducing time for dealing with customs permits and approval of construction 
permits. Moreover, Malaysia shows her commitments to the multilateral trading system by 
unilaterally making tariff cuts, causing applied MF N tariff rate to decrease from 7.4% in 2009 to 
5.6% 2013, maintaining the high-standard trade facilitation measures, and reducing the recourse to antidumping actions during 2007-2011. 
4.117.  Thailand has submitted concerns and questions on some of Malaysia's aspects of trade and 
trade-related measures, which we would like to seek clarification, including the implementation of the Goods and Services Tax, the coverage of “proje cts of strategic and national importance” in the 
investment regime, the “gazetted price system” in relation to customs valuation, the policy and 
measure to promote export of Malaysia's goods, the local-content condition to be exempt from 
import or excise duties, and the Copy right Voluntary Notification system.  
4.118.  We welcome Malaysia's response provided to us on Friday. The response will definitely help 
both the public and private sectors, includin g business people, better understand Malaysia's 
policies and regulations, which in turn will lead to enhance and strengthen our trade and investment relationship. 
4.119.  In closing, Thailand would like to express its gratitude to the delegation of Malaysia for 
today's presentation and their response to our ques tions. We are also grateful for our bilateral, 
regional and multilateral relationships with Malaysia, especially in ASEAN, and for Malaysia's active role in this Organization. I would like to specifically extend my appreciation to Ambassador Mariam 
Md Salleh and her staff for their continuous cooperation with me and my officers. We wish 
Malaysia another very successful trade policy review.   
JAPAN 
4.120.  Let me start with Malaysia's macroeconomic environment and policies. According to the 
report by the Secretariat, Malaysia's economy gr ew at an annual average rate of 4.1% between 
2009 and 2012. This economic performance was led by good economic management and 
macroeconomic policies and mainly supported by strong domestic demand. Japan hopes that 
Malaysia will continue to promote its structural reform and other sound economic policies and maintain its strong economic growth. 
4.121.  Now let me move to trade and trade-related policies. We have two points here: WTO and 
RTAs. 
4.122.  First, WTO. Since the last TPR, Malaysia was not involved in any new WTO dispute 
settlement cases as a respondent. Japan hopes that Malaysia will continue to observe the WTO 
rules. In addition, Japan commends Malaysia's positive attitudes on the trade liberalization in the 
WTO including its active participation in the negotiation of ITA expansion.  
4.123.  With regard to the ITA negotiations, Malaysia seems to relate its social and religious 
matters to the tariff negotiations. Since such matters are not trade matters and therefore should 
be addressed by domestic regulations, Japan also  hopes that Malaysia will review its position. 
4.124.  Second, RTAs. Japan commends that Malaysia i s  t a k i n g  a n  a c t i v e  r o l e  i n  s u c h  R T A  
negotiations as the TPP and the RCEP, in which Japan is also participating. Furthermore, the report 
by the Secretariat mentions that 7 new RTAs entered into force for Malaysia during the review 
p e r i o d .  J a p a n  h o p e s  t h a t  M a l a y s i a ' s  R T A s  w i l l  b e  o p e r a t e d  s o  t h a t  t h e y  w i l l  c o m p l e m e n t  t h e  multilateral trading system. 
4.125.  Now, let me turn to specific points. We will refer to three points: policies favourable to the 
ethnic Malay community (Bumiputera), administrative procedures, and customs procedures. 
4.126.  First, the Malaysian Government issued a new policy to provide economic support, 
amounting to 3.1 billion Ringgits, to Bumipu tera on 14 September 2013. Although Japan 
understands the needs of a social policy, such a policy should be consistent with the WTO WT/TPR/M/292 • Malaysia 
 
- 28 - 
 
  commitments and Malaysia's continuous trade liberalization policy. Japan asks Malaysia not to 
implement this policy in a way that brings about protectionism. 
4.127.  Second, administrative procedures. Concerning the bidding system for infrastructure, it is 
reported that Japanese enterprises are facing problems related to administrative procedures 
including the lack of transparency. For exampl e, the procedures after the biding are not 
necessarily implemented according to the schedule. Also, there are some cases where companies not meeting the bidding requirements actually participate in the bidding. Japan requests the 
Malaysian Government to address these problems. 
4.128.  Third, customs procedures. The system of au thorized customs brokers are introduced at 
places like Kuala Lumpur Airport, Johor Bharu Airport, and Pasir Gudang Port. One of the problems is that that the number of such authorized customs brokers is limited. It is also reported that, due 
to the heavy regulations, customs brokers without the authorization cannot supply the door to 
door services. Japan hopes that Malaysia will make efforts to relax and/or remove such regulations. 
4.129.  Before conclusion, Japan appreciates Malaysia’s answer to our written questions in 
advance. However, we still have some questions which Malaysia has not responded in the circulated documents. Japan is looking forward to receiving them in due course. 
REPUBLIC
 OF KOREA 
4.130.  As the Secretariat's report points, Malaysia has developed its economy through appropriate 
macroeconomic policies and pragmatic economic management, which resulted in both its inflation and fiscal deficit being effectively in check. During the review period, Malaysia not only rapidly 
recovered from recession in 2009, it actively undert ook major liberalization efforts, particularly in 
services sector. It is worth mentioning that restrictions on foreign equity participation in various services sectors and subsectors have been removed or reduced. We believe that such an approach 
and these accomplishments certainly can serve as  an example for other WTO Members to follow. 
4.131.  We also note that Malaysia has been an acti ve participant in regional trade agreements, 
with 7 new RTAs entering into force during the review period. Currently, Malaysia is participating in 
the Transpacific Partnership (TPP) and ASEAN Regional Economic Partnership (RCEP) negotiation. 
In light of the fact that Malaysia's trade in goods and services accounts for 162.4% of its GDP, we welcome Malaysia's focus on greater integration into the global value chains. 
4.132.  On the bilateral front, Malaysia is an important trading partner for Korea due to the two 
countries' complementary industrial structures. Malaysia is our 16
th largest trading partner and 4th 
largest among the ASEAN countries, with the trade volume reaching US$19.7 billion in 2013. Regarding investment, Malaysia is Korea's 10
th largest investment destination globally and 3rd 
largest within ASEAN, with a total stock of dire ct investment reaching US$18.1 billion. We now 
have every reason to expect a further deepening of our economic cooperation due to the various cooperation channels in force. 
4.133.  That said, we would like to note a couple of specific points that merit our attention: 
 First, the average gap between bound and applied MFN rates of Malaysia appears to 
have increased at least by 10 percentage points. Given that the tariff still remains to be one of the main trade policy instrument s, such gap which may allow considerable 
leeway for raising applied tariffs needs to be reduced. 
 Second, while we welcome Malaysia's observer status to the Government Procurement 
Agreement, we would like to see Malaysia further improve its market access and 
transparency with regard to the Government Procurement. 
 Third, although Malaysia has consistently provided notifications to the WTO, there 
have been long submission gaps in areas, such as TRQs and domestic support in 
agriculture. WT/TPR/M/292 • Malaysia 
 
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  EUROPEAN  UNION 
4.134.  The last review of Malaysia was in 2010. During the period under review, Malaysia has 
showed a positive economic performance, with a GD P growth of around 5% in these last years and 
with low rates of inflation and of unemployment. 
4.135.  Malaysia is nowadays an open multi-sector and economically prosperous country, listed by 
the World Bank as an upper middle income econom y. For this reason, Malaysia is no longer a 
recipient of the EU GSP Scheme as from January 2014.  
4.136.  Malaysia's positive results can be read as the outcome of the liberalization of the 
manufacturing sector launched a couple of decades ago. Malaysia is now trying to replicate this 
success story across its economy and beyond manufacturing, via the ongoing reforms introduced in 2010 by the Malaysian Government, aimed at securing its long term development goal to 
become a knowledge-based economy and developed country by 2020. 
4.137.  The EU appreciates these measures and acknowledges that Malaysia is demonstrating that 
international trade is not a zero-sum game and that welfare gains can be realized via unilateral 
liberalization and dismantling of existing trade ba rriers and restrictions on investment. We are fully 
aware that these policies and measures are not easy  to push through, but we can only encourage 
Malaysia to pursue the good work and extend the liberalization effort beyond the sectors affected 
to date.    
4.138.  A word on our bilateral relationship. Cooperation in trade and economic issues started back 
in the 80s, in the framework of the EC-ASEAN Agreement and have been the driving force for 
closer ties between the EU and Malaysia. Malaysia is nowadays the EU's second largest trading 
partner in ASEAN. Our bilateral trade amounts to around €35 billion. In terms of FDI, the EU, in 
aggregate, has consistently been the largest source for the last few years. These elements speak of our good and vibrant bilateral trade and investment relations.  
4.139.  The EU has an interest in further intensifying the bilateral relations with Malaysia and in 
this respect negotiations, aiming at the conclusion of a bilateral Free Trade Agreement, are ongoing.   
4.140.  Despite these positive aspects, the EU has a number of questions and concerns as regards 
Malaysia's trade and investment policy making.   
4.141.  Turning to the EU questions, let me stress that they cover several areas of Malaysia's 
economy. The issues we raised are considered and confirmed by EU operators as obstacles to 
trade. I will list only some of them: 
 First of all, the EU notes a general lack of transparency, both ex ante  and ex post , 
which may deter traders and investors. In our written questions, we particularly 
insisted on this aspect as it affects several areas of Malaysia's trade policy. 
 Secondly, we are concerned by the massive use of non-automatic import licensing, as 
confirmed also by the Secretariat report, and by the lack of predictability and 
transparency of the Malaysian licensing regime. In particular, we consider that the 
Automatic Permit in the  automotive sector is clear example of a quota regime not in l i n e  w i t h  W T O  r u l e s .  W e  w o u l d  b e  i n t e r e s t e d  t o  k n o w  M a l a y s i a ' s  p l a n s  t o  m a k e  i t s  national automotive policy more open for  competition.  
 Thirdly, although the EU recognizes that Ma laysia has moved in the right direction in 
terms of reform and liberalization of its services sector, we think that some more work remains to  be done. For instance, by improv ing the transparency and predictability of 
licensing procedures in a variety of services sectors and in pursuing the liberalization 
drive in a number of services sectors where equity caps remain and licensing procedures are non-transparent and often open to arbitrariness.  WT/TPR/M/292 • Malaysia 
 
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  4.142.  The EU is confident that this TPR will help Malaysia in reviewing its own policies so as to 
ensure that they are most favourable for attaining its economic objectives while respecting its international commitments in this forum. 
INDONESIA 
4.143.  We are pleased to be here today for participating in The sixth Trade Policy Review of one of 
our fellow ASEAN members. With other ASEAN members, Indonesia and Malaysia have been 
working closely to make ASEAN a dynamic organizati on and a force for good to be reckoned with, 
in ensuring peace and stability as well as promoting cooperation and prosperity in the region. We 
are confident that with its strong commitment to integration and dedicated participation, Malaysia will continue to make significant contributions for the achievement of "One Vision, One Identity and One Community" of ASEAN. 
4.144.  We also appreciate Malaysia's contribution in the WTO forum. Malaysia is an active 
participant in the Doha Development Agenda (DDA) round of negotiations as well as in the regular works of the WTO. We believe that Malaysia has a strong commitment to give its best efforts to 
make post-Bali work programme successful, and to conclude the DDA negotiations. 
4.145.  In light of the trade policy review, we note with positivity that Malaysia has performed well 
on its open trade regime. As indicated in the Secretariat's report, Malaysia strongly maintained 
outward-oriented economic policies, which played an important role in recovering its economy 
rapidly from the contraction in 2009 and moving towards more sustainable and moderate growth rates. We are also aware that within ASEAN, Malaysia is highly committed to intensify economic integration among members, including removing trade barriers and improving trade facilitation.  
4.146.  In this remarkable opportunity, please allow me to share how Indonesia and Malaysia have 
been engaging in mutual trade relations. The Governments and the Peoples of the two 
neighbouring countries have long maintained strong and friendly bilateral relations and we are 
important trading partners to each other. Malaysia's trade balance with Indonesia has been 
growing significantly over the past four years. Our trade with Malaysia increased by 30% to US$23.5 billion in 2012; from US$18 billion in 2010.  In 2012, our export to Malaysia reached 
US$11.2 billion while our import was US$12.2 billion. These figures reflect the strong economic 
ties between both countries and Indonesia has every confidence that our countries' economic partnership will continue to grow in the future. 
4.147.  Despite the considerable growth of our trade relations, we realize that there are still 
several challenges in our way to smoothen furt her our bilateral economic relations. These 
challenges include, among others, Indonesia's concerns related to a number of Malaysia's trade policies which have caused rather unfavourable impacts to Indonesia's export interests. We have 
submitted a number of questions related to these concerns to the Malaysian delegation and we 
thank them for having provided the responses. We will analyse these responses and will come back with follow-up questions if necessary. 
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
4.148.  Malaysia's recent outstanding record of economic growth is very impressive and is to be 
congratulated. We are very happy to know that Malaysian's economics expansion this year will be 
even stronger as projected. 
4.149.  Regarding Malaysia's trade and trade-related policies, in addition to the written questions 
a l r e a d y  s e n t  b y  m y  d e l e g a t i o n  i n  a d v a n c e ,  t h e r e  a r e  a  f e w  m o r e  p o i n t s  w e  w o u l d  l i k e  t o  r a i s e  
today, of both a general and a specific nature. 
4.150.  Firstly, on WTO issues, with Malaysia's growing role as a major player in world trade, we 
are pleased that it continues to be an active participant in the regular work of the WTO, and is 
committed to strengthening the multilateral trading system. Malaysia is already a Party to the 
WTO Information Technology Agreement (ITA), as well as a signatory to the GATS Protocols on 
Telecommunications and Financial Services. Even greater engagement from Malaysia would now be very welcome in other related areas, for exampl e, by its becoming a party to the GPA. Indeed, WT/TPR/M/292 • Malaysia 
 
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  we strongly encourage the Malaysian Government to initiate its accession process to join the GPA 
as soon as possible. 
4.151.  Secondly, on the subject of export restrictions or prohibitions, we have the impression that 
in order to reduce domestic prices, exports are discouraged by taxation and other means on 
several essential goods, for example, wheat flour and sugar, which could possibly be affecting the 
food security of the net food importing Members.  If this is the case, perhaps Malaysia might 
reconsider the need for keeping such measures in place. 
4.152.  Thirdly, on the subject of notification obligations, we notice that Malaysia may not be 
up-to-date with notifying the WTO as required, for example, notification MA:2 on market access to 
the Committee on Agriculture, and some others regarding SPS regulations. We would therefore ask Malaysia to ensure that it fulfils its obligations in this respect. 
4.153.  And lastly, a specific point regarding export subsidies. Malaysia's agriculture sector is 
reported to have experienced a high level of grow th, of up to 5.8%, for the period under review, 
due to a higher output of palm-oil. According to Malaysia's notifications, however, palm-oil related 
products continue to receive export subsidies from the Government. Bearing in mind that the 
elimination of export subsidies is one of the goals of the DDA, we are wondering if Malaysia has plans to address this subject in the foreseeable future with a view to coming up with alternative 
policies where necessary. 
4.154.  In terms of bilateral trade, we are Malaysia's 8th largest trading partner in both imports 
and exports. The total trade amount reached US$16.3 billion in 2013. Moreover, we are its 4th largest source of foreign direct in vestment. It is fair to say that we enjoy a very close and mutually 
beneficial trading relationship with Malaysia. 
COSTA
 RICA 
4.155.  Costa Rica also wishes to congratulate Malaysia for its outstanding economic performance 
over the review period, in terms of real GDP growth, inflation control and the low 
rate of unemployment. Such performance lays the ground for Malaysia to achieve its goal of high-income status by 2020. We were struck  by the broad-based and ambitious Vision 2020 
programme, which has already begun to bear fr uit, as evidenced by Malaysia's ranking 
at 6
th position in the World Bank's Ease of Doing Bu siness Report 2014, its very favourable position 
in the Global Competitiveness Report and its improved ranking in the Corruption Perception Index. 
4.156.  Malaysia has a strongly outward-looking economy. Trade in goods and services accounts 
for 162% of its GDP. It is therefore hardly surprising that Malaysia should be an active participant 
in the WTO. Malaysia is our third largest trading partner in Asia after Hong Kong, China, and China. We also note with considerable interest that it participates in other regional 
and bilateral initiatives, as well as in much broader processes under APEC and in the TPP, 
which seek to consolidate and drive its trade liberalization agenda forward. 
4.157.  Costa Rica is involved together with Malaysia in several global value chains, 
in the IT products sector, for example. It would be interesting if Malaysia could share 
with WTO Members its experience in respect of th ese global value chains and pinpoint the success 
factors. The Secretariat report indicates, among other things, that Malaysia's comparative advantage appears to be shifting from electrical goods and electronics manufacturing towards 
processed commodities and natural gas. It would also be interesting to know more about 
the reasons for the shift and whether it has occurred as a result of the policy objectives set by the Vision 2020 programme. 
4.158.  Foreign direct investment in Malaysia grew by 58.8% between 2008 and 2012 
and was directed mainly to manufacturing and services activities. Owing to its buoyancy 
and growth in recent years, the services sect or has received the largest share of approved 
investment. Various services subsectors have benefited from liberalization policies. It would 
be interesting to know what Malaysia's plans are for consolidating these reforms, what its plans are for liberalizing other sectors that have no t yet received any investment, and what other 
measures Malaysia is considering to ease restrictions and thus increase FDI flows. WT/TPR/M/292 • Malaysia 
 
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  4.159.  Lastly, we wish to highlight the trade facilitation initiatives implemented by Malaysia 
to regulate and modernize the customs administration. Such measures boost foreign trade as a whole, for both exporters and importers, and are essential to successful participation in global value chains. They benefit all of Malaysia's trading partners and are aimed 
at implementing the recently established Trade Facilitation Agreement. 
TURKEY 4.160.  The reports indicate that, under the review period, Malaysia has demonstrated strong and 
successful economic performance by calibrating it s fiscal, monetary and growth priorities. The 
country has also exemplified good private and public sector governance. 
4.161.  In particular, it is important to underline the fact that Malaysia has also performed well in 
its demand switching policies by shifting from an export reliant manufacturing sector towards 
domestic services. 
4.162.  This step seems to have helped its economy to reach a manageable and satisfactory 
economic growth level against the negative e ffects of weak global demand and recession 
conditions. 
4.163.  In terms of trade policy developments, it is obvious that Malaysia has been among the 
most important successful trade reform stories of both recent decades and review period. 
4.164.  Although Malaysia has some tariff peaks and escalations, some import measures and tariff 
gaps have increased a bit, Malaysia in general has been deepening its trade liberalization and maintain a responsible and transparent policy orientation. 
4.165.  We are aware that, geographically, although Malaysia's trade policy is focused on 
Asia-Pacific in general and ASEAN in particular, the country has continued its efforts to diversify its 
trade partners via negotiating new RTAs and bilate ral trade agreements incl uding one with Turkey. 
We hope that our future agreement will also a dd value to Malaysia's diversification efforts. 
4.166.  The Secretariat report mentions that Malaysia is seriously focused on jumping into higher 
economic level and status by 2020. We are of th e view that, although there are of course some 
areas requiring for further reform such as export taxes, tariffs, subsidies, regulatory issues, and 
the balance between private and public sectors, it seems that Malaysia will continue to make 
decisive steps and reform its trade and economy to reach 2020 target and objectives. 
4.167.  In this context, I should mention that Malaysia has already further improved its standards, 
strengthened its customs clearance system, eased its trading across the borders, made important 
strides towards a good competition and IP governance. 
4.168.  Finally, as was also underlined in the Secretariat report, although there are significant 
areas for further reform, maintaining a successful and stable macroeconomic and growth 
trajectories under the recession and review peri od, keeping also its trade policy and structural 
reforms on track, and not resorting to protectionist policies, it seems that Malaysia will not probably face much problems in reaching its ambitious 2020 targets. 
URUGUAY 
4.169.  Uruguay commends Malaysia for its strong overall economic performance during the period 
under review and its sustainable and inclusive gr owth, driven by pragmatic economic management 
and appropriately calibrated macroeconomic policies, which have enabled Malaysia to build a very 
open economy. 
4.170.  As regards bilateral trade, Uruguay's imports exceed its exports. Our exportable supply 
consists mainly of food products whilst imports from Malaysia are more diversified, with more 
than 250 high value-added products. 
4.171.  It is also important to point out that Uruguay is currently awaiting Malaysia's 
seal of approval – both sanitary and religious - fo r Halal beef slaughter. Uruguay ceased to export WT/TPR/M/292 • Malaysia 
 
- 33 - 
 
  beef to Malaysia as of 2011 because it did not have bodies accredited by the 
Government of Malaysia for certification of Halal slaughtering. 
4.172.  Our export plants must be exclusively dedicated to Halal slaughter so that Uruguay 
can certify that Halal meat has not at any time entered into contact with other meat and that 
the meat-processing plants concerned do not slaughter pigs. 
4.173.  Approval of a major Uruguayan dairy plant is also pending. 
4.174.  Our country is highly interested in securing the approvals for access to the 
Malaysian market and is confident that these will soon be forthcoming. 
4.175.  One of the priority objectives of Uruguay's trade relations with Malaysia is to improve 
market access conditions for the above-mentioned products and other exports. 
BRAZIL 
4.176.  Brazil notes with satisfaction that Malaysia has been able to recover expeditiously from the 
contraction its economy experienced in 2009. Malaysia is an example of how economies may benefit from trade as a tool for growth and sustai nable development. As noted by the Secretariat, 
trade in goods and services account for 162% of its GDP. 
4.177.  Of course, this model cannot be replicated elsewhere without taking into account each 
country's peculiarities and concerns, but it reveals that a fair and clever insertion in international 
trade may play a significant role in raising income and promoting employment. 
4.178.  Sound economic policies enabled Malaysia to control an inflation spike occurred between 
2009 and 2011 without harmful effects on employment. It is indeed commendable that Malaysia is working in virtually full employment, with only 3.1% of the population unemployed in 2013. 
4.179.  The central role of trade is evidenced by the Malaysian approach to food security. This is a 
matter of concern for many countries, Brazil included. We do, however, appreciate that Malaysia seems to indicate that protectionism is not the answer to food security worries. Indeed, the focus 
has been changed from self-sufficiency to ensuri ng availability, accessibility and affordability of 
food to Malaysian population and the main tool for that is trade. 
4.180.  As reported by the Secretariat, Malaysia is a party to many regional and preferential trade 
agreements. This, however, without prejudice to Malaysia's longstanding commitment to the 
multilateral trading system, which should be praised. 
4.181.  Let me now turn to the bilateral trade relations between Brazil and Malaysia. The total flow 
amounted to US$3.5 billion in 2013. This number makes Malaysia our third trade partner in 
ASEAN, slightly behind Thailand and Indonesia. There is, of course, room for improvement of such 
figures. Brazil has been holding a consistent deficit in its trade with Malaysia, and our exports are highly concentrated on commodities such as suga r, corn and iron ore, whereas Brazil imports 
goods of higher value added from Malaysia, such as integrated circuits and ink for printers. Brazil 
looks forward to exploring bilaterally opportuniti es to increase and diversify these exchanges. 
4.182.  Brazil is undertaking a constructive bilateral engagement with Malaysia in order to receive 
"halal" certification for certain meat products. Br azilian establishments have been inspected by 
sanitary crews in 2011 and 2013 and hope to soon be  granted "halal" certification to export to the 
Malaysian market. This would not only mean market access in Malaysia, but also a very important acknowledgment of the Brazilian ability to meet the one of the higher "halal" standards in the 
world. 
PERU 4.183.  As other Members have said this morning, our delegation welcomes Malaysia's strong 
overall economic performance during the period under review, driven by appropriately calibrated 
macroeconomic policies which have ensured sustainable growth in order to turn Malaysia into a high-income country by 2020. Members know that Malaysia remains externally competitive, WT/TPR/M/292 • Malaysia 
 
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  with a comparative advantage that is shifting from electrical goods and electronics manufacturing 
towards processed commodities and natural gas. 
4.184.  It should also be emphasized that Malaysia's economy is outward-oriented 
and its trade in goods and services account for 162. 4% of GDP. Although it is relatively well 
diversified and increasingly centred on the Asia-Pacific region, manufactures remain the main 
traded goods. Malaysia has a growing stock of foreign direct investment, which rose by close to 60% between 2008 and 2012. 
4.185.  However, the Secretariat report also emphasizes that import prohibitions are maintained 
mostly for national security, religious, and environmental reasons. A considerable portion of Malaysia's tariff lines remain subject to import licensing, most of which is non-automatic. Grants, tax concessions, and low-interest loans continue to support production and trade 
of various agricultural and manufactured products, and encourage SMEs, R&D, 
and environmental protection activities. The Malaysian economy remains one of the most 
highly subsidized in the region and the world, in which State involvement persists in numerous 
areas such as oil, gas, key strategic utilities, and services. It would therefore be important to know 
more about Malaysia's medium- and long-term plans to remedy this situation. 
4.186.  At the bilateral level, Malaysia and Peru are part of the Asia-Pacific Economic 
Cooperation (APEC) forum, and at the WTO they ar e both members of the Cairns Group. Together 
with another 12 countries of the Asia-Pacific region, they are currently negotiating the TPP. 
4.187.  The value of Peru's exports to Malaysia increased from US$10 million in 2008 
to US$56 million in 2013. Of this amount, US$43 million concerned non-traditional exports 
in the agricultural, minerals, and fisheries sectors. Non-traditional exports in 2013 involved 
agricultural products, non-metallic minerals and chemicals. 
4.188.  Imports from Malaysia amounted to US$159 million in 2008 and increased to more 
than US$200 million in 2013, 56% of which concerned consumer goods and 32% capital goods. 
We expect the level of trade and investment to increase, and in particular Peruvian exports, as the balance of trade shows a deficit for Peru. 
4.189.  Lastly, we have an agreement on the reciprocal promotion and protection of investments 
to encourage investment in both countries. 
ECUADOR 4.190.  The Secretariat report shows that it took some time for Malaysia to recover from 
the economic crisis. The time span covere d by this review saw the implementation 
of macroeconomic support and fiscal stimulus policies and the application of trade liberalization policies favouring the country's exports. 
4.191.  Sound management of public finances has brought inflation down to single figures 
and generated small but sustained fiscal surpluses, despite rising prices among raw materials, foods generally, and fossil fuels. 
4.192.  As regards imports, Malaysia is one of Ecuador's major ASEAN partners. During 
the review period, Ecuador's imports amounted to some US$30 million and its exports to around US$40 million as an annual average. Although at first glance the balance appears to be in Ecuador's favour, it is tempered by the fact that Ecuador's export supply to Malaysia 
encompasses 29 lines, compared to more th an 500 lines for imports from Malaysia. 
4.193.  During the period under review, Ecuador's ph ytosanitary service was advised of a change 
in the phytosanitary requirements of Malaysia's Crop Protection and Plant Quarantine Division, 
to prevent the potential spread of South American Leaf Blight (SALB). It should be noted that 
in recent years Malaysia has become a potential market for Ecuadorian exports of cocoa beans of the CCN-51 variety, which means that a phytosanitary measure lacking technical grounds could 
have a negative impact on trade between the two countries. WT/TPR/M/292 • Malaysia 
 
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  4.194.  In regard to the above, Ecuador appreciates the responsiveness of the 
Malaysian authorities, which have expressed readiness to visit the cocoa-growing areas and familiarize themselves with the certification process. Ecuador's phytosanitary authorities are thus awaiting a visit from their Malaysian counterparts to verify the certification processes 
for cocoa bean for export and to review the production and control processes performed 
by AGROCALIDAD and the private sector. 
4.195.  Ecuador hopes that this trade policy review of Malaysia will lead to better access 
to its market, particularly for agricultural products from developing countries. 
INDIA 4.196.  We are glad to know that the economic policies of Malaysia are geared towards achieving 
its goal of becoming a high-income nation throug h an inclusive and sustainable approach by 2020 
and, in this regard, it is committed towards investing in higher value-added industries for its 
export led growth. Further, its commitment to maintain high economic growth despite uncertainties and challenges in the global economy is noteworthy. In this regard, we welcome the 
New Economic Model (NEM) comprising four key pillars. We also welcome Malaysia's trade policy 
focus on greater integration into the world economy and enhancing its global position as a trading nation, while continuing to accord high priority to the rules-based multilateral trading system 
under the WTO to safeguard the interests of developing countries, as well as ensuring that world 
trade is conducted in an orderly manner. 
4.197.  Malaysia is India's third most important trading partner amongst the ASEAN countries and 
also India's gateway to ASEAN and China. India is the largest trading partner for Malaysia in South 
Asia. In the decade since 2000, growing India-Malaysia ties across the board have triggered new 
dimensions in bilateral commercial and economic relations. With the coming into-force of the India-Malaysia Comprehensive Economic Cooperation Agreement (CECA) from 1 July 2011, the 
bilateral economic engagement has received a major boost. The broad objective of the agreement 
is to enhance trade and investment flows between the two countries and contribute to their reciprocal economic growth. The CECA is a si ngle undertaking covering goods, services, 
investment and other areas of cooperation. The new framework provides significant new 
opportunities for economic collaboration and is expected to lead to stronger commercial and economic ties at the governmental as well as business-to-business levels. 
4.198.  Bilateral trade between India and Malaysia in creased by 7.3% to US$13.32 billion in 2012 
as compared to US$12.53 billion in 2011. Malaysia's exports to India were worth US$9.50 billion 
and imports from India were valued at US$3.82 billion in 2012. India's export to Malaysia saw an increase of 15.9% corresponding to the same period of last year. India is the 8
th largest trade 
partner for Malaysia globally. The trade is thus imbalanced in Malaysia's favour. 
4.199.  Malaysia is currently 19th largest investor in India with FDI inflows from April 2000 to 
September 2013 standing at US$618.37 million. But if investments made through the third 
country route are also included, cumulative Malaysian investments in India till date stand in excess 
of US$6 billion. Malaysia is emerging as a major potential investor in India, with investments in the pipeline in power, oil refineries, telecommunication and electrical equipment industries, besides highway and other infrastructure development projects. 
VIET
 NAM 
4.200.  We are well aware that, like most other countries, Malaysia has also been affected by the 
global economic and financial crisis. However, by pragmatic economic management and 
appropriately calibrated macroeconomic policies, Malaysia's economy rapidly recovered from 
contraction and has been moving towards sustainable and inclusive growth in order to turn Malaysia into a high income country by 2020. 
4.201.  Bilateral economic relationship between Viet Nam and Malaysia has always been stronger 
year by year. Viet Nam and Malaysia have signed  several agreements, from trade to investment 
and tourism, from scientific and technical to communication cooperation, from cultural to tourist cooperation. The two way trade between the two countries has been bigger and bigger, from about 
US$4 billion in 2007 to US$9 billion in 2013. WT/TPR/M/292 • Malaysia 
 
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  4.202.  In terms of investment, by the end of 2012, Malaysia had 433 projects with registered 
capital of roughly US$11.3 billion, ranking 7th out of more than 9 countries and territories investing 
in Viet Nam, and ranking 2nd among ASEAN members. 
4.203.  Viet Nam welcomes Malaysia's active participation in the Doha negotiations and its full 
support for the agenda, especially after the succe ss of Bali package at MC9, we share our view 
with Malaysia to continue our effort for the success of DDA and the strengthening of the multilateral trading system that can deserve contribution to economic development of our 
Members. 
KINGDOM
 OF SAUDI  ARABIA 
4.204.  The Trade Policy Review reports prepared by Malaysia and the Secretariat reveal the 
resiliency of the Malaysian economy, which has shown an overall strong performance in recent 
years and a rapid recovery following the global economic downturn in 2008. Malaysia has 
maintained stable growth, low inflation, low unemployment, and surpluses in trade and current account balances.   
4.205.  These positive indicators are undoubtedly due, in part, to the economic reforms that 
Malaysia has implemented since the 2010 launch of an ambitious New Economic Model. One of the 
four pillars of this Model is the Economic Transformation Programme, which focuses on a wide 
range of twelve National Key Economic Areas and is supported by six Strategic Reform Initiatives. 
The Model aims to propel Malaysia to industrialized country status by 2020. Under this Model, Malaysia has made great efforts to improve its trade policy and further open its economy through unilateral measures.   
4.206.  Malaysia’s economic reform efforts are already bearing fruit. From a 2010 rank of 23 for 
“Ease of Doing Business” by the World Bank, Malaysia has moved up to rank 6 in the 2014 report.   
4.207.  As an important and long-standing bilateral trading partner, the Kingdom of Saudi Arabia is 
happy to congratulate Malaysia on these accomplishments. Trade with Malaysia has increased 
dramatically in recent decades. From US$260 million in 1990, total bilateral trade surpassed US$3.5 billion in 2012. Saudi Arabia has emerged as Malaysia's 19th largest trading partner, 22nd 
largest export destination, and 16th largest source of imports. The importance of Malaysia to the 
Kingdom of Saudi Arabia is revealed by the US$100 million total Saudi investments in the country.  
4.208.  The Kingdom of Saudi Arabia follows with great interest the development of current and 
potential partnerships between Saudi and Malaysian companies, in many areas such as machinery, 
appliances and parts, building and construction ma terials, palm oil, processed food and beverages 
as well as wood products. 
4.209.  The Kingdom of Saudi Arabia welcomes the helpful role played by Malaysia in 
strengthening of the international trading order.  In addition to being a key Member of this 
Organization, Malaysia has continued to negotiate bilateral and plurilateral trade agreements, including as part of the Organization of the Islamic Conference, which is quite unique as it 
comprises 57 members spread over four continents. 
4.210.  The Kingdom of Saudi Arabia believes the multilateral trading system is a key element for 
our development. We are encouraged by the succe ss in Bali. But this is only a step forward. 
Malaysia has a long standing tradition of constructive and forward-looking participation in the 
WTO. Consequently, we welcome Malaysia’s continued leadership with the example of its own 
economic development and in the multilateral context to secure the conclusion of the Doha Development Agenda and allow the WTO to address new challenges.   
EGYPT 
4.211.  Egypt would like to congratulate Malaysia for its significant economic performance, We 
note that the Malaysian economy continued to gr ow at steady pace during years 2010-2012, 
achieving 6.1% an average annual increase of GDP, a remarkable rise in foreign exchange 
reserves from around US$70 billion in 2010 to ar ound US$136 billion by the end of 2013, and an 
average annual increase in per capita income of 7.5% in the past five years.  WT/TPR/M/292 • Malaysia 
 
- 37 - 
 
  4.212.  Egypt strongly supports Malaysia's objective of achieving a high income economy and 
developed nation status by 2020 ”Vision 2020”. 
4.213.  Malaysia and Egypt enjoy very special bilateral relations in all spheres, and the ties of 
economic relations were manifested by the signing of the comprehensive Economic Partnership 
Agreement in January 2013. We look forward to the enforcement of this agreement which will 
strengthen already dynamic economic relations. 
4.214.  Egypt values Malaysia's active role and contribution to the work of the WTO, including in 
the Doha Development Agenda. We commend Malaysia's constructive engagement and 
commitment to the multilateral trading system. 
LAO PDR 
4.215.  Lao PDR associates itself with the ASEAN statement delivered by H. E. Ambassador Maung 
Wai of Myanmar. 
4.216.  As a regional partner within ASEAN, Lao PDR recognizes and commends Malaysia for its 
commitment to multilateral trading system and its efforts to further liberalize its trade-related 
policies. 
4.217.  Malaysia is an important partner of Lao PDR and the sixth largest foreign investor in Lao 
PDR. Over the past decade, bilateral trade re lations between the two countries have seen a 
growing trend, with potential for further development. Lao PDR and Malaysia continue to work 
together not only in trade and investment, but also in tourism, education and other fields of cooperation. Lao PDR has also been granted unilate ral preferential treatments by Malaysia under 
ASEAN Integrated System of Preferences (AISP) scheme. 
4.218.  At the multilateral level, Malaysia is an active participant of the Doha Development Agenda 
negotiations as it offers vast benefits not only to the global trading community at large, but also in enhancing trade among developing countries. 
4.219.  We are pleased to note that Malaysia has undertaken, since its last TPR, among others, the 
reforms in competition policy and consumer protection, as well as efforts in liberalizing the services sector. We also note that Malaysia has an outstanding performance in facilitating trading 
across borders and active participation in global value chains, as well as the developments in SPS 
and TBT areas.  
4.220.  Lao PDR is confident that our economic partnership will continue to grow in the future, 
especially as both countries are members of ASEAN which envisions further regional economic 
integration through ASEAN Economic Community by  2015, when Malaysia will be the ASEAN Chair 
that year. 
4.221.  Let me conclude my statement by expressing appreciation to Malaysia for its commitment 
to multilateral trade processes and voice our shared belief in the importance of a rules-based 
multilateral trading system. 
NIGERIA 
4.222.  Nigeria is pleased to note from the Secretariat report that Malaysia's strong overall 
economic performance during the period under review was led by pragmatic economic management and appropriately calibrated macroeconomic policies. The economy continued to undergo a significant external rebalancing due to a decline in external surpluses, while policies 
continue to ensure sustainable and inclusive growth in order to turn Malaysia into a high income 
country by 2020 (Vision 2020). Despite a slowdown in total factor productivity (TFP) growth during 2008-12, Malaysia remains externally competitive with its comparative advantage seemingly 
shifting from electrical goods and electronics manufacturing towards processed commodities and 
natural gas. It would be interesting if Malaysia would provide information on the strategy it is using to ensure that younger generation adapt to Vision 2020. WT/TPR/M/292 • Malaysia 
 
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  4.223.  Malaysia continues to negotiate new regional trade agreements (RTAs) both bilaterally and 
together with its ASEAN partners. Seven new RTAs  entered into force for Malaysia during the 
period under review. Three are ASEAN RTAs with third countries (Australia and New Zealand, India, and Korea), and four are bilateral agre ements (with Chile, India, New Zealand, and 
Australia). Malaysia has signed and ratified the Tr ade Preferential System of the Organization of 
the Islamic Conference (TPS-OIC) and the Deve loping Eight Preferential Tariff Arrangement 
(D8-PTA); these are expected to enter into force imminently. Malaysia is in the process of 
negotiating RTAs with Turkey, the European Union,  and the European Free Trade Association. It is 
a participant in the Trans-Pacific Partnership (TPP) negotiations as well as in the ASEAN Regional Economic Partnership (RCEP) negotiations. 
4.224.  In view of the foregoing, Nigeria would like Malaysia to share with us its overall RTA 
strategy, which appears to combine both bilateral and multilateral objectives. It would also be 
interesting to hear how Malaysia reconciles possible conflicts or inconsistencies between its bilateral trade agenda and the multilateral trade agenda. 
4.225.  Bilateral relations between Nigeria and Malaysia have been characterized by cooperation 
and trust between the leaders of the two countries, and set to continue to grow through the desire 
of our two countries to forge ahead in addressing the important issues that would make the world 
a better place to live. The bilateral relations generally cover political, economic and socio-cultural 
spheres. We cherish our ties with Malaysia and would continue to do our best to consolidate these ties as well as the furtherance of relations in other spheres. Nigeria like Malaysia share common belief on the intensification of south-south trade as a major vehicle of enhancing the integration of 
developing countries into the multilateral trading system. 
4.226.  As an important Member of the WTO, Malaysia has remained a supporter of the multilateral 
trading system. In this context, we wish to acknowledge the constructive and proactive 
engagement of the delegation of Malaysia in Geneva. WT/TPR/M/292 • Malaysia 
 
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  5  REPLIES BY THE REPRESENTATIVE OF MALAYSIA AND ADDITIONAL COMMENTS 
5.1.  Malaysia would like to thank the Members for the additional questions and comments made 
on Monday. In all, Malaysia has received 470 questions from 27 Member countries. We have responded all questions received in writing. However, we received questions late last night and 
early this morning. We will respond to them in due course. 
5.2.  On the first day's session, 33 Members took the floor highlighting various issues. I will now 
respond to the questions raised along three broa d themes, i.e. economic environment and trade 
policy regime, trade policies and sectoral policies.  
ECONOMIC ENVIRONMENT AND TRADE POLICY REGIME 5.3.  In my presentation on Monday, I addressed ma ny of the reform measures undertaken since 
the last TPR. I also shared with you the impact from the economic and Government transformation 
programmes. Let me recap: the impact is seen in our strong economic growth, despite the global 
economic uncertainties; continued healthy expansion of trade, FDI in 2013 was the highest on record, Gross Fixed Capital Formation grew by 8. 2% in 2013 led by robust private sector capital 
spending amidst a contraction in public investment growth. 
5.4.  Even as Members commended us for our economic performance, a number of the Members 
also highlighted that Malaysia is one of the most heavily subsidized economies. This was 
referenced from the Secretariat report that states that Malaysia's total subsidies amounted to 
about US$14 billion in 2013. Nevertheless, what is important is that Members of the WTO level this "subsidy playing field" so that we can eliminate distortions in the global market. 
5.5.  The Malaysian Government is also well aware of these concerns and has put in place 
progressive measures to reduce the extent of subsidies in the economy. We have removed 
subsidies on sugar and have in place a mechanis m to remove energy subsidies in phases. On 
Monday, 3 March 2014, our Prime Minister announce d that the Government will intensify subsidy 
rationalisation in the 11th Malaysia Plan, 2016-2020. He stressed that subsidy rationalisation is 
crucial if the Government is to raise allocation under the Plan. Subsidy rationalisation is now coupled with a more efficient distribution of assistance to targeted groups. This would help the 
vulnerable groups to mitigate the impact of the rise in the cost of living. 
5.6.  The Government, however, will not compromise on  delivering social services like education, 
healthcare and welfare. Any rationalisation of subs idies for these services will be aimed at more 
efficient and effective delivery of these services without compromising service standards. 
5.7.  There were concerns raised on our narrow revenue base, and our dependence on oil 
revenues. We are cognizant that this is not sustainable and we are taking appropriate measures to address this. PETRONAS too has evolved through the years. Today, it has expanded into some 
30 countries, 30% of its revenues come from overse as, from international ventures that include 
not just oil and gas production but also downstream activities and retail as well as oil and gas related and consulting services. 
5.8.  It must be pointed that the Government's non-oil revenue has grown faster, at an average 
9% from 2009-2013 compared with 1% for oil-related revenue during the same period. In total, our tax revenue has grown at an average of 12% in the past three years. The stronger growth in non-oil revenue has contributed to the steady increase in the share of non-oil revenue to total 
revenue from 59% in 2009 to 69% in 2013. 
5.9.  The introduction of the Goods and Services Tax (GST) in April 2014 is integral to our efforts 
to widen our revenue base and improve tax administration. We are also working on enhancing 
governance and the reduction of leakages through smuggling and under-declaration. 
Anti-Corruption Measures 5.10.  On anti-corruption, the Malaysia Anti-Corruption Commission was established in 2009. The 
MACC reports to Parliament. The fight against corruption is a key focus of the Government 
Transformation Programme. Michael Hersham, of Tr ansparency International, is the Chair of the WT/TPR/M/292 • Malaysia 
 
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  International Performance Review Panel that is the oversight for the GTP and ETP. Also, as of this 
year, there is a requirement for the presence of a senior MACC officer in each high-risk ministry and agency.  
Domestic Regulatory Reform 
5.11.  A comprehensive review of institutional and regulatory mechanism has been undertaken to 
dismantle and remove burdensome processes and regulatory barriers that can impede 
liberalization initiatives. This is done sectorally and in a structured manner, using the OECD model 
of Good Regulatory Practice (GRP) as a basis. This process is ongoing. 
5.12.  To ensure the quality of new and existing re gulations, ministries and agencies need to 
comply with GRP and fulfil the adequacy criteria  which emphasise transparency and accountability. 
This is consistent with international practice of regulatory coherence. 
5.13.  Ministries and agencies will also be required to undertake Regulatory Impact Analysis (RIA) 
when introducing new regulations. Three ministries/agencies are currently participating in the RIA pilot projects. 
Free Trade Agreements (FTAs) 
5.14.  There were also questions about how Malaysia's involvement in Free Trade Agreements 
(FTAs) complements the WTO. We see such bilatera l and regional FTAs as building blocks towards 
the multilateral trading system. All our FTAs, whether bilateral or through our involvement in 
ASEAN, are comprehensive, of high quality and WTO consistent. Once the DDA negotiations are 
completed, we hope the rubric would fall in place and strengthen the global trading system.  
SME Development 
5.15.  The Discussant asked about our SME Masterplan and our efforts at moving our SMEs into 
the formal sector. Let me first give you a broad overview of SME development in Malaysia. The SME Corporation functions as the Central Coordina ting Agency for SME development. Twice a year 
the Prime Minister chairs the National SME Development Council. This is an inter-ministerial body 
that monitors the implementation of SME developm ent, in general, and the implementation of the 
SME Masterplan, specifically. The SME Masterplan, launched in 2012, was developed in 
collaboration with the World Bank. Six areas have  been identified to support SME development: 
Innovation and Technology; Human Capital Development; Access to Financing; Access to Markets; Legal and Regulatory environment; and Infrastructu re. Specific ministries and agencies have been 
assigned to each of these six areas, while SME Corp tracks the implementation and effectiveness 
of the programmes.  
5.16.  To encourage SMEs and micro-enterprises to move into the formal sector, we have 
simplified the registration process and reduced the cost of registration. The legalized entities are 
provided start-up grants and soft loans. Small traders are persuaded to register their businesses. 
There is also the Referral Centre to assist and support the SMEs. 
Government Linked Companies (GLCs) 
5.17.  A number of Members questioned the role of Government Linked Companies or GLCs and 
the need to reduce state intervention. GLCs have a role in nation building as well as providing for socio-economic development. However, we do realize that they may have the effect of crowding out the private sector. As such we implemented the GLC Transformation Programme to enhance 
collaboration and co-investments with the privat e sector. Also, our GLCs are not exempted from 
the implementation of the Competition Act. 
TRADE POLICIES 
Tariffs 
5.18.  Questions were raised regarding the non- ad valorem  duties maintained by Malaysia 
especially on agriculture products. Our process of reviewing the non- ad valorem  duties will be WT/TPR/M/292 • Malaysia 
 
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  done within the ambit of the Doha Round negotiations. Similarly, the initiative to increase the 
number of lines to be bound will also be undertaken in the Doha Round negotiations. 
Tariff Rate Quotas (TRQs) 5.19.  On Tariff Rate Quotas (TRQs) implementation, beginning 1 April 2008, TRQs were imposed 
on 18 tariff lines of crops and livestock products. Mala ysia will notify the level of utilization of these 
TRQs for the period under review, subject to reso lution of some transposition issues with the 
Secretariat.  
Trade Facilitation  
5.20.  At-the-border and behind-the-border, effectiven ess is very important for an open economy 
like Malaysia. A committee comprising the relevant ministries, private sector members, logistics providers and port authorities work to streamlin e processes and procedures and manage issues 
related to trade facilitation. In preparation for the 11th Malaysia Plan, we are also undertaking a 
thorough review of the logistics chain with the ai m of addressing the hard and soft infrastructure 
concerns.  
5.21.  O u r  N a t i o n a l  S i n g l e  W i n d o w  w i l l  b e  i n t e g r a l  t o  t h e  U - C u s t o m s ,  w h i c h  w o u l d  b e  f u l l y  
operational in 2015. Under the ASEAN Trade in Goods Agreement, Malaysia, Brunei and Singapore are involved in a pilot project for self-certifica tion. Malaysia has appointed 108 Certified Exporters 
(CE) or Authorized Economic Operators (AEOs) comprising manufacturers and traders. 
5.22.  On Customs Valuation, Malaysia's valuation rules and process of determining the value of 
imports are consistent with the WTO Customs Valuation Agreement. 
5.23.  Malaysian Customs has also implemented a risk management system which allows Customs 
to implement post auditing, thus facilita ting Customs clearance and efficiency.  
Import Licensing  5.24.  I must correct the perception that one quarter of our tariff lines are subjected to import 
licensing. This is not the case. As I indicated on Monday, we abolished licensing requirements on 
1,218 tariff lines out of the 2,428 lines previously. And this process of reviewing the need for import licence is ongoing. For automobiles, the non-automatic licensing will be phased-out in 2015 
for used vehicles (open APs), and 2020 for new vehicles (franchise APs). 
5.25.  There was the issue of lack of notification fo r the introduction of new import requirements 
for 10 agricultural products. We wish to inform this body that Malaysia will implement these new import requirements only after the required notification process has been adhered to.  
Government Procurement (GP) 
5.26.  Malaysia will undertake extensive consultations before deciding to join the WTO GPA. Even 
as we consider joining the GPA, we are reviewin g the existing procurement rules and procedures 
with the aim of improving the Government procurement policy and enhancing transparency.  
Intellectual Property Rights (IPRs) 5.27.  Some Members have also raised questions on Malaysia’s IPR regime and enquired about 
measures taken to address enforcement of IPR laws in Malaysia. Our IP laws are in conformance 
with international standards and are TRIPs consistent. 
5.28.  The protection of IPR is an on-going pr ocess and the Government is continuously 
intensifying enforcement. On IP courts, to date , four have been established and the Government 
shall increase the number based on necessity. If the situation warrants it, we will do so. It's a case 
of managing our resources. At the sub-federal le vel where IP courts are not yet established, IPR 
cases are heard in the Sessions Court. WT/TPR/M/292 • Malaysia 
 
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  SECTORAL POLICIES 
Services 5.29.  As I informed you on Monday, we have taken aggressive unilateral steps in liberalizing 
services sub-sectors that would have meaningful impact on the economy. Equity conditions have 
been fully removed for most. The process is ongo ing for the four professional services pending 
amendments to legislations and subsequent tabling in Parliament.  
Fisheries 
5.30.  Malaysia's fuel subsidy programme and fish landing incentives for the fisheries sector are 
either intended for food security or poverty eradication. This is a socio-economic programme to support poor artisanal fishermen. 
5.31.  The Government is committed to maintaining maximum sustainable yield while ensuring 
that there is no overfishing. This is done by: 
 constant monitoring of the resource situation; 
 input control regime (through measures such as the zoning system, limit of fishing 
vessels, vessels tonnage, type of fishing gear and engine capacity); and 
 limiting the issuance of new or additional licenses for fishing in coastal waters. 
CONCLUSION 
5.32.  In conclusion, on the implementation the WTO Trade Facilitation Agreement, Malaysia is 
ready to commit almost 100% of the provisions under  Category A, with none to be placed under 
Category C. There will be a few provisions to be placed under Category B where Malaysia sees the need to introduce amendments to current domest ic legislations and improvements to existing 
infrastructure, which will take a longer time. 
5.33.  I would like to take this opportunity on behalf of my delegation, to thank all Members for 
participating in our review. Members' questions, interventions and constructive comments are 
highly appreciated. I would also like to exte nd special thanks to the Chairman, Discussant 
H.E. Ambassador Harald Neple, the Secretar iat and not forgetting the interpreters.  
DISCUSSANT 
5.34.  I would first of all like to thank Dr. Rebecca Santa Maria for her statement in response to 
the discussion we had on Monday. Our meeting on Monday confirmed the overall good impression we all have of the good performance of both th e Malaysian economy and its trade policy. But, as 
the interventions demonstrated, there are also concerns as to some of the policies Malaysia is 
pursuing. I mentioned some of those concerns on Monday. I will not repeat them today, but 
instead touch on some other issues that were raised. 
5.35.  I would like to start with government procurement, and take note of what Dr. Santa Maria 
has just stated concerning the need to have a thorough internal process in order to evaluate 
whether to join the Agreement on Government Procurement. Government procurement remains a vital aspect of Malaysia's financial management, as public expenditure consumes a considerable 
amount of allocations, at 13% of GDP. During the period under review, government procurement 
continued to be used as a tool for achieving socioeconomic and development objectives aimed, inter alia , at encouraging greater participation of the "bumiputera" in the economy, transfer of 
technology to local industries, reducing the outflow of foreign exchange, creating opportunities for 
local service-oriented companies, and enhancing export capabilities. At the same time, 
government procurement should be conducted in compliance with the principle of public accountability, transparent, best value for money, open and fair competition, and fair dealing. 
However, international tenders are only invited when domestic goods and services are not 
available. In domestic tenders, preferences ar e provided for "bumiputera" suppliers and other 
domestic suppliers. The question is whether these practices actually mean that the aim of best 
value for money and fair competition is being achieved. WT/TPR/M/292 • Malaysia 
 
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  5.36.  Some comments were also made concerning Government-linked companies, and this was 
commented on in the Malaysian intervention today. Although Malaysia has gradually reduced its direct participation in enterprises through past divestment and privatization efforts, Malaysia still retains large industrial and commercial holdings at federal and state levels, either directly through 
the Ministry of Finance Inc. or indirectly through several fully state-owned entities in the form of 
Government linked companies. GLCs remain a significant part of the Malaysian economy as they have been used to spearhead infrastructure and industrial projects, and have a large role in 
strategic sectors. Procurement policies of these GL Cs and other SOEs seem to be similar to those 
of ministries and other government bodies, but are not covered by the same rules. Procurement 
from local sources is encouraged, which again gives rise to the question of best value for money. During the period under review, Malaysia has been  pursuing its GLC Transformation Program, and 
divestment has been considered, but has not taken place. Plans going forward in the policies vis à 
vis GLCs would be of interest. 
5.37.  In spite of Malaysia's good records in “Ease of Doing Business”, many of the comments from 
delegations dealt with the need to improve tran sparency, linked to import licensing, import 
prohibitions and export restrictions. It would therefore seem that further improvements are needed here. Improved transparency might also help in the continued fight against corruption. I 
welcome the focus on corruption in the Malaysian statement, and note that regulatory reform 
would also be an important element in this regard. 
5.38.  I had intended to raise the implementation of the Trade Facilitation Agreement, today, but 
will now limit myself to welcoming the clear commitment of Malaysia to put most of the measures 
in category A, and to put no measures in catego ry C. This is an example for other Members to 
follow. 
5.39.  Finally in closing and reverting to Malaysia 's ambitious plans to become a high-income 
nation by 2020, I would pose the question to wh at extent does Malaysia intend to change the 
wide-spread use of trade policy instruments in order to achieve the aim of increased competitiveness of the domestic industry and increased participation in the higher value end of 
global value chains. Continued use of subsidies an d protection might not yield the desired results, 
and reforms might be necessary if the ambitions are to be met. 
EUROPEAN
 UNION 
5.40.  Trade policies review offers a regular opportunity not only to discuss and debate a Member's 
trade policies, but also for increased transparency. In this respect, the Government and the 
Secretariat reports offer a wealth of information, and questions from Members offer the possibility to dwell on issues of particular interest or that need to be illuminated further. 
5.41.  The EU has asked a number of questions reflecting the interest we have in Malaysia's trade 
policies, but also concerns. 
5.42.  The EU thanks Malaysia for the answers alread y provided in preparation for the meeting as 
well as for the statement today. However, th e brevity and sometimes lack of substance in 
Malaysia's answers has not quite appeased our interest and appetite for knowledge about Malaysia's trade policies. Therefore, the EU has a certain number of follow-up questions that have 
been submitted to the WTO Secretariat and we look forward to receiving replies in due course. 
5.43.  One of the main concerns the EU raised regarding Malaysia's trade policy was the lack of 
transparency in policy and regulatory formulatio n. Something that was also pointed out by the 
Discussant. In this regard, we do hope that Malaysia's answers to our questions will reflect 
Malaysia's commitment to transparency. 
5.44.  The EU and other Members also raised concerns regarding Malaysia's extensive use of 
licensing that affects both trade in goods and services, as well as investment; and Malaysia's 
restrictive trade policies in the automobile sector. The EU would like to invite Malaysia to address 
these and other concerns raised. And again, we take note of the statement made earlier today. WT/TPR/M/292 • Malaysia 
 
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  5.45.  Concluding, the EU welcomes this review as a useful exercise for all parties and hopes that 
Malaysia will take advantage of the comments rais ed by several WTO Members. The EU would like 
to thank Malaysia for its constructive participation in this exercise. 
UNITED  STATES 
5.46.  The United States would also like to express its appreciation to the delegation of Malaysia 
for its participation. We have also sent to the Secretariat in writing some follow-up questions. One question has to do with the benefit that products produced in free industrial zones enjoy and the 
specific local content criteria for them. We also asked some questions related to geographic 
indications, to the national automotive policy, specifically asking some more detail on the role of the Government and to the extent that any government support measures meet the definition of a specific subsidy as defined by the WTO Subsidies Agreement. The United States respectfully 
requests that Malaysia appropriately notify  any such subsidies as soon as required. 
5.47.  The United States also note that several of our advanced written questions were not 
answered and we do undertake this opportunity to call Malaysia's attention to this. These 
questions are also included in our follow-up questions. The first set of questions has to do with the 
"gazette pricing", why is it used for motor vehicles and why importers must use that process rather than simply declaring the transaction value at the time of importation. We also had 
questions on export subsidy and how Malaysia views it in light of its obligations under the SCM 
Agreement. Finally, some questions that were  not answered pertained to how imported 
automobiles are valued for the purpose of determining excise taxes, how domestically produced automobiles are valued for the purpose of determining excise taxes and a question about the 
offsets for excise taxes for imported automobiles. 
5.48.  We would like to receive full answers to thes e questions in due course and we would like to 
thank Malaysia for its participation. 
JAPAN 
5.49.  Japan highly appreciates Malaysia for providing us with comprehensive and detailed 
explanations considering its hard work after the meeting the first day. I also extend my 
appreciation for Malaysia's efforts to answ er all of our advanced written questions. 
5.50.  Japan would like to submit some follow-up questions in written format regarding the 
answers to our questions. We are interested in ex port prohibition of wood and wood product; data 
protections and approval of pharmaceuticals; and details on the domestic processes relating to the 
proposed accession to the Madrid Protocol. We are looking forward to receiving the answers to the 
questions in due course. 
5.51.  Finally, I wish the Malaysian delegation a safe trip back to Kuala Lumpur. 
MALAYSIA 
5.52.  On behalf of my delegation, I thank you all for the follow-up questions given to us, we note 
the concerns that you have flagged in your questions. We are going to answer your queries and we 
will try to provide those responses in due course. WT/TPR/M/292 • Malaysia 
 
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  6  CONCLUDING REMARKS BY THE CHAIRPERSON 
6.1.  This sixth Trade Policy Review of Malaysia has provided an excellent opportunity to improve 
our understanding of its trade and investment policies. I would like to thank Honourable Dr. Rebecca Fatima Sta Maria, Secretary General of the Ministry of International Trade and 
Industry, H.E. Ms Mariam Md Salleh, Permanent Re presentative of Malaysia to the WTO, and the 
rest of the Malaysian delegation, for their active and constructive engagement throughout this exercise. I would also like to thank H.E. Mr. Hara ld Neple, Ambassador of Norway to the WTO, for 
his insightful interventions as discussant. Malaysia's written answers to the over 500 written 
questions have been appreciated by Members and we  look forward to its replies to the additional 
questions submitted today, no later th an one month after this meeting.  
6.2.  Members praised Malaysia's relatively sound economic fundamentals, solid economic 
performance and resilience in weathering the global financial turbulence. Malaysia has successfully 
achieved good growth rates, impressively low levels of unemployment and low inflation rates, despite unfavourable global economic conditions du ring the period of review. Some Members noted 
the rebalancing of the Malaysian economy with domestic demand offsetting weak external 
demand. Several Members welcomed Malaysia’s fiscal consolidation and tax reform plans. Members also recognized efforts to improve th e business environment and remove or reduce 
equity and other restrictions to foreign direct investment. Many Members congratulated Malaysia 
on the improvements in its international rankings, inter alia, in terms of global competitiveness and ease of doing business, as well as the country ’s successful integration in global value-chains 
and attraction of FDI.  
6.3.  Members acknowledged Malaysia's continued pursuit of trade liberalization in a multilateral as 
well as regional and bilateral context, noting that seven new agreements had entered in force over the review period and that Malaysia is also participating in major ongoing RTA negotiations. 
Malaysia's contribution to and constructive involvement in several areas of the work and 
negotiations of the WTO was also praised.  
6.4.  Against this general positive economic outlook and overall favourable assessment of 
Malaysia's trade policies, the review has also highlighted some areas of possible improvements. 
The main areas – although admittedly non-exhaustive – brought up by Members include the following points and we have also taken due note of the informative statements of Malaysia in this regard:  
1. Macroeconomic challenges:  Certain Members expressed concern over Malaysia's 
financial dependence on oil revenues, and st ressed the need to move forward both in 
the area of tax reform and in the area of subsidy rationalization.  
2. Transparency of the regulatory  and institutional framework:  While Members 
noted Malaysia's efforts to make the regulatory process more efficient and effective, several Members called on Malaysia to improve transparency and predictability in 
administrative procedures and to ensure timely WTO notification of its trade and 
related measures. Some Members encouraged further steps in the area of governance, including strengthening anti-corruption enforcement.  
3. Tariffs:  Even if Members welcomed the unilateral tariff reductions undertaken by 
Malaysia since its previous trade policy review, a number of issues of remaining 
concern were also highlighted, including the complexity of its tariff structure, tariff escalation, the persistence of non ad-valorem tariffs and tariff-rate quotas, especially 
in agriculture, the prevalence of export taxes, the relative large number of unbound 
tariff lines and the growing gap between bound and applied rates. A number of 
Members welcomed Malaysia’s participation in the modernization of the ITA, whilst 
also calling on Malaysia to increase its level of ambition. 
4. Non-tariff barriers and regulatory measures:  Whereas Members expressed 
appreciation for Malaysia's efforts in trade facilitation and we particularly noted that Malaysia announced today that it will commit almost 100% of the TF provisions under 
Category A and none under Category C as well as anti-dumping, intellectual property 
rights, and competition policy, many Members also expressed concern over the WT/TPR/M/292 • Malaysia 
 
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  continued extensive use of non-automatic import licenses and posed questions in 
relation to, inter alia, customs valuation, export and import restrictions/prohibitions, export subsidies, excise duties, taxes and incentives, local content conditions and halal certification, to name a few areas. Members encouraged Malaysia to proceed 
with further liberalization and/or improvements in these areas. Some Members also 
highlighted the need to further strengthen en forcement of intellectual property rights 
and encouraged Malaysia to become a party to the WTO Agreement on Government 
Procurement, as well as to improve market access and transparency in this area. 
5. Subsidies and state involvement:  Members underlined, with concern, that 
Malaysia’s economy continues to be one of the most heavily subsidized in the region and world-wide and that the state involvement in the economy, including through 
government-linked companies, remains high. It was stressed that this may not only 
jeopardize Malaysia’s medium to long-term fiscal consolidation, but can also hamper imports, undermine conditions for competition in the country and lead to inefficient 
allocation of resources and overcapacities, including in the area of fisheries. While 
acknowledging that subsidies' reforms can be politically sensitive, and in no way questioning the right to provide social serv ices, Members encouraged Malaysia to step 
up its plans for rationalization of its production, fuel, and other trade distortive 
subsidies.  
6. Sectoral issues:  On services, Members commended  Malaysia's autonomous trade 
liberalization efforts and encouraged further opening, highlighting that a number of 
important services sectors remain partially or wholly closed to foreign investors. With 
respect to goods, notwithstanding Malaysia's low average duties, concerns were expressed over the persisting protection and support to the automotive sector and to 
some agricultural products, as well as high duties in mining, and on this occasion 
Malaysia was requested to explain its recently adopted National Automotive Policy.  
6.5.  In conclusion, Members commended Malaysia for the important achievements made and its 
rigorous plans to propel its economy to the next level, in line with the aim of becoming a high 
income country by 2020. Members also praised Malaysia for actively making use of increased trade openness – through unilateral reforms, regional and bilateral negotiations, and multilateral rulemaking – to achieve its development objectives. At the same time, it was noted that Malaysia, 
despite being a generally open economy and benefitting greatly from its participation in global 
trade, still maintained a number of measures with trade-distortive effects. Members recommended that Malaysia continues to undertake further trade policy and structural reforms to improve its 
overall efficiency, productivity, and competitiveness, and to maintain an open WTO-consistent 
trade and investment regime to secure sustainable growth and realize its full potential.  
6.6.  The numerous questions posed and the participatio n of a large number of delegations in this 
meeting reflects Members' substantive interest in Malaysia's trade and investment policies and 
practices. In closing, I would like to thank the Malaysian delegation, the discussant, WTO Members participating in this exercise and the Secretariat for this successful review. And last but not least, let me thank the interpreters. 
 
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