WORLD TRADE  
ORGANIZATION  WT/TPR/M/225 
26 February 2010 
 (10-1087) 
Trade Policy Review Body 
25 and 27 January 2010  
 
 
 
TRADE POLICY REVIEW 
 
MALAYSIA 
 
Record of the Meeting  
 
Chairperson:  H.E. Mr. Istvan Major (Hungary) 
 
  Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE RE PRESENTATIVE OF MALAYSIA 4 
III. STATEMENT BY THE DISCUSSANT 8 
IV. STATEMENTS BY MEMBERS 11 V. REPLIES BY THE REPRESENTATI VE OF MALAYSIA AND ADDITIONAL 
 COMMENTS  34 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 43 
 
Note:   Advance written questions by WTO Memb ers and the replies provided by Malaysia are 
reproduced in document WT/TPR/M/225/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/225 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The fifth Trade Policy Review of Malays ia was held on 25 and 27 January 2010.  
The Chairperson H.E. Mr. Istvan Major (Hungary) we lcomed the delegation of Malaysia, headed by 
Mr. Abdul Rahman Mamat, Secretary General, Minist ry of International Trade and Industry, and the 
discussant, H.E. Mr. Sun Zhenyu (China).  
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Ma laysia was contained in document WT/TPR/G/225 
and that of the WTO Secretariat in WT/TPR/S/225. 
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:  India;  Brazil;  New Zealand;  
China;  Turkey;  Australia;  Chile;  Chinese Taipei;  the United States;  Japan;  Hong Kong, China;  
Pakistan;  Norway;  Ecuador;  Canada;  and Argentina. 
4. The following delegations had submitted written questions after the two-week deadline:  the 
European Union;  Peru;  Egypt;  Korea;  Costa Rica;  Colombia; and Indonesia. 
5. The Chairperson said that he had considered the reports prepared for the Review and he noted 
that after an economic growth of around 5-6% be tween 2005 and 2007, growth slowed down to 4.6% 
in 2008, and the Malaysian economy contracted in 2009, as a result of the global financial crisis and 
associated sharp fall in exports.  With a view to addressing these negative external shocks, the 
Government had taken steps to prom ote domestic demand by, for example, the use of fiscal measures.  
At the same time, it had taken steps to open furthe r the Malaysian market to trade and investment, and 
indeed liberalized 27 services subsectors in 2009.  Bo th reports had also made clear that Malaysia 
intended to reduce reliance on expor ts of manufactured goods that were dependent on semi-skilled 
and low-cost labour.  Instead, it aimed to develop services and high-tech manufacturing.  According to the report by Malaysia, these were objectives of a "new economic model".  He noted that Members would be interested in learning more about this model and how Malaysia in tended to achieve these 
objectives.  Various sectoral developments had al so taken place since Malaysia's previous Trade 
Policy Review and were continuing;  one of not able example was a recent announcement that FDI 
restrictions for automobile manufacturing were to be  relaxed.  Members might also be interested in 
learning more about this recent development and ot her specific measures that Malaysia intended to 
introduce to make its market mo re open and thus competitive. 
 WT/TPR/M/225 
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  II. OPENING STATEMENT BY THE REPR ESENTATIVE OF MALAYSIA  
WTO and Malaysia 
6. As a Member of the WTO, Malaysia places great emphasis on the TPR process as it provides 
an opportunity for us to demonstrate our efforts in  meeting the obligations of the WTO, as well as 
sharing with other members the policy measur es and strategies undertaken by Malaysia.   
7. As a trading nation, with a small domestic mark et, we are dependant on the global market for 
our exports. The International Trade Statistics 2009 ranked Malaysia as the 21
st largest exporting and 
28th largest importing nation in the world in 2008. Ma laysia places great emphasis in ensuring that the 
multilateral trading system continues to contribute  towards growth and development. Hence, our 
focus continues to remain on efforts to open up markets and strengthen rules which provides for 
transparency, certainty and pred ictability in global trade.  
8. In this regard, Malaysia has been an active participant in the Doha Round negotiations.  We 
believe the early conclusion of the Doha Round  can provide the necessary impetus for global 
economic growth, and contribute positively to the r ecovery process. We also believe leadership is 
required from the key players from both the developed as well as developing members, if we are to 
see the conclusion of the Round this year. Failure to  conclude could result in members resorting to 
protectionist measures and bringing into question the credibility of the WTO.  
Overall Economic Environment 
9. The Trade Policy Review of Malaysia comes at  a time that is challenging not only for 
Malaysia but also to the rest of the world. Th e world economic and trade growth forecasts are being 
monitored and adjusted from time to time, and we  will revise our growth estimates accordingly.  
10. In October 2009, the IMF projected the world economy to contract at 1.1% in 2009 compared 
to earlier projection of 1.4% in July. In 2010, the global economy is expected to grow at 3.1%.  
11. Taking into account the performance of the glob al economy and international trade, as well as 
the improved domestic economic envi ronment, Malaysia’s GDP in 2009 is projected at minus 3.0%, 
better than the earlier projection of minus 4.0% to minus 5.0%.   
12. With signs of improvement in the global ec onomy and coupled with the concerted efforts 
taken by the Government to stimulate private inv estment, the economy is exp ected to achieve a higher 
growth of 5% in 2010, with exports projected to  rebound at 3.5%, while the unemployment rate is 
projected to remain low at below 4.0%. 
13. In response to the global financial and econom ic crisis, Malaysia also undertook immediate 
measures by implementing two stimulus packag es totalling RM67billion (USD18.2 billion) to boost 
domestic demand, improve access to  financing and enhance human cap ital development. In addition, 
the crisis provided the opportunity to restructure the economy to be more broad-based and to ensure 
that it is better placed to optimise opport unities once the global economy recovers.  
14. Despite the global challenges Malaysia did not resort to the use of protectionist measures to 
address the impact of the global economic crisis, but actually took some drastic liberalisation 
measures.  WT/TPR/M/225 
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  Services Liberalisation 
15. As part of the restructuring efforts on 22 April 2009, the Government announced 
liberalisation measures in 27 services sub-sectors which include health and social services, tourism, transport, business, as well as computer and related services.  
16. This was followed by the liberalisation of the financial services sector on 27 April 2009. 
Following Malaysia’s Budget 2010 announcement made on 23 October 2009, the foreign ownership 
limits in corporate finance and financial planni ng companies have also been fully liberalised. 
(Previously, the foreign ownership limit in these companies was limited to 70%.) 
17. We note from the questions submitted, Member s have shown a strong interest in the 
liberalisation of the services sector. The liberalisati on of the services sectors aims to strengthen the 
competitiveness of domestic players, increase i nvestment opportunities, create high income and 
knowledge jobs and foster greater innovation.  The se rvices sector share is targeted to reach 60% of 
the GDP by 2020 from its current share of 55%. 
18. The government will also consider liberalising progressively other services sub-sectors taking 
into account the overall development of these sub- sectors. In this regard, roadmaps are being 
developed for the liberalisation an d further development of all servi ces sectors. In addition, there are 
already time-bound plans to open up the services sectors which have been committed under the 
ASEAN Framework Agreement on Services or AFAS.   
FIC Liberalisation 
19. On 30 June 2009, the government also announced  the deregulation of investment guidelines 
administered by the Foreign Investment Committee (FIC). This aims to strengthen Malaysia’s 
attractiveness as a place to do business and invest. 
Domestic Trade Sector Liberalisation 
20. In the domestic trade sector, encompassing w holesale and retail trade, the government has 
also agreed to liberalise the sector, except for th e foreign hypermarket segment, where a domestic 
equity requirement of 30% will still apply.  Ther e will be no equity requirement in areas such as 
franchising, hyper stores, and direct selling.  
Trade Policies and Measures 
Tariff 
21. With regard to trade policies and measures, Ma laysia will continue to liberalise the trade 
policy regime progressively, in order to encourage integration at the regional and global level.  
22. In the area of tariffs, besid es reductions under preferential trad ing arrangements, Malaysia has 
been undertaking autonomous liberalisation over the last decades. As of 2008, 99.3% of total applied 
tariff lines are at ad valorem  basis, with average applied tariff rates of 7.3%. The industrial average 
applied tariff is 8% and the agricultu re average applied tariff is 2.7%. 
Import Licensing 
23. Malaysia is also currently reviewing the overall import licensing regime and it will be 
gradually liberalised based on the readiness of the sector, as well as taking into account the overall 
development objectives of the nation. WT/TPR/M/225 
Page 6  
 
  Competition Bill 
24. We are also currently in the midst of finalising the Competition Bill, which is targeted for 
completion by this year. The Bill is expected to be implemented after a two year advocacy period. 
Standards 
25. As to-date, 58.1% of Malaysian standards ar e aligned with international standards. In 
developing new standards or revising existing stan dards, Malaysia will continue to give emphasis on 
adopting existing regional or international standards. 
Improving the Business and Investment Environment 
26. Facilitating trade and business remains a key priori ty of the Government. In terms of world 
competitiveness rankings, Malaysia’s ranking for government efficiency improved from 21
st in 2007 
to 19th in 2009, out of 55 economies.  
27. Initiatives to spearhead improvement in governme nt delivery include the establishment of a 
Special Taskforce to Facilitate Business ( PEMUDAH) on 7 February 2007, comprising key 
representatives from the public and private sector. Among improvements by PEMUDAH include reducing time taken to register pr operty from 144 days to 41 days via online valuation and to 61 days 
manually, as well as the introduction of Business Licensing Electronic Support System (BLESS) as an 
online one-stop centre for application of license s, approvals and permits for manufacturing, 
construction and hotel. 
28. The government has also established the Performance Delivery & Management Unit 
(PEMANDU) on 16 September 2009 to oversee implementation and assess progress of the government transformation programme as well as support delivery of National Key Result Areas or 
NKRAs. The NKRAs aim to measure the performance of  the government in key areas of interest to 
the public.  Six NKRAs have been identified to e nhance Government delivery, namely:  widening 
access to affordable and quality education;  improvi ng urban public transport in the medium-term;  
combating corruption;  reducing crime rate;  impr oving standards of living of low income households; 
and improving infrastructure in rural areas. 
Way Forward 
29. As Malaysia becomes increasingly integrated  into the global economy, and given our 
interdependence on global trade, we will continue to be exposed to the vulnerabilities and volatility of 
external developments and its systemic impli cations on economic growth and stability. We will 
continue to monitor these developm ents and respond appropriately to ensure the sustainability of our 
economic resilience. 
30. Malaysia is currently formulating the Tenth Malaysia Plan for the period 2011-2015. The 
Plan will provide the strategic direction toward s achieving a high income economy and developed 
nation status by 2020. The private sector is expect ed to assume a more important role in enhancing 
investments as well as exports in all sectors.  
31. In this context, the Government is exp ected to announce the New Economic Model next 
month, which will focus on enhancing innovation,  services sector as well as moving the economy up 
the value chain towards a high-income economy. 
32. Key thrusts to ensure Malaysia remains on track  towards the vision of a developed nation in 
2020 include:  enhancing the competitiveness of the ec onomy;  diversifying exports markets to reduce  WT/TPR/M/225 
 Page 7 
 
 
  over-dependence on traditional markets; stimulati ng new sources of growth, including promoting the 
development of the services sector;  intensifyi ng research, development and commercialisation of 
domestic products; human resource development;  and promoting sustainable development. 
Conclusion 
33. We wish to thank Members for the interest s hown in Malaysia’s TPR. We have received more 
than 310 questions from 21 member countries. This  represents a higher number compared to the 
previous review, reflecting Members’ interest in Malaysia’s trade and econom ic policies. We have 
provided responses to almost all questions.  For the remaining questions which came in late we will 
provide responses within the stipulated deadline. WT/TPR/M/225 
Page 8  
 
  III. STATEMENT BY THE DISCUSSANT (H.E. Mr. Sun Zhenyu (China)) 
34. According to the Secretariat Report, there are some very impressive features of the economic 
achievements made by Malaysia over the past  years which I would like to highlight. 
35. First, it has achieved very hi gh economic growth over the last decade, with an annual average 
growth of 6-7% and with per capita GDP reaching US$8,000, which is among the highest in 
Southeast Asia. 
36. Second, facing with the financial and economic cr isis, Malaysia tried hard to reduce reliance 
on exports of manufactured goods and to increase ser vices’ share in the GDP, aiming to achieve 60% 
of the GDP by 2020. 
37. Third, in spite of the challenge of the world financial crisis, Malaysia  continued to promote 
further competition through autonomous  and unilateral trade liberalizati on and to relax restrictions on 
foreign investment. The simple average applied tari ff rate is now 7.4% and the highest peak is no 
more than 45.2%, which is a remarkable achievement  in the opening of the market. Since April 2009, 
100% foreign equity has been allowed in 27 services s ubsectors and foreign investment restrictions in 
some financing services have been relaxed. These ar e very encouraging and constructive development 
and a major contribution to the economic recovery of the world. 
38. In the 1980s, Malaysia, alongside some othe r Southeast Asian countries, promoted its 
industrialization by taking advantage of the “Flying Geese” model and achieved great economic 
success and became part of the “A sia Miracle”. Although this miracle was somehow interrupted by 
the Asian Financial Crisis in 1997,  Malaysia managed to recover fast from that crisis. Now we are 
undertaking a review on Malaysia against the backdrop of another but an even more severe crisis. I 
believe Malaysia can serve as a test case of whet her and how globalization and open trade can help 
meet the challenges of economic turbulences. 
39. I fully understand that as a discussant, my job is to ask some questions, to provoke 
discussions, to have better understandings of the polic ies, and to have some impact, if possible, on 
future policy making. Along these lines, I will focus my intervention on three main aspects, namely 
macroeconomic environment, trade policy regime and sectoral policies. 
Macroeconomic environment 
40. Between 2005 and 2008, Malaysia 's economy continued to grow steadily, but since the fourth 
quarter of 2008, the speed of growth slowed down, reflecting the impact of the global financial crisis. 
Although economic performance started to improve in the second half of last year, the GDP was predicted to have contracted by 3.0%. Expected growth of this year was 3%. But according to the 
latest press release, the real  outlook seems much brighter. The World Bank said Malaysia had 
recovered well from the global financ ial crisis and would grow 4.1%  in 2010 after a contraction of 
2.3% in 2009. 
41. During the period under review, Malaysia's development of export-oriented production 
remains highly successful, and trade plays an important role in the economy. 
42. As the Secretariat Report has noted, healthy fo reign exchange reserves, a relatively small 
external debt as well as the ongoing restructuring of the financial and corporate sectors are positive factors that have enabled Malaysia to withsta nd the global financial cris is. Monetary and fiscal 
policies have become more accommodative. The Govern ment has employed fiscal stimulus packages, 
amounting to 67 billion ringgit since November 2008, to mitigate the negative effects of the global 
financial crisis. It would be helpful if Malaysia c ould share with us how it has evaluated the role and  WT/TPR/M/225 
 Page 9 
 
 
  effect of these stimulus packages. What further measures does it plan to adopt to prevent a possible 
double dip? 
43. Furthermore, in 2009, the Government relaxed r estrictions on foreign investment, particularly 
in services. This relaxation reflects an intensificati on of the Government's efforts to promote services, 
in addition to high-tech manufacturing. Malaysia  also intends to reduce reliance on exports of 
manufactured goods that are dependent on semi-skilled and low-cost labour. 
44. Nonetheless, the economy remains vulnerable to downturns in the United States, Europe, and 
Japan, its top export destinations and key sources of  foreign investment. Significant challenges for 
Malaysia include the speed at which new domes tic sources of growth are found. It would be 
interesting to hear from Malaysia on how it inte nds to overcome these challenges. Moreover, how will 
the Government ensure a stable growth of domestic demand? 
Trade policy regime 
45. Malaysia is a big trading nation. Exports remain essential for Malaysia, and as an open 
economy, its international trade pe rformance depends to a considerab le extent on world growth and 
expansion in global trade. 
46. During the review period, Malaysia's overa ll economic policy objectives shifted towards 
developing services. Its constitutio nal and legal framework has rema ined largely unchanged. For the 
purpose of enhancing transparency and disseminati ng regulatory information, the Government is 
considering an official one-stop website for laws and regulations. This is most welcome to Members 
and it would be useful if Malaysia could share the progress of this process. 
47. Malaysia is strongly committed to the multilatera l trading system. At the same time, it has 
intensified efforts in regional and bilateral tradi ng arrangements to complement its pursuit of better 
trade environment through the WTO. It would be in teresting to know how Malaysia has ensured that 
the RTAs it is engaging in will create trade in a wa y complimentary to the multilateral trading system. 
48. A new development in Malaysia’s tariff regime  is that since 1 April 2008, Malaysia has 
applied tariff-rate quotas (TRQs) on 18 agriculture pr oducts to meet the requests of domestic small 
producers. Could Malaysia please explain the reason for this change? 
49. As the Secretariat Report has noted, a quarter of Malaysia's tariff lines are subject to import 
licensing, most of which is non-automatic. Could Ma laysia elaborate the specific plans to reduce the 
products under import licensing and whether there ar e any measures to make sure that its import 
licensing procedures are applied in a neutral manner? 
50. Tax incentives have long been an important inst rument of Malaysia's industrial policy. 
According to the Secretariat Report, the publication of estimates of tax revenues forgone would 
improve fiscal transparency and contribute to a more  effective tax policy. It would be interesting to 
hear Malaysia’s opinion. The Secretariat Report also  notes that Malaysia is planning to introduce a 
broad-based VAT-type tax. Could Malaysia shar e with Members the progress in this respect? 
51. Standards and standardization activities are among Malaysia's priorities. And it aims to align 
Malaysian standards with internati onal standards. What steps does Malaysia intend to take to fulfil 
this objective? 
52. Currently, Malaysia has 34 government-linked companies (GLCs) and the Government aims 
to improve productivity of them. So how does the Government of Malaysia plan to improve the 
productivity of GLCs? Does the Government  intend to further privatize GLCs? WT/TPR/M/225 
Page 10  
 
  53. Malaysia does not have a comprehensive comp etition law, however it is in the process of 
drafting one. It would be appreciated if Malaysia could share the progress of this process? What are the issues currently discussed regarding the introduction of  competition legislation? 
Sectoral policies 
Services 
54. Malaysia aims to increase the share of the services sector in GDP to 60% by 2020, in an effort 
to establish a knowledge-based economy less reliant on manufactured exports. 
55. On 22 April 2009, the Government announced the el imination of foreign equity restrictions 
on 27 services subsectors: in the areas of health a nd social services, tourism, transport, business 
services, and computer and related services. A week la ter, restrictions were also relaxed on foreign 
investment in some financial services. These liberal ization initiatives have been complemented with a 
support programme for the domestic services industr y under the First Economic Stimulus Package. 
Could Malaysia share with us what further me asures it envisages to increase competitions in the 
services sector? What are the specific plans to further liberalize the services sector? 
Agriculture 
56. As a Member of the Cairns Group, Malaysia has an overall liberal trade regime on 
agriculture. Import tariffs on agricultural products ar e generally low, averaging at 2.8% in 2009. At 
the same time, a wide range of agricultural produc ts are subject to import licensing and SPS measures. 
Malaysia has also begun to apply TRQs on 18 agricultural tariff lines.  What is the Government’s 
strategy to improve the productivity of its agriculture and maintain food security? 
Manufacture 
57. Manufacturing in Malaysia is re latively open to both trade and foreign investment. Exports of 
manufactured goods increased betwee n 2004 and 2008, but their share in Malaysia's total exports 
declined. The Government continues to promot e exports of manufactured products through, inter alia,  
income tax exemptions. Could Ma laysia consider providing the data for the total amount of 
exemptions?  WT/TPR/M/225 
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  IV. STATEMENTS BY MEMBERS 
INDIA 
 
58. Over the last few decades, the growth of Malaysian economy has been phenomenal. With our 
deep economic engagement with Malaysia, India is  proud to be a part of it. We note that the 
Malaysian economy continued to grow at steady p ace during 2005-08.  We also note with relief that 
the trade contraction of 6.2% in the first quarter of 2008 has decreased sin ce then. This improvement 
could be attributed partly to the government’s r esponse which included relaxing restriction on foreign 
investments and services and higher public spending and positive growth in private consumption.  It is 
noteworthy that between 2005 and 2008, Malaysia's  gross national saving rate remained among the 
highest in the world, averaging about 37% of GDP ;  its gross domestic investment averaged some 
20% of GDP.  Malaysia's foreign currency r eserves were around US$93.3 billion (as in Aug 2009), 
which is equivalent to about 9.3 m onths of Malaysia's imports place it in a very comfortable position.  
These are very solid numbers and with most economists believing that the worst of the economic crisis is now behind us, Ma laysian economy could certainly do even better in 2010. 
59. We look forward with interest to Malaysia’s ‘10
th Malaysia Plan’ which is intended to shift 
the economy to a high-income economy, with a focus on innovation, creativity and productivity. As an important trading partner, we look forward to h ear some details in this regard from the Malaysian 
delegation. 
60. India views Malaysia as an invaluable friend and partner in South Asia and an important 
element of our ‘Look East policy’. Economic and co mmercial ties constitute one  of the bedrocks of 
our age-old ties. However, the spectacular progress of the Malaysian economy since the late eighties, 
the new self-confidence of Malaysian and Indian entr epreneurs, and the liberalization of the Indian 
economy since 1991 have triggered new dimensions in bilateral commercial and economic relations. 
Today, Malaysia is our second largest trading pa rtner in the ASEAN region (after Singapore). 
Between 2005 and 2008, bilateral trade has doubled  from US$5 to 10 billion. Balance of trade 
remains in favour of Malaysia largely due to I ndia’s huge imports palm oil (of which we are the 
largest importer) and petroleum. Owing partly to the global economic crisis, bilateral trade figures 
have however, dipped in 2009.  
61. Our bilateral investment relations are also  prospering well. There are over 100 Indian 
companies registered in Malaysia including 60 join t ventures. 60 Indian IT companies already have a 
presence in Malaysia. IRCON International Limited has been actively engaged in development of 
railways in Malaysia for over twenty years. India h as emerged as the 7th largest investor in Malaysia 
with a total investment of US$1.6 billion including investments by Reliance, Thapar Group, Larsen 
and Toubro and other Indian companies. The cu mulative Malaysian investments in India till 2008 
were to the tune of US$1.8 billion. It is notewor thy that Malaysian construction companies’ largest 
presence outside Malaysia is in India. One of th e noteworthy projects has been the involvement of 
Malaysia Airports Holdings Berhad  in partnership with the GMR Group in the construction of 
Hyderabad and Delhi airports.  
62. The ASEAN-India FTA in goods came into e ffect on 1 January 2010. The FTA aims at 
eliminating tariffs on 80% of the tariff lines accounting for 75% of the trade progressively in 3 to 8 years. We expect this to further consolidate our  rapidly growing economic engagement. We are now 
engaged in negotiating a Compre hensive Economic Cooperation Agre ement to further capitalize of 
our economic synergies and potentialities. Tw o meetings have been held so far. 
63. About 150,000 Indian professionals and workers ar e employed in Malaysia. I must admit that 
we have been somewhat concerned about the probl ems around Indian workers in Malaysia.  However, 
in this context, we note with satisfaction the MoU on Employment of Workers between India and WT/TPR/M/225 
Page 12  
 
  Malaysia signed in January 2009. So far two offici al level meetings have been held to develop 
mechanisms for the welfare of workers and we are hopeful of a positive outcome of these efforts. 
64. The most recent among the frequent high level visits was the State Visit of Prime Minister 
Mohd Najib Tun Abdul Razak to India last week fro m 19 to 23 January 2010.  Our leaders identified 
core sectors of cooperation including HRD particular ly higher education, infrastructure development 
particularly highways, railways, airports and ports, information technol ogy, biotechnology and 
energy. A MoU on Capital Market Collaborative Agreement was signed between the Securities 
Commission of Malaysia and the Securities and Exchange Board of India. Our leaders also gave directions for conclusion of the Malaysia-India CECA negotiations “as soon as possible”.  It has 
been agreed to develop a 'long term and strategic pa rtnership' and in this context a framework would 
be developed during this year. 
65. In conclusion, let me place on record my appreci ation for the active role played by Malaysia 
in the WTO and the Doha Round of negotiations.  
BRAZIL 
 66. Since its previous Trade Policy Review in 2006,  Malaysia’s commerce with Brazil increased 
by some 140%, to about US$2.5 billion in 2008. Tr ade flows declined somewhat in 2009, possibly as 
a consequence of the economic downturn from which th e world is yet to fully recover. Nevertheless, 
we recognize that bilateral trade is still well below its potential. 
67. Malaysia is one of Brazil’s main trading pa rtners in the ASEAN group. Bilateral trade 
comprises a wide range of goods, from agricultural pr oducts and raw materials to integrated circuits, 
microprocessors and defense products. 
68. Brazil acknowledges Malaysia’s efforts toward s greater openness in trade and investment 
since its last TPR. The recent measures of liberalization promoted in 27 services subsectors are particularly noteworthy. We will follow with inte rest Malaysia’s change in orientation in its 
manufacturing and services basis, so as to reduce relia nce on manufactured exports and to develop the 
services sector as its next engine of growth. 
69. Turning to a more specific issue, Brazil notes Ma laysia’s decision to put in place tariff rate 
quotas (TRQs) for several tariff lin es corresponding to agricultural products. We are interested in 
knowing whether these are meant to be temporar y measures and, if so, when the Malaysian 
Government intends to remove such TRQs. 
70. The Brazilian government follows with great inte rest the development of current and potential 
partnerships between Brazilian and Ma laysian companies, in sectors as diverse as palm oil and rubber, 
biofuels, iron mineral, oil prospec ting and urban transportation. Ther e is also potential for increasing 
trade in the defense sector. 
71. It is our understanding that Malaysia is seek ing to expand and diversify trade with existing 
partners and to explore new markets. In this c ontext, Brazil wishes to express its appreciation for 
Malaysia’s constructive role in the negotiation of the modalities of the São Paulo Round of the Global 
System of Trade Preferences (GSTP). We count on Malaysia’s support in the final phase of the negotiations throughout 2010.  
72. We note the observation in the Secretariat’s report that, according to the Malaysian 
authorities, "no Malaysian exporter has used the GSTP  facility". Brazil believes that the GSTP can be 
instrumental in further enhancing and expanding Sout h-South trade and in diversifying trade relations  WT/TPR/M/225 
 Page 13 
 
 
  among its participants. In this re gard, we encourage Malaysia to explore the opportunities already 
provided by the System and to take full bene fit of the preferences exchanged within it. 
73. As to the Doha Round, Malaysia has been playing a very positive role in supporting the 
negotiating process and has cont ributed significantly to it. 
NEW ZEALAND 
 
74. Like New Zealand, Malaysia is a strong tr ading nation with an export-driven economy. 
Indeed, Malaysia has been one of the key beneficiaries of the economic prosperity brought about by increased global trade. This means that Malaysia has a vital stake in the continued integrity and 
effectiveness of the WTO rules-based multilateral trading system. It is therefore pleasing that 
Malaysia continues to focus on multilateral trad e liberalization and facilitation initiatives under the 
WTO.  
75. However, as we all know regretfully progress on multilateral initiatives has been limited in 
recent times, and New Zealand welcomes Malaysia’s  determination to maintain the momentum of 
growth and liberalisation th rough unilateral, bilateral and regional trade initiatives. 
76. There have been some very significant devel opments in this area between Malaysia and New 
Zealand in the past twelve months. New Zealand is very pleased to have concluded and signed a 
bilateral free trade agreement with Malaysia in  2009. The bilateral FTA followed the successful 
conclusion of the Agreement establishing the A SEAN-Australia-New Zealand Free Trade Area, 
which entered into force for both countries on 1 January this year.  
77. Both Agreements are comprehensive, high-qua lity, WTO consistent agreements covering 
areas typically found in modern free trade agr eements including goods, services, investment, 
intellectual property, mobility of business people,  and competition policy. The agreements will 
provide a framework for closer economic coope ration and partnership between the business 
communities of our two countries. The direct commercial benefits of both FTAs are practical and tangible, and underline both Malaysia and New Zeala nd’s commitment to trade liberalisation. And all 
this in a year defined by global recession. 
78. New Zealand welcomes and commends the Government of Malaysia on the significant 
unilateral liberalisation measures and economi c reforms that it announced in 2009, including 
liberalising the foreign direct investment rules for 27 services sub-sectors, some financial services, 
and the Foreign Investment Committee.   
79. There are, however, sectors of Malaysia’s economy which in our view would benefit from 
further reform. As the Secretariat has pointed out in  its report, a more liberal trade and investment 
regime, as has been adopted for some services sub- sectors, would contribute greatly to Malaysia’s 
economic growth.  Reforms to government proc urement policy, including encouraging more 
international participation in tende rs, would also deliver substantial economic benefits to Malaysia.  
New Zealand also believes that extending the alr eady announced services liberalisation measures to 
other services sub-sectors would help Malaysia atta in its goal of increasing the services sector’s share 
of GDP to 60%. New Zealand is hopeful that such  measures will be implemented as part of 
Malaysia’s efforts to create a ‘New Economic Model’  and as the Tenth Malaysian Plan is formulated.  
80. New Zealand looks forward to working further w ith Malaysia – bilaterally, in regional fora 
and in the WTO - to help it achieve its objectiv e of becoming a  higher value-added an knowledge-
based economy. Indeed, New Zealand  itself shares these objectives.  WT/TPR/M/225 
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  CHINA 
81. China notes with pleasure that Malaysia conti nues to rely on the WTO as a priority in 
realizing its trade objectives.  China appreciates Malaysia’s efforts in liberalizing its trade and 
strengthening its trade-related policies even in the background of a global crisis.  China is also pleased 
to learn that Malaysia will make continuous effo rts to focus on trade liberalization and facilitation 
initiative under the WTO.  We share Malaysia’s view that the Uruguay Round Agreements and the 
full implementation of commitments is important for the multilateral system.  We look forward to the 
positive role that Malaysia will continue to play in the multilateral trading system, especially against 
the still gloomy background of the crisis and in th e face of the difficulties in the Doha negotiations. 
82. Malaysia and China are important trading partners  to each other, with Malaysia being China’s 
8
th largest trading partner globally and the largest  among ASEAN members.  The period under review 
has witnessed a rapid and sound development of our b ilateral trade and economic ties.  Our statistics 
indicate a bilateral trade volume of over US$53 b illion in 2008, achieving the trade objective set by 
our leaders two years ahead of schedule.  Although our bilateral trade experienced minor decline in 
2009, the common belief in a bright prospect of our bilateral economic ties stays firm. 
83. What strengthens our mutually beneficial rela tions within the framework of the multilateral 
trading system is the China-ASEAN FTA which is fu lly established this year, covering trade in goods, 
trade in services and investment.  It enhances the close economic and trade relations between China and ASEAN members, including Malaysia, and also contributes to the economic development of Asia 
and the world at large.  It serves as a supplemen t to our trade liberalization efforts within the 
multilateral trading system. 
TURKEY 
84. I am very impressed to read the development Malaysia has achieved since then, becoming the 
13
th larger exporter of the world with one of the high est per capita income in Southeast Asia.  It is a 
leading member of the ASEAN and an active play er in the multilateral arena including the WTO and 
the DDA with a well diversified and developed economic structure. 
85. The progress is so remarkable that Malaysia no w aims to become a fully developed nation by 
2020, and to establish a knowledge based economy, moving fast from being energy exporter. 
86. It is clear at the Secretariat’s report that Malaysia has been undergoing through continuous 
reforms and liberalization.  That its rank was ch anged upwards from 25 to 20 just in a year in the 
World Bank’s Doing Business Index is the proof of  Malaysian’s recent success in completing another 
set of economic reforms.  From trade policy persp ective, worth mentioning is the establishment of a 
customs appeal mechanism and introduction of a dr aft competition law since the last review in 2007. 
87. It is clear that the “Malaysian Style” of comb ining active state involvement together with a 
vibrant private sector served the country well and, it will continue to rely on this approach to achieve 
2020 target.  We do not doubt that the government involvement in the process of supporting services 
in the economy will also be in line with the WTO disciplines as has been  the case for manufactured 
goods.  While it seems that the government is aimi ng to rely on domestic market as a source of 
growth in the near future, attracting foreign inv estment in services will also require some further 
opening of services as well. 
88. While Malaysia has been in the process of c ontinuous liberalization and services being the 
latest target to undergo certain reforms, it is also surprising to learn that almost one fourth of tariff 
lines are still unbound even though the duties have not risen by the government for a long time.  We  WT/TPR/M/225 
 Page 15 
 
 
  are pleased to see commitment by the government that  this picture will change at the end of the DDA 
which Malaysia is an important contributor. 
89. Further, we also hope that over time the governme nt will also review its policy of substantial 
use of the non automatic licensing as part of trade policy tools.  While we understand the importance 
of automotive industry for Malaysia, we also believe  that it is also time to open up this sector to 
foreign competition as an alternative way to im prove the performance of the sector.  Increased 
competition may contribute to the ongoing effo rts to improve the productivity and financial 
performance of the government linked companies. 
90. Another interesting area deserving careful attenti on is the export regulati ons.  Malaysia export 
tax revenue is higher than its total import tax re venues even though export duties applied to only 
515 tariff lines out of 10,000.  This clearly points out to a liberal trade regime.  But, at the same time, 
it is also an issue for concern as well, particularly  for Turkey as a major importer of raw materials as 
such duties directly affect our cost, and conseque ntly our competitiveness.  We certainly hope that 
such restraints will be phased out through time. 
91. Turkey and Malaysia have been partners in D-8 which aims to improve trading environment 
with an eventual aim of elimin ating barriers to trade among its members.  Currently, our bilateral 
relations are modest, but improving steadily. 
92. Compared with 2005, our trade volume doubled, reaching to US$1.6 billion in 2008.  As a 
result of economic crisis, we will record about 40% decrease in 200 8.  In spite of growing trade 
figures, the trade balance has long developed in favour  of Malaysia.  In 2008, our export is very 
limited at US$116 million.  Oilseeds and electronics constitute about half of our imports. 
PAKISTAN 
93. Malaysia and Pakistan enjoy very special rela tions in all spheres and the ties of economic 
relations are manifested by the conclusion an d enforcement of Pak-Malaysia comprehensive 
economic partnership Agreement. This agreemen t covers goods, services, investment and economic 
cooperation.  Both countries have started realizing the fruits of this trade agreement and we hope to 
keep on strengthening already dynamic economic relations.   
94. Malaysia has shown a steady economic growth during the peri od under review especially in 
trade in services maintaining trade surplus since 1997. Ma laysia has all the right signals to be taken as 
a notable economy due to its role in WTO, ASEAN and APEC, strong fundamentals such as 
manufacturing base, services hub, excellent labor  force and expanding trade and economic 
partnerships among others. Moreove r, Malaysia’s focus on high value added industries and taking 
services as engine of growth appears to be right strategy in the era of global economic turmoil. During 
the TPR, we will learn more about this strategy.   
95. Malaysia’s role in WTO has also been commenda ble and credit goes to its role in taking the 
DDA and other issues forward with a constructive approach. 
96. Due to a very proactive, dynamic and open economic management, there are many 
achievements of Malaysia that one can note but I w ould like to mention role of Malaysia in Islamic 
Finance. On one hand Malaysia’s  domestic banking and insurance market is witnessing phenomenal 
growth and on the other hand the establishment of Malaysia International Islamic Finance Centre 
(MIFC) has taken the leading role as hub for Islami c finance all over the world. Pakistan has gained 
substantial market access through bilateral FTA wi th Malaysia in Islamic banking and insurance. 
Pakistan wishes to further strengthen its ties wi th Malaysia and gain from valuable economic 
management and transition strategies.  WT/TPR/M/225 
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  SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
97. We have been enjoying a close relationship with  Malaysia for quite some time now.  In fact, 
we have been holding regular bilateral meeti ngs together since 1997.  Malaysia is our 9
th largest 
trading partner overall, and our 2nd largest among the ASEAN countries;  for Malaysia, we are its 7th 
largest trading partner.  All this added up to a to tal value of bilateral trade between us in 2008 of 
US$12.3 billion.  On top of that, we are Malaysia’s 3rd largest source of foreign investment, ranked 
just behind the United States and Japan.  By the end of 2008, the total amount of our investment in Malaysia had reached US$10.1 billion, the majority coming from our electronics industry and banking services. 
98. From the Secretariat’s Report, we find much evidence of the Malaysian government adopting 
an open attitude to integration with the global ec onomy.  Notwithstanding the global economic crisis 
that broke out in 2008, it has continued to liber alize its trade and trade-related policies, mainly 
unilaterally.  The government continues to encourag e FDI, and has been steadily relaxing foreign 
investment restrictions in services, which is entir ely consistent with its overall policy objective of 
developing services industries.  We believe such openness is one of the reasons for the Malaysian 
economy having been so robust and for it being one of the first to show recovery.  We sincerely hope 
Malaysia will continue with its programme of liberalization, especially in the banking sector. 
99. In our written questions submitted in advance, we already identified certain policy areas in 
which we have a particular interest.  These incl ude: information on measures being taken by the 
Malaysian government to design a competitive electr ical power market; the influence of the Fair 
Trade Practices Bill on the price control regime; the liberalization measures relating to offshore 
financial institutions; and, foreign capital participation in telecom services.  The fact that we have so 
many questions illustrates the strength of our interest in Malaysia’s trade policy. 
100. This Trade Policy Review provides us with  a valuable opportunity to get a better 
understanding of the Malaysia’s trade policies, practices and regulatory measures.   
CHILE 
101. Malaysia and Chile maintain excellent bilatera l relations.  They are also members of APEC, 
Malaysia being one of the countries which strongl y supported Chile's accession to that agreement. 
102. A sign of these good relations was last year's St ate visit to Chile by the King of Malaysia, 
Mizan Zainal Abidin.  The two countries have also  signed a number of bilateral agreements.  Of 
particular note is the Agreement on the Avoidan ce of Double Taxation and the Prevention of Fiscal 
Evasion in Respect of Income Tax, which entered in to force at the end of 2008, and the Memorandum 
of Understanding on Antarctic C ooperation, signed in March 2007. 
103. At the economic level, bilateral trade has grown steadily over recent years and shows 
considerable potential.  In 2008, trade between the two countries amounted to US$330 million.  That 
same year, Chilean exports to Malaysia increas ed by 103.8 per cent in relation to 2007, reaching a 
total of US$148.8 million, while Malaysian exports  to Chile amounted to US$186.7 million, a 10 per 
cent increase on the previous year. 
104. Chile's main exports to Malaysia are copper, pe llets of iron ore and iron ore concentrates, and 
unbleached coniferous chemical wood pulp, which t ogether account for 89.3 per cent of all exports.  
Chile's main imports from Malaysia are crude petroleum and mineral oil, transmitter-receivers 
(various types) and computer components (memory un its).  The trade balance is unfavourable to Chile 
due to its oil imports.  WT/TPR/M/225 
 Page 17 
 
 
  105. The active trade flow and its growth prospects justified the decision made by both countries in 
2007 to begin negotiations with a view to concludi ng a free trade agreement.  To date, a total of 
seven rounds of negotiations have taken place. 
106. This bilateral and regional relati onship is also in evidence at th e WTO.  Malaysia is an active 
participant in the Doha Round negotiations and has played a key and positive role in seeking the 
consensus needed to reach the R ound's eagerly awaited conclusion.  Chile and Malaysia have the 
same high hopes for the outcome of this Round a nd share views in many areas, such as in NAMA, 
where we are both "middle ground" countries, and in agriculture, where we are both members of the 
Cairns Group. 
107. We congratulate Malaysia on its progressive economic reforms and on the opening up of its 
services sector.  We hope that the changes made in respect of services and investments will be 
reflected in the country's offers in the Doha Round negotiations. 
UNITED STATES 
108. Malaysia is an important trading partner of th e United States.  It ranks as one of our top 15 
trading partners, with two-way goo ds trade between us of more th an US$40 billion.  Two-way trade 
in services adds another US$3.3 billion.  The accumulate d stock of U.S. foreign direct investment in 
Malaysia is more than US$13 billion, much of it in the manufacturing sector.  We have a positive 
trade and investment dialogue on all fronts, and we are eager to continue working with Malaysia to 
broaden and deepen our economic relationship in the years ahead. 
109. We recognize that the time period of this re view has been a somewhat turbulent one for 
Malaysia, as it has been for many of us.  After a long run of impressive growth, the global economic 
crisis and other factors – including fluctuating co mmodity prices – hit Malaysia’s export-led economy 
hard.  Malaysia’s economy contr acted in 2009, though we are pleased to learn from the Malaysian 
authorities that with the global economic recovery, Ma laysia’s real economic growth is projected to 
rebound to a healthy 2-3% for 2010. 
110. There have been significant and positive polic y developments in Malaysia, despite the 
difficult macroeconomic environment.  We note with interest that the government of Prime Minister 
Najib is embarking on a new economic model intend ed to shift from a reliance on a manufacturing 
base dependent on semi-skilled and low-cost labor  to an economy centered on innovative services- 
and knowledge-based industries.  This represents an  important transition for Malaysia, which - if 
successful - will create a strong foundation for Ma laysia to compete successfully regionally and 
internationally in the years ahead. 
111. We commend the steps that Malaysia has taken to relax foreign investment restrictions in 
services such as investment banking, insuran ce, stock brokerages, and fund management.  
Recognizing the importance of the services sector fo r the Malaysian economy, and the government’s 
plans to increase services’ share of GDP to 60% by 2020, we would welcome an update from Malaysia’s delegation on any further plans that it ma y have for structural reform and market-opening 
in the services sector.  We urge Malaysia to consid er further liberalization in sectors where foreign 
equity restrictions remain and to extend the pro cess of reform to sectors such as professional services 
where there have been few improvements. 
112. There has been progress on intellectual property rights protection, including the creation of a 
dedicated intellectual property court in 2007.  In a ddition, there have been creative efforts by the 
government to promote a greater awareness of th e economic benefits of protecting intellectual 
property rights.  These efforts are essential to the success of Malaysia’s efforts to build its innovative 
services- and knowledge-based industries.  We wo uld appreciate an update from the Malaysian WT/TPR/M/225 
Page 18  
 
  delegation on its experience thus far with the courts as well as statistics on enforcement activity in 
2008 and 2009. 
113. Among the biggest challenges for Malaysia’s struct ural reform will come in sectors that have 
long been protected, such as automobiles, and on sensitive issues such as gov ernment procurement.  
In the automotive sector, recent re forms have been somewhat disappointing.  The new automotive 
policy allows for the granting of new manufacturing licenses for luxury vehicles and hybrid electric 
vehicles, that is, only products that do not compete wi th national brands and are not currently made in 
Malaysia.  The new policy also does not allow for imports of automotive products that compete with 
national champions such as Proton and Perodua; on th e contrary, it retains the approved permit system 
for another ten years, effectively imposing quantitativ e restrictions for a broad class of motor vehicles 
until 2010.  We urge Malaysia to  take additional steps to promote structural reform, openness, and 
competition in this sector.  
114. On import licensing, we welcome Malaysia’s phasing out of requirements for some tariff 
lines.  Nevertheless, we remain concerned that Ma laysia continues to expansively use non-automatic 
import licensing requirements across broad portions of its tariff schedule.  The Secretariat Report says 
that these policies are sometimes intended to “regulate the flow of imports” and to “promote strategic 
industries”.  We would appreciate further informa tion from the delegation of Malaysia on the current 
scope of import licensing and the reasons why it co ntinues to be necessary across so many products. 
115. We would like to take a moment to acknowle dge Malaysia’s engage ment on its proposed 
conformity assessment regime for toys, which is much appreciated.  The WTO Agreement on Technical Barriers to Trade calls for conformity asse ssment procedures to be based on relevant guides 
or recommendations issued by international sta ndardizing bodies, where appropriate, and for their 
development to include opportunities for other Memb ers to participate.  Malaysia’s willingness to 
engage with us on this basis with respect to its to y safety regime is much appreciated. Specifically, we 
would like to acknowledge Malaysia’s recent decision to change the approach of its new conformity 
assessment regime from type approval to a more trade-facilitative approach  based on suppliers’ self 
declaration of conformance. 
116. We are pleased to note that Malaysia intr oduced advance customs rulings on classification 
and valuation in 2007.  According to the Secretaria t Report, your government is of the view that the 
advance notification of the rulings is helping with goods clearance and facilitating trade for the 
business community.  We look forward to learning more about this change during the course of the TPR. 
117. I would also like to emphasize that we continue  to value our close work with Malaysia and 
our WTO partners to strengthen and build on the WTO’s rules-based and cooperative foundation.  But 
more work is needed to reach a balanced and amb itious conclusion to the Doha Round.  To achieve a 
Doha outcome that results in the global economic growth necessary to spur development, meaningful 
market-opening contributions will need to be made by  all key players.  Malaysia is an important and 
dynamic economy that stands to gain from new market access opportunities generated by the Round, 
particularly in advanced developing countries.  We look forward to continuing our work with 
Malaysia and other Members to ensure these gains are realized.   
118. In closing, the United States welcomes the progr ess Malaysia has made in reforming its trade 
regime and diversifying its economy over the past  few years.  These efforts are commendable, 
particularly given the global economic downturn and the pressure to respond to this uncertainty by 
imposing new barriers.  We encourage Malaysia to continue its reform efforts, which will create a 
strong foundation for stable long-term growth, j obs, and higher living standards for its people.  WT/TPR/M/225 
 Page 19 
 
 
  JAPAN 
119. I would like to begin with the economic envi ronment in Malaysia.  The global economic and 
financial crisis has affected the economy of Malaysia , similar to most of the world. According to the 
Secretariat’s report, real GDP growth in Mala ysia fell to 4.6% in 2008 from 6.2% in 2007. 
Furthermore, the Government of Mala ysia predicts about -3% for 2009.  
120. Faced with such difficult circumstances, Malaysia has adopted bold economic and trade 
policy with an economic stimulus package of abou t US$20 billion and further liberalization. In 
particular, Japan welcomes the recent liberalizati on policies for trade and investment both in goods 
and services, introduced under the Najib administration.  
121. In the services sector, the recent liberalization measures taken have included, for example, the 
elimination of foreign equity restrictions on 27  service sub-sectors, the issuance of new licenses for 
banking, the relaxation of foreign investment restri ctions in securities, and the deregulation of the 
Foreign Investment Committee guidelines.  
122. In goods, a reduction of tariffs for steel produc ts and a phase-out of the approval permits 
system for imported motor vehicles were announced after reviews of the previous policies.  
123. Japan believes that these policies will bring pos itive effects for both the Malaysian and the 
global economy.  
124. Having said that, we would like to point out that various measures introduced by the 
Government of Malaysia could be interpreted as protectionist measures. These are: the implementation of mandatory standards on imported steel products, the freeze in recruitment of 
foreign labor for electronics and textiles, and the introduction of stricter requirements for visas for 
foreign employees. We have also heard that th ese measures were introduced with short notice and 
little information.  
125. Although some of these measures have been re pealed in response to requests from our 
embassy, we see that not all the problems have been  solved. Japan would like Malaysia to consider 
further revision of these measures and hopes that Malaysia will maximize the benefits of its 
liberalization policies to which I referred earlier. 
126. Japan also notes that Malaysia is providing technical assistance and other forms of aid to the 
member countries of the Organization of the Islami c Conference (OIC) based on its experience, such 
as halal meat standardization, while developing its own capacity for trade. 
127. In conclusion, Japan would like to reiterate its hope that Malaysia will continue its efforts to 
promote and liberalize its economy and trade, in orde r to benefit from the multilateral trading system.  
HONG KONG, CHINA General 
128. Hong Kong, China and Malaysia enjoy a very clo se trading relationship.  In 2008, Malaysia 
was our 11
th largest trading partner, our 13th largest market for domestic exports, 16th largest for re-
exports, and 7th largest as a source of imports.  The average annual growth rate in our bilateral trade 
was 7.5% from 2004 to 2008.  We certainly hope  that this momentum can be sustained. 
129. As it happens, Hong Kong, China and Malaysia signed a Joint Declaration on Strengthening 
Economic Co-operation just over a month ago here  in Geneva.  This serves to underline and WT/TPR/M/225 
Page 20  
 
  emphasise the close trade and economic ties between us .  It also lays the foundation for a possible free 
trade agreement between the two sides that would be consistent with WTO principles and provisions 
and that could contribute to further multilateral trad e liberalization.  We look forward to working 
closely with Malaysia in this regard, to strengthe n our economic relationship further, especially in the 
areas of trade and investment. 
130. We also note that Malaysia has been taking important steps to develop its services sector.  
With its burgeoning and sophisticated services econom y, Malaysia offers us many further possibilities 
for economic co-operation. 
131. Over the past year or so, all economies have  suffered to varying degrees from the downturn 
resulting from the unprecedented financial and ec onomic crisis.  Despite these difficult times, 
Malaysia has not succumbed to the increasing pressure for protectionist measures, but has pressed 
ahead with its on-going efforts to liberali ze trade in goods and services, on some occasions 
unilaterally.  As an externally-oriented econom y, Hong Kong, China welcomes such efforts. 
Investment 
132. Turning to some specific aspects covered in the Report, firstly on investment, we are pleased 
to note that during the review period, the Malays ian government has been relaxing equity and other 
restrictions on foreign investment, particularly in  the services sector.  The announcement in June 2009 
of Foreign Investment Committee guidelines to reduce the equity requirements in respect of ethnic 
Malays in the acquisition of interests, mergers,  and takeovers was a commendable move.  Noting its 
plan to “undertake further liberali zation in an effort to attract FDI and spur private investment 
activities”, we encourage Malaysia to introduce simila r improvements in other sectors that have yet to 
be liberalized. 
Tariff 
133. On tariffs, we are pleased to note that Malays ia has reduced its average applied MFN tariff 
rate from 8.1% in 2005 to 7.4% in 2009.  However, there was, in general, a gap between Malaysia’s 
applied rates (average 7.4% as I just mentioned) and bound rates (average 15.6%).  Besides, as the 
Secretariat Report has pointed out, Malaysia’s tariff structure has a certain degree of complexity due 
to the existence of non- ad valorem  rates that could be considerably higher than the simple average of 
all ad valorem  rates.  We would encourage Malaysia to  continue its efforts in bringing down its 
applied rates and simplifying its tariff structure. 
Agriculture  
134. Malaysia has a generally liberal trade regime  for agricultural products, with an average 
applied MFN tariff in agricultural products of 2.8% in 2009.  However, we are concerned that some 
non-ad valorem  tariffs may inadvertently conceal relativel y high rates.  We understand that Malaysia 
is reviewing its use of non- ad valorem  duties in line with the Doha Development Agenda 
negotiations, and we look forward to their early re duction in order to enhance certainty to trading 
partners. 
Services 
135. As noted from the Secretariat and Governme nt Reports, services account for a substantial 
proportion of Malaysia’s economy, in terms of bot h GDP and total employment.  We would like to 
echo the Secretariat’s comments that a more liberal trade and investment regime for services would contribute greatly to Malaysia ’s long-term economic growth.  WT/TPR/M/225 
 Page 21 
 
 
  136. In this regard, we commend Malaysia’s recen t unilateral liberalization reform initiatives, 
encompassing 27 services subsectors.  We would lik e to encourage Malaysia to maintain such 
welcome moves.  
Standards and Other Technical Requirements  
137. We note that Malaysia has been actively invo lved in the development of international 
standards through its participation in  international standard-setting bod ies.  As of 2008, some 58.1% 
of Malaysian standards have been harmonized with international standards, up from 51% in 2005.  It 
has also participated in the ASEAN Electrical  and Electronic Mutual Recognition Arrangements 
(MRAs), as well as the ASEAN MRA on Pharmaceutical  Inspection.  To facilitate the flow of 
international trade, we encourage Malaysia to harm onize its standards with international ones, and to 
participate further in the development of MRAs. 
AUSTRALIA 
 
138. Australia and Malaysia have a dynamic tradi ng relationship and share a strong commitment to 
global free trade to drive economic growth and deve lopment in the Asia-Pacific region and globally. 
139. In 2008, Malaysia was Australia’s 11th largest two-way goods and services trade partner, and 
3rd largest within ASEAN.  Malaysian investment in Australia has grown strongly in recent years.  At 
the end of 2008, the level of Malaysian foreign investment in Australia was $10.1 billion, making 
Malaysia the 14th largest investor in Australia.  At the end of 2008, the stock of Australian foreign 
investment in Malaysia was $2.8 billion. 
140. Our shared commitment to liberalisation w as demonstrated as both countries were co-
signatories to the ASEAN-Austra lia-New Zealand Free Trade Agre ement (AANZFTA), which came 
into effect on 1 January 2010.  This comprehensiv e treaty is Australia’s largest Free Trade Agreement 
and sets a new benchmark for economic liberalisation and integration in the region.  Australia and 
Malaysia are now focused on building on the ach ievements of AANZFTA through the negotiation of 
the Malaysia-Australia Free Trade Agreement (MAFTA). 
141. Australia welcomes Malaysia’s announcement that  it intends to rejuvenate its economy, and 
respond to the global economic crisis, through the introduction of a New Economic Model.  
Malaysia’s decisions to abolish the Foreign Invest ment Committee Guidelines, reform its tax system, 
and streamline investment approval procedures, and the ongoing policy reviews in some services 
sectors are encouraging signs that we can expect mo re trade liberalisation initiatives from Malaysia in 
2010.  We look forward to Malays ia’s announcements on the details  of its New Economic Model and 
the 10th Malaysia Plan, and, in the meantime, we w ill be aiming to learn more about Malaysia’s 
economic reform agenda through the TPR process. 
142. It is vital during this period of increased econom ic uncertainty that all nations sustain their 
commitment to trade liberalisation, particularly  in the WTO.  A successful outcome to the Doha 
Round – one that delivers improvements in market access across agriculture, industrial products and 
services – would provide a major boost for the world economy, strengthen the multilateral trading 
system, and make an important contribution to improving global food security.  It is also the best insurance against protectionism.  Malaysia’s ong oing support for conclusion of the Doha Round is 
welcome.  Australia will continue to work closel y with Malaysia, including in the Cairns Group, as 
well as with other WTO Members, to conclude the Doha Round as soon as possible. WT/TPR/M/225 
Page 22  
 
  NORWAY 
143. The current economic downturn has affected most  of the world economy, and Malaysia is no 
exception.  Nonetheless, many of the economic lib eralization programs initiated by the government, 
particularly in the services sector, will have a lasti ng impact on Malaysia’s economic recovery efforts.  
Norway commends the government for its commitm ent to relaxing restrictions on competition and 
FDI.   
144. Not only will such steps help increase efficien cy and promote transparency, but it will also 
promote the kind of investments necessary for Malaysia ’s return to its previous high growth path and 
to achieve the government’s aim to increase servi ces’ share of GDP from around 50% to 60% by 
2020. 
145. Norway values Malaysia’s active role and contri bution to the work of the WTO, including in 
the Doha Development Agenda. We value Malaysia ’s constructive engageme nt and commitment to 
the multilateral trading system.  
146. Despite the global reduction in trade, trade between Norway and Malaysia continued to 
increase in 2008.     
147. In 2008, Norwegian imports from Malaysia am ounted to US$256 million, an increase by 33% 
compared to 2007.  The most important products are machinery, fats and oil, furniture and bedding, 
iron/steel products, rubber, optics, wood, plastic, organic chemicals and mis cellaneous manufacturing. 
148. Norway’s export to Malaysia amounted to US $127 million, an increase by 30% compared to 
2007.  The most important products are machinery, optics, chemical products, arms and ammunition, 
and fish and seafood. 
149. In recent years, a number of large-scale Norwegian investments have taken place in Malaysia, 
primarily in the fields of telecommunication, mariti me transportation, and oil and gas.  In the period 
2006-08, the number of Norwegian companies in Mala ysia increased by 38%;  a clear indication of 
the growing attractiveness of the Malaysian mark et and a testament to the government’s recent 
liberalization policies. 
150. There are, nonetheless, specific areas of Malays ia’s trade and investment regime where action 
could lead to improved trade, enhanced transf er of technology and investment flows.   
151. Norway recognizes measures taken to streamlin e the regulatory framework and the removal 
or reduction of equity and other restrictions on fo reign investment. We welcome the liberalization of 
the Foreign Investment Committee guidelines and would encourage Malaysia to consider further steps 
in the same direction. Furthermore, we note the declared commitment of the Government to 
improving transparency and fighting corruption. 
152. We would, moreover, like to recognize Malaysia’s  efforts to further strengthen its intellectual 
property regime.  
153. Norway also appreciates Malaysia’s recognition of the importance of competition policy in a 
modern policy infrastructure and praises the govern ment’s current efforts in drafting new competition 
legislation.  Norway will follow the developments in the areas of IPR and antitrust legislation with 
keen interest.   
154. As the Secretariat’s report illustrates, more  measures could be implemented to promote 
competition, especially in the services sector.  Govern ment linked companies continue to play a major  WT/TPR/M/225 
 Page 23 
 
 
  role in the Malaysian economy through their invo lvement in the provision of services such as 
transportation, energy and telecommunication.   Ensuring level competition among Malaysia’s 
publicly owned corporations, govern ment linked companies and the private sector remains critical.  
Particularly at this time, Norway would like to en courage Malaysia to consider measures to further 
open its own markets in a manner commensurate with  its dependence on global trade.  Such steps 
would reduce costs and market distortions, improve utilization of factors of production, and spur 
innovation.  
155. Preferential government procurement proce dures continue, as the Secretariat’s report 
underscores, to be used as a major instrument of industrial policy to favour locally owned businesses; 
international tenders are invited only if goods and services are not available locally.   
156. The WTO Government Procurement Agreement (GPA) is designed to ensure that laws, 
regulations, procedures and practices regarding governme nt are transparent, and to ensure they do not 
discriminate against foreign products or suppliers.  In view of Malaysia’s continuous process of 
reform and liberalization of its tr ade and investment regime, we woul d encourage Malaysia to join the 
GPA, thus also contributing to a strengthening of the WTO. 
157. Norway has a particular interest in maritime transportation, and this sector is in general 
relatively open in Malaysia. We welcome positive st eps taken by Malaysia to reduce limitations on 
market access since the last trade policy review. Some  concerns remain however, in particular related 
to the transportation of so-called “governmental ca rgo” and the continued existence of restrictions 
related to transhipment between most domestic por ts, although we welcome recent measures to allow 
foreign-flagged vessels to tranship containers between specific ports. 
ECUADOR 
158. Malaysia, like most countries, has not been i mmune to the effects of the global financial 
crisis.  The steady growth maintained by its economy in recent years slowed down in 2008 and 
deteriorated sharply in the first quarter of 2009.  The Government of Malaysia reacted swiftly, adopting measures that favoured public spending and the growth of private consumption, and thus 
succeeded in cushioning the economic do wnturn in the subsequent quarter s of 2009.  We hope that the 
projections for real GDP growth in 2010 point to the beginning of a steady recovery. 
159. As noted in the Secretariat's report, Malays ia has redirected its global economic policy 
objectives towards the development of services.  This  strategy seems appropriate given the extreme 
vulnerability of the Malaysian economy in the face of the concentration of export destination markets 
and the source of foreign investment.  Enha ncing export competitiveness and increasing and 
diversifying trading partners are parallel objectiv es that will help to reduce such vulnerability. 
160. With regard to Malaysia's trade policy instrume nts, tariffs constitute the main border measure 
affecting imports of goods.  In 2009, Malaysia ma intained a relatively low average MFN tariff of 
7.4 per cent, yet according to the Secretariat's report around one fifth of tariff lines are unbound and a considerable portion, including some agricultural pr oduct lines, is subject to import licensing, most of 
which is non-automatic.  In the agricultural sector, products are also subject to non- ad valorem  tariffs, 
which tend to conceal relatively high rates.  We call upon the Government of Malaysia to make its 
tariff regime more transparent by binding all its tariff lines in ad valorem  terms and reducing the 
numbers of products that require import licences. 
161. The Secretariat's report also notes the importance given by Malaysia to direct and indirect tax 
incentives as an instrument of industrial policy.  If pos sible, we would like to know the estimated total 
value of the tax revenue that Malaysia has forgone as a result of such incentives. WT/TPR/M/225 
Page 24  
 
  CANADA 
162. Canada is pleased to participate in the Trade Policy Review of Malaysia, its most important 
trading partner in South East Asia.  We hope that th is review will give rise to a constructive exchange 
of views on all aspects of Malaysia's trade policy regime. 
163. Since the country's last review in 2006, the G overnment of Malaysia has pursued its prudent 
macroeconomic and structural reforms in key areas such as the financial sector, and this against the 
backdrop of an unprecedented global economic dow nturn, a recovery in oil prices, and a 
H1N1 influenza A pandemic.  These initiatives, relating to the ongoing process of opening up trade in 
Malaysia, the country's trade and investment liberal ization policy, and the partial reduction of certain 
demands and preferences granted to the Bumiputra , enabled the country to benefit from steady 
economic growth until the drop in the external dema nd for manufactured products at the end of 2008.  
Canada welcomes the importance that Malaysia gives to regional and bilateral trade agreements, in 
particular its efforts to ensure that the ASE AN (Association of Southeast Asian Nations) Economic 
Community is up and running by 2015;  its active pa rticipation in the activities of the Asia Pacific 
Economic Cooperation (APEC) forum with a view to  strengthening and diversifying its trade and 
financial links;  and its improved connec tivity with the region's supply chain. 
164. Canada notes that Malaysia’s tariff regime is still the main border measure affecting imports.  
Furthermore, a considerable portion of Malaysia’s tariff lines is subject to import licensing, most of 
which are non-automatic which affects the flow of its agricultural imports. Canada thus encourages 
Malaysia to continue making meaningful contri butions to concluding the Doha Round to improve 
market access by lowering and elim inating tariff and non-tariff barriers. 
165. With regards to Malaysia’s efforts in its appr oach to standards and standardization initiatives, 
Canada congratulates Malaysia’s success in aligning a bout 58% of its standards with internationally 
accepted formats since its last review, thus promo ting greater transparency in Malaysia’s trade 
relations. We are also pleased to note Malaysia ’s continued commitment to Intellectual Property 
Rights enforcement with the establishment of IP courts. However, with respect to Malaysia's 
procurement regime, a greater commitment by Malaysia to increased transparency and better 
prevention of contracting irregularities within the public sector would help to address ongoing 
concerns in relation to international pa rticipation in Malaysian procurements. 
166. Malaysia’s shift in economic policy, during the review period, toward developing its services 
sectors and reducing its reliance on manufactured expor ts demonstrates its Government’s desire to 
establish a resilient, diversified and sustainable ec onomy. This shift will help it to stay on course 
towards achieving further significant economic deve lopment by 2020. Malaysia is at a critical 
juncture in its economic reforms - the continued lib eralization of its services sectors (which account 
for 45% of its GDP), investment policies, and a co mmitment to the development of human capital will 
allow Malaysia to become more competitive and e fficient, as it moves toward its goal of creating a 
high income economy focussed on innovation, creativity and productivity.  
ARGENTINA 
167. On this occasion, given the negative impact th at the global financial crisis has had on the 
growth of trade in developing countries over the last two years, Malaysia's trade policy review is of 
particular importance as it provides an opportunity to assess the steps that a developing Member like 
Malaysia has taken in response to the crisis. 
168. In this respect, we see that Malaysia r eacted swiftly by adopting macroeconomic and 
structural policies to cushion the economic slowdown recorded in the first quarter of 2009.  It should 
be noted that, despite the global economic crisis which began in 2008, Mala ysia has continued to  WT/TPR/M/225 
 Page 25 
 
 
  liberalize its trade and trade-related policies.  We hope that this opening up of trade will be 
consolidated and that it will continue in accord ance with the long-term objectives for agricultural 
trade reform and the Doha Mandate. 
169. We are pleased to see that since its last review , Malaysia has eliminated or reduced applied 
MFN tariffs on a range of agricultural products of inte rest to Argentina, part ly in accordance with its 
WTO commitments, but mainly unilaterally.  Also, desp ite the fact that around 20 per cent of its tariff 
lines are unbound, leaving considerable scope for the raising of tariffs, such increases have rarely 
occurred.  Nonetheless, ad valorem  equivalents for various agricultural products continue to be high 
(392 per cent on average). 
170. Worthy of note are the ambitious goals set by Malaysia under various plans, such as the 
Ninth Malaysia Plan (2006-2010) and the Third Industrial Master Plan (2006-2020) which seek to 
improve productivity and lay solid foundations for fu ture growth.  It should be noted that these 
structural reforms have not brought about any add itional trade barriers;  on the contrary, as mentioned 
above, they have led to the introduction of a number of unilateral measures aimed at liberalizing trade 
and foreign investment. 
171. As members of the Cairns Group, Argentina a nd Malaysia share a common objective which is 
to reduce substantially all distortions in the globa l market, in particular through the elimination of 
agricultural subsidies and the lowering of tariffs.  In this sense, we also share the understanding that 
the multilateral trading system provides the predicta bility and transparency needed in international 
trade relations. 
172. Our economic ties with Malaysia are important to us and we hope to be able to enhance them 
in the near future.  In 1992, we signed an agr eement on economic, trade, scientific and technical 
cooperation which, among other things, provides for Joint Committee meetings.  Such meetings 
ensure fluid contact between the various sectors of our Governments, with the clear objective of encouraging closer ties and a greater awareness of opportunities for cooperation between the Argentine and Malaysian economies, thereby fac ilitating the business activities of both countries. 
EUROPEAN UNION 
173. Malaysia is an interesting country when it comes to looking at factors that can help or impede 
development. Malaysia’s impressive economic deve lopment raises interesting questions: about the 
role – or non-role, of development aid in that success; about the impact on economic development of 
affirmative action policies aimed at helping ethnic groups have a larger say in the economy; and about 
the extent to which interventionist government policies and a particular political model have 
contributed or held back development.  These are is sues that are the backdrop of this review, even if 
not addressed directly.  
174. It is very commendable that Malaysia has con tinued to liberalize its trade and trade-related 
policies, mainly autonomously, notwithstanding th e global economic crisis. Keeping markets open 
and pursuing sectoral restructuring where needed, have greatly helped Malaysia to smoothly 
withstand the crisis. Malaysia has stated that its st rategy for future continued growth hinges on further 
autonomous trade liberalization, enhanced compet ition – which in our view is greatly needed- 
unrestricted FDI, and relaxation of barriers to trad e in services. Malaysia clearly understands that 
international trade is not at all zero-sum game and that welfare gains can be realised via autonomous 
liberalisation and dismantling of existing trade barrier s and restrictions on investment.  We are fully 
aware that these policies and measures are not easy to push through, so we commend the Malaysian 
government for its efforts and firm determination.   We can only but encourage the Government of 
Malaysia to continue pursuing this promising path  and extending the liberalisation efforts to more 
sectors.  WT/TPR/M/225 
Page 26  
 
  175. Recent liberalisation measures, the implementation of the New Economic Model and the 
services sector liberalisation roadmap should all contribute to encouraging investment in Malaysia. The announced modification of the Foreign Invest ment Committee guidelines is  also a remarkable 
step forward. But it is important that regulat ory frameworks are underpinned by principles that 
increase investor's confidence: transparency, pr otection, inclusive decision-making, as well as 
predictability. 
176. Malaysia is the EU’s second largest trading part ner in ASEAN, after Singapore. The value of 
the EU-Malaysia trade in 2009 was estimated at €30 billion, with a positive balance for Malaysia of 
about €6 billion. As regards FDI, in 2008, the tota l EU stock amounted to €4.5 bn.  These are not 
negligible figures at all. But more can be done. We are committed to further enhancing and upgrading 
our bilateral trade and investment relations with Malaysia. To date, Malaysia benefits greatly from 
autonomous preferences granted under the EU GSP. As a next step, and in view of Malaysia's firm 
resolve to adopt developed status in the near future , new channels of closer bilateral cooperation could 
be built. The EU reiterates its willingness to  strengthen economic and commercial ties. 
177. In parallel, we have foreseen to provide so me technical cooperation programmes to Malaysia, 
not development aid in the classic sense since Malays ia has attained a level of economic development 
that makes that unnecessary, but joint programmes of cooperation in fields such as trade facilitation, 
tropical forest management and higher education.  Unfortunately, Malaysia cannot agree to some 
provisions in the Commission’s standard Financin g Agreement and therefore the legal basis for 
launching the programme and funds is not yet in place.  
178. Let me now briefly turn to a number of areas where we could encourage Malaysia to do more, 
and go further, in its trade and economic policies.  
179. Now, although Malaysia has moved in the right direction in terms of reform and 
liberalization, there is still more to be done. For in stance, Malaysia must be prepared to pursue in 
earnest the liberalisation drive in  the services sector and do away with the remaining equity caps and 
requirements on foreign ownership across many sectors. It must be also prepared to review its 
government procurement policy, with a view to pr oviding more predictability and transparency, 
which could result in a non-discriminatory and open  regime. It seems to us that a country at 
Malaysia’s level of development should open its public procurement in  order to offer better value for 
money for its taxpayers.  
180. Further work is also required to strengthen enfo rcement of intellectual rights. Despite recent 
efforts, deficient enforcement of the domestic IPR regulations and the lack of trained investigators 
remain a problem. The report notes that the Intell ectual Property Court was established in July 2007. 
We welcome that development and it would be inter esting if Malaysia shared with us its impressions 
regarding the Courts' achievements since it was established, and its imminent plans to improve 
enforcement of IPR laws and regulations. 
181. The report notes that standards and standardi zation activities are among Malaysia's priorities, 
and we encourage the Malaysian authorities to pur suing continued work towards further alignment 
with international standards. In this regard, Mala ysia's involvement in the International Organisation 
of Standardisation (ISO) is to be welcomed.  
182. Unfortunately, Malaysia does not have this forthc oming approach to international standards in 
the SPS field. Malaysia currently restricts imports of pork, poultry, beef and their products on an arbitrary, non-transparent and unpredictable basis. These arbitrary controls are not grounded on 
scientific-based risk assessments, thus departing fro m obligations set out in the WTO SPS Agreement. 
Therefore, we strongly reiterate the need to revi ew these import conditions and to bring them in line 
with international standards, and if deviating from these, to provide the relevant risk-assessment based  WT/TPR/M/225 
 Page 27 
 
 
  on science, in compliance thus with Malaysia's ob ligations under the WTO SPS Agreement. We urge 
Malaysia to duly follow the international guidelines and recommendations set out by the OIE and to 
abide by its WTO obligations.   
183. The Government has recently reviewed its Na tional Automotive Policy, which has introduced 
important changes, including the gradual removal of  the approval permits system.  However, as the 
report notes, the national car industry remains prot ected. Some measures re main problematic, and I 
cite two: the discriminatory excise tax rebates - only accorded to domestic producers - and its newly 
introduced car scrapping scheme we understand excl usively favours domestic sales. We would be 
interested to know under what grounds Malaysia ju stifies these measures, and its immediate plans to 
make its national automotive polic y more open for competition.  
BRUNEI DARUSSALAM ON BEHALF OF ASEAN 
184. Malaysia is a very important trading partner in the ASEAN region.  Year on year, a total of 
25% of Malaysia’s exports are absorbed within ASEAN, whilst 24% of its imports are sourced from 
ASEAN.  This interdependence will only continue  to grow with the realization of the ASEAN 
Economic Community by 2015, which will establish  a single market and production base in the 
ASEAN region, with a free flow of goods, services and investment. 
185. Towards establishing the ASEAN Economic Co mmunity, Malaysia has undertaken measures 
towards achieving a free flow of goods, for which it has already eliminated 99.4% of its tariffs, 
making its average tariff rate under AFTA 0.95%.  Malaysia has also removed non-tariff barriers and 
has adopted trade facilitation measures such as harmonizing product standards and technical 
regulations, amongst others.  According to the Secretar iat Report, Malaysia aims  to align its standards 
with international standards, in 2008 some 58% were aligned, up from 51% in 2005.  Meanwhile 
Malaysia has also removed services restrictions in fo ur priority sectors of air transport, IT, healthcare 
and tourism, and will be furthe r liberalizing restrictions in the logistics sector by 2013. 
186. Malaysia as part of ASEAN has also engage d in fostering economic linkages through the 
establishment of RTAs with China, Korea, Ja pan, Australia and New Zealand, and India, 
complementary to its own bilateral pursuits, which simultaneously serve as building blocks towards a 
strengthened multilateral trading system. 
187. We note that its economy continued to grow st eadily until the last quarter of 2008 with the 
onset of the global financial crisis.  The consequent  steep decline in exports continued to impact the 
economy negatively in 2009, however, Malaysia’s Government were pr ompt to respond to the crisis 
through macroeconomic and structural policies, and together with higer public spending and a 
positive growth in private consumption, the cont raction of the economy was lessened in the second 
quarter of 2009. 
188. We also note that Malaysia’s healthy foreign ex change reserves, its relatively small external 
debt as well as ongoing financial and corporate sect or restructuring have enabled Malaysia to 
withstand the global financial crisis. 
189. ASEAN would therefore like to commend the Malaysian Government’s efforts towards 
mitigating the effects of the recession on its economy  and certainly look forward to its full recovery 
and the growth of its GDP as projected. 
190. Allow me to continue with specific aspects of Malaysia’s trade policies and measures.  Since 
the last Trade Policy Review, I note the Secretariat Re port that Malaysia has continued to liberalize its 
trade and trade related policy, mainly unilaterally , in spite of the global economic recession that 
ensued in the latter part of 2008. WT/TPR/M/225 
Page 28  
 
  191. This resulted in the average applied MFN tariff of 7.4% in 2009, down from 8.1% in 2005.  In 
addition to this, almost all tariff lines were ad valorem  with 80% of tariff lines bound, contributing 
strongly to transparency and predictability. 
192. We are also pleased to learn that Malaysia has been reducing its reliance on exports of 
manufactured goods, diversifying the export product range and has unilaterally been liberalizing its 
services sectors with a view to increasing the servi ces hare of the GDP to 60% by 2020.  In April 
2009, the Government had announced  the liberalization of 27 subsectors, thereby allowing 100% 
foreign owned investments in these sectors. 
193. Also in terms of services, Malaysia has c ontinued to liberalize its financial services, 
particularly in the banking and insurance sectors, where equity limits have been relaxed and more 
operation flexibilities given, where the sector has shown to be growing at 7.7% in 2008. 
194. Malaysia’s initiatives are a testament to her resolve in remaining open and avoiding 
protectionist tendencies throughout these difficult econom ic times, in addition to which she has also 
begun drafting more comprehensive competition laws, and has made efforts towards strengthening its 
IP regime, improving its enforcement, including the establishment of IP courts. 
195. Malaysia has always been a strong supporter of the multilateral trading system and has 
actively participated in all areas of the DDA negotiations, amongst which included her tenure of 
chairing the General Council in 2007 and various chairm anships prior to that.  Malaysia has always 
taken on a facilitative role throughout and has cont ributed greatly to the negotiation process, which 
we highly appreciate in this regard. 
PERU 
 196. Malaysia is a case of particular interest, firstly because of its significant economic growth and 
development in recent decades, having evolved from an agriculture-based economy to one based on 
the production of manufactured goods, most notably information technology and electronic products, 
and secondly because of its industrial development and its current transition towards a services 
economy, a process in which international trade plays a key role. 
197. Peru shares Malaysia's interests in a number of areas in the WTO framework, the 
Doha Round negotiations a nd APEC.  Trade between our countries has tripled since 2001, rising from 
just over US$46 million to around US$158 million in 2008.  Despite this significant increase in trade 
values and volumes, we believe there is still much room for enhancing this relationship. 
198. Peru's main exports to Malaysia are flour, fish oil, tinned fish, agricultural products such as 
fresh grapes and coffee, and chemicals such as boric acid.  Peru's main imports from Malaysia are 
radio receivers, sound-reproducing apparatus, teleco mmunications equipment, information technology 
products and crockery. 
199. Since 1995, our countries have been party to an agreement on the reciprocal promotion and 
protection of investments, whereby they undert ake to promote and protect their investments 
reciprocally by enhancing their trade relationship,  a commitment reflected in recent business missions 
to explore the possibility of major palm oil inv estment projects in Peru.  Peru sees considerable 
potential in this bilateral relationship and has th erefore submitted a number of questions regarding 
Malaysia's trade policy and practices. 
200. Worthy of note are Malaysia's various sector al development planning tools, such as the 
Third Industrial Master Plan covering the period 200 6-2020, and the Tenth Malaysia Plan, currently 
being formulated for the period 2011-2015, the aim of which is to build a high-income economy, one  WT/TPR/M/225 
 Page 29 
 
 
  accompanied by constant innovation and creativity, wh ile boosting productivity, most notably in the 
services sector, which is to be developed as the ne xt engine of growth.  The Ninth Malaysia Plan 
meanwhile focuses on revitalizing agriculture a nd fisheries, with the report mentioning the 
development of agricultural infrastruct ure and aquaculture industrial zones. 
201. We hope that the projections and objectives of su ch plans continue to be met, in particular 
with regard to import competition, which should progressively intensify as the internal obstacles still 
present in some areas of agricultural and industrial  activity, and most notab ly in the services sector, 
are dismantled, as explained by our speaker. 
202. Peru is very interested in Malaysia's experien ce in this regard, and also in the implementation 
of its policy for improving competitiveness, and would therefore like to look at the possibility of 
sharing these experiences. 
203. Peru has also formulated a number of questions  with a view to gaining a better understanding 
of Malaysia's trade policy and the instruments the count ry uses, in particular with regard to subsidies, 
import licensing, technical standards, government  procurement, and transport, professional and 
distribution services. 
204. We would, for instance, like to know how Mala ysia has managed to prevent its subsidy and 
price control policy in respect of some agri cultural products from posing a potential risk to 
international trade, given that its exports might, possi bly, be subsidized and thus make access difficult 
for competing foreign products.  Another issue is th at of certain agricultural products being subject to 
import licensing.  With regard to services, although steps are being taken to allow participation of 
professional services in Malaysia, the supply of legal services and engineering services remains 
restricted.  Restrictions in the retail sales mark et may also cause distortions in the distribution 
business, and my country would therefore like to k now if Malaysia has considered opening up this 
market in the future. 
EGYPT 
205. Egypt would like to congratulate Malaysia fo r its economic performance especially for its 
steady rate of growth during the period 2005-08. In  2009 it was obvious that the Malaysian economy 
noticeably affected, like many other countries with  the crisis. Despite that, the government of 
Malaysia reacted promptly and successfully with both macroeconomic and structural policies to 
mitigate the negative consequences of the crises. 
206. The policies adopted were successful and led to l ess contraction percentage of 3.9% in the 2nd 
quarter of 2009 compared to 6.2% in the 1st quarter of the same year. It is expected that the Malaysian 
economy will achieve positive results this year.  
207. The intention of the Malaysian Government to reduce the reliance on exports of semi 
manufactured goods and increase the share of services in the GDP is worth exploring. We would appreciate further information from the Delegation of  Malaysia on how this objective will be achieved 
across the set time as well as its relation to the overa ll objective of Malaysia to achieve a developed-
nation status in 2020.   
208. Malaysia and Egypt already share strong political  and social relations. However, there is 
much potential for both countries to expand economic and trade ties.  
209. The bilateral trade and investment relations are set to move on a new growth trajectory, 
H.E. Eng. Rachid Mohamed Rachid, Minister of Tr ade and Industry of Egypt and his delegation paid 
an official visit to Malaysia from 9-12 January 2010. This visit is also a follow-up to MITI Minister’s WT/TPR/M/225 
Page 30  
 
  Trade and Investment Mission to Cairo, Egypt from 6-8 October 2009. This return visit of the 
Egyptian Minister within a period of 3 months demonstrates the genuine wish to advance both 
countries’ engagement, particularly in economic, trade and investment ties. 
210. We would like as well to commend Malaysia for its commitment to the DDA and its 
continues willingness to reach a succ essful conclusion of the round. 
COSTA RICA 
211. Costa Rica is participating with interest in  this Trade Policy Review and would like to 
highlight the Malaysian Government's prompt and fitting response to the unfavourable economic 
circumstances of the past year.  Malaysia is to be particularly commended on the steps it has taken in 
response to these circumstances, which have enable d it to cushion the economic downturn and begin 
moving swiftly towards recovery despite being one of  the economies in the region most badly affected 
by the global economic crisis. 
212. My delegation feels it is important to highl ight Malaysia's outstanding export performance 
and the importance that its trade policy gives to achieving further integration into the world economy, a vision shared by my country.  In this contex t, we welcome Malaysia's initiatives to expand and 
diversify trade with existing partners and explore ne w markets, as well as the trade liberalization and 
facilitation measures it adopted during the period un der review.  It should also be noted that 
Malaysia's recent structural reforms aimed at reducing reliance on the manufacturing sector and 
increasing the importance of the services sector have  not led to the introduction of any additional 
trade barriers. 
213. The Secretariat's report has, however, also  highlighted some less positive aspects of 
Malaysia's trade policy.  We are particularly concerned about the unpredictability that may be 
generated by the relatively high percentage of unbound tariff lines and therefore welcome the efforts 
made to extend binding coverage in the Doha Round negotiations.  Our attention has also been drawn 
to the use of import licensing, for the most pa rt non-automatic, which affects approximately a 
quarter of all tariff lines. 
214. It is important to note the strong growth in tr ade between Costa Rica and Malaysia in the last 
decade.  Between 1998 and 2008, bilateral trade we nt from being almost non-existent to having an 
average growth rate of around 450 per cent, and curre ntly stands at over US$200 million.  In 2008, 
Malaysia was the third most important destination market for Costa Rican exports to Asia and the 
seventh largest supplier of Asian imports to Costa Rica.   It is worth highlighting that the largest part 
of bilateral trade is made up of products covered by the Informati on Technology Agreement, to which 
both Costa Rica and Malaysia are party. 
215. Costa Rica welcomes Malaysia's commitment to the multilateral trading system and would 
like to draw particular attention to the objectives we  share and the work we have carried out together 
as members of the Cairns Group. 
COLOMBIA 
216. We note with interest that between 2005 an d 2008, Malaysia's economy showed a marked 
growth rate (5.5 per cent on average).  This trend nevertheless deteriorated significantly in 2009:  in 
accordance with Government forecasts, the economy contracted by 3 per cent as a result of the global 
financial crisis and the sharp fall in exports.  It should be recogn ized that the Government reacted 
promptly by adopting economic policy measures aime d not at closing the Malaysian market but at 
promoting competitiveness and domestic demand, improving the services sector, and supporting the 
manufacturing sector.  WT/TPR/M/225 
 Page 31 
 
 
  217. When examining the period under review, atte ntion is drawn to how  Malaysia's economic 
policy was reoriented towards the development of services and reducing reliance on exports of 
manufactured goods.  To this end, the country has un ilaterally liberalized large areas of the services 
sector and gradually reduced applied tariffs. 
218. The results achieved demonstrate the effectiveness of this new economic strategy.  The 
services sector has now become the main driving force of economic growth, accounting for 45 per 
cent of GDP and 52 per cent of employment, and grew by 7.2 per cent in 2008.  The sector also accounts for 85 per cent of the increase in jobs. 
219. Trade policy plays a very significant role in Malaysia's economic development, as is 
demonstrated by the fact that trade in goods  and services accounts for 184 per cent of the GDP. 
220. In this respect, although MFN tariffs fell fro m 8.1 per cent to 7.4 per cent between 2005 and 
2008, it should be noted that this estimate does not take into account the effect of the non- ad valorem  
tariffs applied to 80 tariff lines, or that one fift h of all tariff lines are unbound, factors which detract 
from the transparency of the tariff regime. 
221. Imports are also affected by non-automatic import licensing, which mainly applies to 
agricultural products and so-called "s trategic" industries.  Another concern is that Malaysia has, since 
2008, applied tariff-rate quotas on imports of agricultural goods. 
222. The manufacturing sector, on the other hand, is relatively open to trade and foreign 
investment, although the automotive industry is a notable exception and remains protected and 
regulated:  in addition to a 30 per cent import tariff on vehicles, there are various opinions on whether the principle of national treatment is complied with in respect of internal taxes.  We would like to hear 
the Government of Malaysia's views in this respect. 
223. We recognize Malaysia as an active member of  the WTO and of bodies such as the Cairns 
Group, and therefore hope that it will remain committe d to an open market free of any distortion in 
agriculture, and to the conclusion of the Doha Round in 2010. 
224. Bilateral trade between Colombia and Malays ia has recently grown significantly, exceeding 
US$170 million in 2008, despite the balance show ing a large deficit for Colombia.  Given the 
complementary nature of our economies, we see ample opportunity to improve trade links. 
SINGAPORE 
225. Malaysia and Singapore share longstanding and good bilateral economic relations.  Singapore 
and Malaysia consistently feature in each other’s lis t of top trading partners, which is a testimony to 
the significant economic relations between our two c ountries.  In 2008, bilateral trade amounted to 
US$79.5 billion (S$111.5 billion), accounting for around 17.4% of total intra-ASEAN trade that year. 
226. In the area of investment flows, bilateral inv estments have been growing steadily through the 
years.  As of 2007, the total value of Malaysia’s Foreign Direct Investment into Singapore was more 
than US$9 billion (S$12.5 billion), almost three ti mes the US$3.1 billion (S$4.4 billion) reached in 
2003.  Singapore companies have also made substantia l investments in Malaysia, particularly in the 
financial services and manufacturing sectors, with to tal direct investment amounting to more than 
US$16 billion (S$22.4 billion) as of 2007.  This w as also significantly higher than the US$9.6 billion 
(S$13.5 billion) reached in 2003. 
227. In the area of trade liberalization, both Singapore and Malaysia share similar beliefs in the 
multilateral trading system.  Both our countries are fully committed to working towards the successful WT/TPR/M/225 
Page 32  
 
  conclusion of the Doha Round.  Singapore and Malaysia are also like-minded in pursuing the 
expansion of trade linkages both within and outside  ASEAN.  As members of ASEAN, Singapore and 
Malaysia share similar outlooks towards the rea lization of the ASEAN Economic Community by 
2015, as envisioned in the ASEAN Vision 2020. 
228. Singapore lauds unilateral steps taken by Malaysia  to continue liberalization in its trade and 
trade-related policies, despite the recent global economic downturn.  Notably, Malaysia announced 
the liberalization of 27 service subsectors, thereb y allowing 100% foreign owned investments in a 
range of sectors covering health and social ser vices, tourism, transport, business services and 
computer and related services.  In addition, Malays ia took steps to increase foreign equity limits from 
49% to 70% for investment banks, insurance companies, and takaful  (or Islamic insurance) operators.  
Singapore recognises the importance and benefits of  keeping markets free and open, and welcomes 
Malaysia’s efforts to continue undertaki ng further liberalization in other sectors. 
229. Singapore also commends Malaysia’s effort s to improve its business environment.  
Specifically, we note that Malaysia has lowered its  corporate income tax from 28% in 2006 to 25% in 
2009.  This would aid in reducing business costs.  Malaysia has also taken proactive steps to 
strengthen its policy infrastructure with the dr afting of a competition law under the Fair Trade 
Practices Bill (FTPB) and Fair Trade Commission B ill (FTCB).  We understand that these bills have 
reached their final stages and we look forward to  their completion and smooth implementation.  We 
encourage Malaysia to continue implementing inte rnational best practices, which would certainly 
sharpen its competitive edge. 
MEXICO 
230. Malaysia has been an important trading partner for Mexico and this is reflected in bilateral 
trade figures.  According to Mexico's figures, bila teral trade grew by 336 per cent between 2000 and 
2008, and reached US$3,348 million between January an d October 2009.  This meant that in 2008 
Malaysia became our tenth largest trading partner.  According to our figures, the main products 
exported to Malaysia in 2008 were electrical applia nces and parts thereof (18.5 per cent), iron ore 
(14.9 per cent) and railway equipment (9.2 per cent) .  Mexico's principal im ports from Malaysia were 
electronic integrated circuits (30 per cent), tele phones and parts thereof (20 per cent) and computers 
and parts thereof (7.3 per cent). 
231. With regard to foreign direct investment in Mexico, recorded investment from Malaysia has 
centred mainly on the manufacturing industry, accoun ting for almost 90 per cent of the total received 
from that country.  Foreign investment from Mexico  in Malaysia, however, has focused principally on 
the construction, food, and iron and steel sectors. 
232. Malaysia and Mexico have collaborated closely within the Asia-Pacific Economic 
Cooperation Forum, where both countries share the pr inciples of trade and investment liberalization 
and facilitation, and technical and economi c cooperation between Member economies. 
233. Moving on, I would like to put some questions to  the delegation of Malaysia.  First of all, 
with regard to intellectual property rights, we  would like to know if Malaysia envisages the 
imposition of penalties such as impris onment or fines for the infringement of industrial or intellectual 
property rights. 
234. With regard to counterfeiting, we would like to know the criteria considered for acting or not 
acting ex officio in a counterfeiting case, what pr ocedure is followed in cases where counterfeiting is 
suspected, and whether the intellectual property right holder is informed of the acts committed to its 
detriment by a third party.  We would also like th e delegation of Malaysia to describe the measures 
applied to goods detained or suspended by customs officials.  WT/TPR/M/225 
 Page 33 
 
 
  235. With regard to geographical indications, we would like to know if foreign appellations of 
origin and geographical indications are recognized at all, if there is any specific procedure for authorizing such protection, and which au thority is responsible for this matter. 
HONDURAS 
236. According to the Secretariat's report, and in line with the global economy, Malaysia's 
economy grew steadily between 2005 and 2008, but went into decline from 2008, beginning of 2009, 
as a result of the global financial crisis, with real  GDP growth of 4.6 per cent in 2008 as opposed to 
the 6.2 per cent recorded in 2007. 
237. We are pleased to see that in response to the glob al financial crisis Malaysia has adopted both 
fiscal and monetary measures to stimulate domes tic demand-led growth, the competitiveness of the 
economy, new sources of growth, the development of human capital, and export diversification.  The 
country has also relaxed restrictions on foreign investment in services. 
238. As far as multilateral initiatives are concerned,  Malaysia believes that the Doha Round 
negotiations will enhance market access opportuniti es for Malaysian products and services and have a 
positive impact on the country's economic development. 
239. I should mention that bilateral relations between Honduras and Malaysia also involve 
technical cooperation.  A technical cooperation agreement was concluded between the Honduran 
Ministry of Agriculture and Livestock and the Malaysian Tropicrop company concerning the planting of 7,000 hectares of African palm of the Yanga mbi variety.  The agreement seeks to generate 
employment and boost the economy in beneficiary areas.  Tropicrop is responsible for importing seed 
from Malaysia, setting up and managing nurseries,  and distributing seedlings for planting. 
 WT/TPR/M/225 
Page 34  
 
  V. REPLIES BY THE REPRESENTATIVE OF MALAYSIA AND ADDITIONAL 
COMMENTS 
ECONOMIC ENVIRONMENT 
 
Stimulus Package 
 
240. The Discussant and some Members have expressed interests and requested further 
information regarding measures undertaken by Mala ysia to boost the economy under the stimulus 
packages. 
241. The Government had announced two stimul us packages totaling RM7 billion on 14 
November 2008 and RM60 billion on 10 March 2009. This constituted more than 9% of GDP. 
242. The First Stimulus Package focuses on three ma in strategies aimed at strengthening the 
resilience of the economy by: ensuring the well-bei ng of all Malaysians; developing quality human 
capital; and strengthening the nation’s resilience.  
243. In addition, priority has been given to projects that can be expeditiously implemented such as 
upgrading, repair, maintenance and refurbishmen t of public amenities and rural infrastructure, 
building of low-cost houses, improving public  transport infrastructure and human capital 
development. 
244. The Second Stimulus Package is much mo re comprehensive as it encompasses various 
economic sectors and target groups. The package comp rises fiscal injections , guarantee funds, equity 
investments, private finance initiative (PFI), o ff-budget projects, as well as tax incentives.   
New Economic Model 
245. Many delegations were interested to know mo re on the proposed new economic model. This 
is an area where work is still in progress and I do not want to pre-empt the announcement to be made by the Government at the end of February this y ear.  However, some of the focus areas are: improving 
the function of the labor market;  increasing the role  of the private sector;  re-engineering the public 
institution;  improving the national talent base;  transforming the economic structure and technology 
base; and reforming the fiscal management.  
VAT issue  
246. The Discussant enquired on the progress of introduction of Goods and Services Tax (GST) 
which is a broad based VAT type tax in Malaysia .  The proposed GST will replace the current sales 
and services tax. The objective of this proposed GS T is to introduce a broad based and progressive 
system of taxation. On this, I would like to info rm that the Bill for GST implementation is currently 
being debated in Parliament.  It is targeted for implementa tion in 2011. Meanwhile, advocacy 
programmes would be undertaken to inculcate awareness and educate all stake holders on the 
proposed tax system. 
Growth of domestic demand 
247. The Discussant had raised the challenges faced in  finding new sources of growth, particularly 
in sustaining domestic demand. Similar questions were  also posed by other delegations in the written 
submissions.  
248. Domestic demand, particularly private cons umption was crucial in driving the recent 
improvements in the Malaysian economy, following th e impact of the global recession in early 2009.   WT/TPR/M/225 
 Page 35 
 
 
  As economic revival gathers pace, the private sector will need to resume its primary role in driving 
economic activity.  Of particular importance is continued growth of private investment in the services 
sector such as Islamic finance, tourism and health  services, as well as the development of enabling 
infrastructure such as in broadband and green technology. 
249. In ensuring continued growth of domestic dema nd, two factors are important. Firstly, to 
ensure that the monetary and financing cond itions remain accommodative to support domestic 
demand. Towards this end, financial sector policies will continue to ensure access to financing across 
all economic segments. Secondly, the role of fiscal  policy to support domestic demand and to place 
Malaysia in a position to resume growth once cond itions in the global economy have stabilized.   
250. An important consideration in ensuring high qua lity investment is the availability of high 
quality workforce. In this regard, we have ta ken steps to enhance our human capital through 
improvement of the education sector, training and skills programmes for the private sector as well as infusion of foreign skilled professionals in selected  services sector that have been identified as new 
growth areas. 
251. The Government is also promoting domes tic investment including SMEs in both 
manufacturing and services sectors. In order to en courage self employment and better distribution of 
wealth, the Government is committed to pr ovide conducive business environment to nurture 
entrepreneurship.  
TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
One stop website for laws and regulations 
252. As part of enhancing transparency, and dissemi nating regular information, the Government is 
taking steps to make available all major trade-re lated laws which can be found at www.agc.gov.my.  
FTAs 
253. The Discussant had inquired on how Malaysia’s FTAs complement the WTO. As indicated 
by New Zealand, in their intervention on the first day, the FTA with Malaysia is comprehensive and 
of high quality and WTO consistent.  
254. The scope and depth of commitments of most FTAs go beyond the WTO and cover 
elimination of more than 90% of trade. In additi on, these FTAs have not created any restrictions to 
third parties. 
TRADE POLICY AND PRACTICES 
Customs Rulings and Customs Valuation  
255. There was a question concerning the introduction of advance ruling on customs classification 
and valuation. As highlighted in the Secretariat re port, the advance ruling is to provide certainty and 
speedy clearance of goods. In general, traders need to  only submit a complete written application with 
a minimal processing fee of RM200 (USD58). The advan ce ruling remains valid for up to three years. 
Tariffs 
256. Some Members raised questions regarding the non- ad valorem  duties maintained by Malaysia 
especially on agriculture products. Mala ysia is currently reviewing the non- ad valorem  duties in the 
on-going Doha Round negotiations. WT/TPR/M/225 
Page 36  
 
  257. Some Members also raised questions on the gap between Malaysia’s simple average applied 
MFN tariff of 7.4% and average bound level of 15.6%. Ma laysia was able to bind 80% of its tariffs in 
the Uruguay Round due to the ceiling bindings allowe d for developing countries and this explains 
why there is a gap between the simple average and the binding le vel. Autonomous or unilateral 
liberalization by Malaysia over the years has also ca used the applied rates to be lower than the bound 
rates. Under the Doha Round, Malaysia’s commitmen ts are expected to reduce the gap between the 
applied and the bound rates.   
TRQs 
258. A number of Members raised their concerns on Tariff Rate Quotas (TRQs) implementation.  
We would like to clarify that under the Urugua y Round, Malaysia had submitted a schedule that 
contains a total of 73 tariff lines that would be  subject to TRQs. Malaysia however had not 
implemented them and only beginning 1 April 2008 , TRQs were imposed on 18 tariff lines of crops 
and livestock products. Malaysia currently do es not have any plans to lift these TRQs.  
259. Malaysia resorted to TRQs in order to assist domestic small scale farmers who are low 
income earners and highly dependent on livestock fa rming for their livelihood. The influx of these 
products would certainly affect their livelihood. 
Import Licensing  
260. Members also raised questions about Malays ia’s import licensing regime. I would like to 
inform that currently Malaysia maintains lim ited non-automatic import licensing requirement on 
selected items only, covering industrial, agriculture  and mineral products for the following reasons:  
SPS requirements;  TBT requirements;  Security; and Environment. 
261. For automobiles the non-automatic licensing w ill be phased-out by 2015 for used vehicles 
(open APs) and 2020 for new vehicles (franchise APs). 
Tax Incentives 
262. The Discussant is interested to hear Malaysia’s  opinion regarding the publication of estimates 
of tax revenue forgone.  
263. The tax revenue forgone for the direct and indir ect taxes is not published as there is no data 
on the actual incidence of taxes for all projects wh ich had enjoyed tax incentives. Tax exemptions are 
given upfront for a stipulated period based on app lications.  The granting of tax exemption is not 
based on the amount of potential revenue foregone, ra ther the overall contribution of the promoted 
project to the economic development. 
GLCs 
264. A number of Members raised the issue of  under performance of the GLCs. The GLC 
Transformation Programme was undertaken to e nhance GLCs performance. The transformation 
programme covered areas such as performance mana gement, leadership development, operational 
efficiency, regulatory management, capital ma nagement, board effectiveness and corporate 
responsibility. 
265. Since the launch of the programme in 2004, th e GLCs have made significant financial and 
operational improvements. From 2004 to 2007, aggregate net profit of 20 GLC companies grew 101% 
from RM9.6 billion to RM19.3 billion. Market ca pitalisation grew by 72% from RM159 billion in 
2004 to RM273 billion as at end of 2009.   WT/TPR/M/225 
 Page 37 
 
 
  SPS 
266. Some Members enquired about Malaysia’s SPS measures especially on poultry and pork 
products. Malaysia has conducted scientific risk as sessment on these products and allows for imports 
without discrimination, provided it complies with the OIE standards. In fact, Malaysia currently 
allows imports of pork products from Canada, USA and some of EU countries that meet the OIE 
standard requirements.  
267. On the issue of notifications, Malaysia has in the past notified all its SPS regulations and will 
continue to do so. 
Government Procurement 
268. Malaysia has adopted its procurement practi ces based on the principles of transparency, 
public accountability, value for money, fair dealing as well as open and fair competition.  This is also 
in line with UNCITRAL Model Law.  
269. Apart from that, efforts have been taken to  review the existing procurement rules and 
procedures from time to time with the objective of expediting the procurement processes and accelerate decision making by delegating more power to agencies. To date, ma ny initiatives have been 
put in place to improve the Government procur ement system and enhance transparency in 
Government procurement processes.  
270. Amongst the initiatives are procurement of supplies and services to be done online via e-
procurement system, and information on bidders to be  published in the procuring Agencies’ websites.  
271. Despite awarding tenders to local suppliers, the original source of these products are mainly 
imports, and these include high technology equipm ent, security surveillance equipment, ICT 
equipments and machinery.  
272. Malaysia is not a party to the WTO GPA as we  have yet to attain the level of economic 
development that would enable us to benefit from the agreement. 
Intellectual Property Rights (IPRs) 
273. Some Members have also raised questions on Malaysia’s IPR regime and enquired about the 
steps that have been taken to address enforcement of IPR laws in Malaysia. Malaysia’s intellectual 
property laws are in conformance with intern ational standards and is TRIPs consistent. 
274. We are now currently in the process of review ing and updating the IP laws. A comprehensive 
review covering scope and institu tional arrangement, enforcement, exceptions and limitations and 
associated regulations is being undertaken with a view to tightening laws and implementing a more 
effective regime. Towards this end, amendments to the copyright law to address internet services 
providers (ISP) to cooperate in a ddressing infringing activities by users on their networks is also being 
considered.  
275. The intellectual property laws in Malaysia have  also made available statutory provisions for 
owners of intellectual property to initiate actions  against persons who infringe their rights and seek 
remedies that are available. 
276. Some Members have also raised queries about the steps that have been taken to address 
enforcement of IPR laws in Malaysia.  WT/TPR/M/225 
Page 38  
 
  277. For the purpose of enforcement of counterfe it products, the Trade Descriptions Act 1972 
allows a proprietor or registered owner of a trad e mark, entitled to the protection of a trade mark, 
apply to the High Court when his rights have been infringed.  
278. An Optical Discs Special Unit under the Mini stry of Domestic Trade, Cooperatives and 
Consumerism undertakes enforcement activities to contro l piracy activities at source, i.e. licensed and 
unlicensed optical discs plants. An internet and Fo rensics Investigation Unit established also initiates 
enforcement activities to combat piracy at source. Th is unit also works closely with other international 
copyright organizations such as Motion Picture Association, Internati onal Federation of the 
Phonographic Industry, Business Software Alliance and Microsoft as well as other domestic agencies 
such as the Royal Malaysian Customs.  
279. The protection of IPR is an on-going process a nd the Government continuously intensifies 
efforts to enforce stringent border measures.  As reported previously, the Malaysian Government has 
approved the establishment of 15 IP courts, presided by a Intellectual Property Session Court Judge. To date, four are fully operational. In areas wher e other courts are not yet operation, IPR cases are 
heard by the Sessions Court Judges.   
280. Penal sanctions are imposed for offences under the various IPR laws. For example, under the 
Copyright Act 1987, a minimum fine of RM2,000 (US$580) and a maximum fine of RM20,000 (US$5,800) are imposed on each infringed copy or im prisonment for a term not exceeding 5 years or 
both, and the penalty is doubled for second or subsequent offences. 
281. As an indication, in 2008, a total of 1,94 2 cases were decided and total fines imposed 
amounted to RM20.7 million (US$6 million), while in  2009, a total of 902 cases were decided with 
fines imposed amounting to RM33.5 million (US$9.8 million).  
SECTORAL POLICIES 
Agriculture: Productivity in agric ulture and maintaining food security 
282. The discussant requested further information from Malaysia on the agriculture productivity 
and measures to maintain food security. The Govern ment has formulated the following strategies, 
inter alia :  upgrading, improvement, and development of drainage and irrigation infrastructure, farm 
mechanisation and estate farm management; increasing production and productivity on crops, 
livestock and fisheries subsectors through the Pe rmanent Food Production Park and Aquaculture 
Industrial Zone;  strengthening marketing and distribu tion of agriculture produce;  encouraging public 
to grow their own produce and rear fish or liv estock for their own consumption through green book 
campaign; and  maximum use of idle arable land areas.  
Automotive 
283. A number of Members have enquired on our au tomotive policy. Under the revised national 
automotive policy (NAP) 2009, an industrial adjustme nt fund scheme is available to all manufacturers 
and assemblers.  This scheme is given to prom ote the development of the automotive industry, 
particularly SME component manufacturers and to mitigate the adverse impact of market 
liberalization. 
284. Regarding the auto-scrapping scheme referred to  by some Members and in the Secretariat 
report, Malaysia would like to clarify that the sch eme was introduced as part of the stimulus package 
and has been abolished since November 2009.  WT/TPR/M/225 
 Page 39 
 
 
  285. On the issue of import licensing, as mentioned earlier the Government has decided to phase 
out the APs.  
Services 
286. We thank and take note of the support and sugg estions that have been made by Members 
regarding structural reforms and mark et opening in the services sector.  
287. As mentioned in our written response, the services sector is now the main engine of growth 
and the Government is promoting liberalization of the sector as a strategy to further develop this 
segment of the economy. 
288. With regard to further liberalization measures in  this sector, Malaysia is currently drawing up 
roadmaps for liberalization in various services sectors, including maritime, telecommunication and 
professional services. 
289. We noted Members were very encouraged by our financial services liberalization and 
Malaysia’s role in the development of Islamic fi nance as well as the expressed interest for further 
liberalization in the banking sector.  Going forward,  we will be guided by the new blueprint for the 
financial services sector that currently is being deve loped as the existing Financial Sector Master Plan 
enters its final phase this year.   
290. Malaysia continuously undertakes domestic cons ultations to improve conditions for foreign 
entry. The recent announcement of the deregulati on of the foreign investment committee (FIC), 
reflects our seriousness as well as a major step forward in services liberalization. 
CONCLUSION 
291. In summary, Malaysia is gradually recove ring from the global economic crisis as our 
manufacturing and exports performan ce have started showing signs of improvement. The medium 
term outlook remains promising a lthough it depends on the sustained global recovery as well as how 
effectively the private sector responds to the improving external conditions. The World Bank 
described the situation in Malaysia as mostly a “manufacturing for export crisis”. Given the 
importance of exports to the economy, which wa s 120% of GDP in 2009, the impact of negative 
exports growth need to be addressed th rough short and medium term measures. 
292. Malaysia’s economy remains fundamentally s ound with good economic infrastructure and 
responsive policies taken by the Government. As h as been reported earlier,  the resilience of the 
financial sector, level of international foreign reserve s, fiscal stimulus packages in the amount of more 
than 9% of the GDP including credit guarantee, have contributed to the recovery process. 
293. Additionally, more open and liberal trade a nd investment policies and measures, boosted 
confidence in the economy and stimulated domestic demand.  
294. Malaysia is fully aware that in responding to the global economic recovery, the Government 
needs to give greater emphasis on improving the trade and investment climate to stimulate private investment and to focus on productivity growth especially on total factor productivity, including innovation. The private sector investment which still have not fully recovered from the 97/98 Asian 
financial crisis need to be further revitalised. 
295. Implementing the various measures during this period is a difficult task and requires an 
integrated strategy to address the prevailing weaknesses in the economy.  WT/TPR/M/225 
Page 40  
 
  296. Malaysia is an open economy whic h depends on external trade and foreign direct investment 
to develop its exports, transfer of technology, human capital development as well as free movement of 
talent. In this regard, Malaysia is committed to  continue upholding th e rules-based and open 
multilateral trading system with transpar ent and predictable economic policy.  
297. Malaysia will continue to promote market -based economy with business-friendly and 
competitive environment. These policies and measures ar e also crucial for Malaysia in our efforts to 
promote entrepreneurship especially among the SM Es so that liberalisation will bring optimum 
benefits and provide economic and social stability to the country.  
DISCUSSANT 
Macroeconomic environment 
 
298. I am glad to learn from the Malaysian Delegati on that the economy is expected to achieve a 
higher-than- forecast growth of 5% this year, coupled with export rebo und of 3.5% and low 
unemployment rate of below 4%. This is largely due to the quick reaction of the Government in form 
of monetary policies, fiscal policies including two stimulus packages, and other policies to boost 
domestic demand, improve access to financing and enhance human capital development on the solid 
ground of its foreign exchange reserve s and debt situation. Malaysia h as been trying to take the crisis 
as an opportunity to restructure its economy so as to  make it more broad-based, namely to increase the 
share of the services sector in th e GDP, to increase the knowledge c ontent in growth and to reduce 
reliance on the exports of manufactured goods. This stra tegy is starting to have the desired effect of 
bringing Malaysia out of the recession. I thank th e Secretary General for sharing with us the focus 
areas of the proposed New Economic  Model. The efforts by Malays ia to expand domestic demand are 
particularly appreciated. And the efforts to promote SMEs in manufacture and services sectors are most welcome. 
Trade Policy Regime 
299. Despite the global financial and economic cris is, Malaysia did not impose any new trade 
restrictions. On the contrary, it took some aut onomous liberalization measures, especially in the 
services sector. This is highly commendable and has become a bright spot in the WTO monitoring 
report series. Moreover, Malaysia is committed to the multilateral trading system and the early conclusion of the Doha Round of negotiations. At last Friday’s annual overview meeting of the 
TPRB, the Director-General and quite a few member s raised concerns over the flood of RTAs and 
their possible impacts on the multilateral trading system . It’s good to know that as an active negotiator 
and participant of RTAs, Malaysia believes th at regional liberalization should only serve as 
complements to the multilateral trading system. 
300. With regard to some of the specific interests and concerns, I would like to draw Members’ 
attentions to the following statements by Malaysia, which I appreciate very much. 
301. On import licensing, Malaysia is currently reviewing the overall licensing regime and will 
gradually liberalize it based on the readiness of  the sector, taking into account the overall 
development objectives of the nation. 
302. On TRQs and tariffs, Malaysia does not have an y plan to lift the TRQs on the 18 agricultural 
tariff lines for the time being, in order to assist small farmers for their livelihood, but it will further 
review the unbound lines and increase the level of binding in the context of the Doha Round of 
negotiations.  WT/TPR/M/225 
 Page 41 
 
 
  303. On competition, the Competition Bill currently under drafting is targeted for completion by 
this year and is expected to be impl emented after a two-year advocacy period. 
304. On standards and standardization, Malaysia  will continue to put emphasis on adopting 
existing regional or international standards a nd will continue to notify all SPS regulations. 
305. On government procurement, I unde rstand Malaysia is not ready to join the GPA, but it is 
making efforts to ensure open and transpar ent procedures for government procurement. 
306. On intellectual property rights, I appreciate the statement by Malaysia that its intellectual 
property laws are in conformity with international standards and are TRIPS consistent. It is currently 
in the process of reviewing and updating the IP laws . Four IP courts are fully operational. Penal 
sanctions are imposed to offences under the various IPR laws. 
Sectoral Policies 
307. On agriculture, I appreciate the informati on on Malaysia’s measures to maintain food 
security. 
308. Policies and development in the services sector  have attracted the most attentions by 
Members. As stated by the Malaysian Delegation, the liberalization of the services sector aims to 
strengthen the competitiveness of domestic players, increase investment opportunities, create high 
income and knowledge-based jobs and foster grea ter innovation. Besides the 27 subsectors, the 
Government of Malaysia will also consider liber alizing other subsectors progressively, taking into 
account the overall development of these subsectors. Ma laysia has referred to roadmaps that are being 
developed for the liberalization of all services sect ors. We encourage Malaysia to adopt further 
liberalization measures. 
EUROPEAN UNION 
309. We would like to thank again Malaysia for thei r written replies to our advance questions. We 
have carefully looked at these replies but we have unfortunately found them rather evasive and vague, 
and which have not provided us with the detailed information we would have wished so. We fully 
understand the time constraints and difficulties in re plying a large number of questions within short 
time, but we also believe that the TPRM, as the mo st prominent tool of transparency within this 
house, should deliver useful and de tailed information for all Member s. We should all contribute to 
keep this mechanism useful and relevant, and shoul d not forget that the TPRM’s main objective is to 
help all us better understand one me mber’s trade policies, measures and objectives. Hence, we would 
like Malaysia to reflect on this.  
310. We will use thus the opportunity to submit follow up questions, in issues such as SPS, the 
automotive policy, and services.  In particular, we have noted that the replies on SPS matters are not 
satisfactory.  
311. For instance, we have a follow up question to  Q.24:  Malaysia indicated that import 
conditions for pork and pork products are already in line with OIE standards. In fact, today, in its oral 
response, Malaysia made this same statement. In view of this, could Malaysia thus confirm that it will 
change its import conditions and a llow imports of all pork and pork products, except when there is an 
animal health risk as described in  the Terrestrial Animal Health Code of OIE? If so, could Malaysia 
indicate when and how these import conditions will be changed? WT/TPR/M/225 
Page 42  
 
  312. Similarly, we have a follow up question to Q.27:  Malaysia’s notes that the import conditions 
for BSE are in line with OIE standards. In light of  this, could then Malaysia indicate when the BSE 
ban on EU Member States would be lifted and how it would be announced? 
313. We would like to reiterate the need to revi ew the import conditions for meat and meat 
products and to bring them in line w ith international standards, and if deviating from these, to provide 
the relevant risk-assessment based  on science, in compliance thus with Malaysia's obligations under 
the WTO SPS Agreement. We should not forget that  full alignment with international standards, 
guidelines and recommendations is essential to ensure that trade measures are transparent, fair and 
predictable.  These and other follow up question will  be now after this meeting submitted in writing.  
314. Finally, we would just like to recall what we already mentioned on Monday. A successful 
review is, in our view, the one that brings transp arency and additional clar ification and information 
about the Members under review’s trade policies and measures, and the one which genuinely leads to 
some reassessment and policy modification on the gr ound. Therefore, we hope that Malaysia will 
continue to move in the right direction in terms of  reform and liberalization, and reflect carefully on 
the remarks and observations raised during these two days of Review.  
UNITED STATES 
315. Regarding page 36, paragraph 51 of the S ecretariat Report, Malaysia has only noted 
“[c]ompanies located in FIZ and elsewhere in Ma laysia are eligible for tax incentives if they 
participate in promoted activities”.  Please provide th e name and explain the nature of this program, 
including the “promoted activities”.   Please discuss  whether there are eligibility differences between 
companies located in FIZs and companies located elsewhere. 
316. Regarding page 55, paragraph 30 of the Secret ariat Report and the income tax exemption for 
high value-added exports of motor vehicles and part s, please provide the name of this program and a 
reference to the enabling law or regulation.  Please also explain how the tax exemption is calculated. 
317. Regarding page, 46, paragraph 91 of the S ecretariat Report, we note that “public 
consultation” is available for Indus trial Design legislation.  Will “pub lic consultation” be available for 
copyright amendments? 
ECUADOR 
318. My delegation is one of tho se which submitted questions well in advance.  However, the 
document circulated by Malaysia did not appear to  contain answers to our questions.  We would be 
grateful if Malaysia could tell us when it will reply to our questions. 
MALAYSIA 
319. On the first question from the EU regardi ng transparency of some of our rules and 
regulations, as I have said this is in progress, we have to undertake a lot of consultations and the 
Government is well aware that transparency is a very  subjective issue, transparent in one aspect is not 
transparent from another angle but the Government will continue looking into this and we will reply 
to you in writing the progress of our work over the years.  On the issue raised pertaining to OIE 
standards, the Ministry of Agriculture will give details in writing.  
320. Regarding Ecuador we have forwarded our res ponses to the Secretariat but we will forward 
you the answers to your questions.  WT/TPR/M/225 
 Page 43 
 
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
321. The fifth Trade Policy Review of Malaysia h as enabled us to improve our understanding of 
recent developments in its trade and related po licies, and of the challenges it now faces.  Our 
discussion has clearly benefited from the active par ticipation of the Malays ian delegation, led by 
Mr Abdul Rahman Mamat, Secretary General, Ministry of International Trade and Industry, as well as 
from the thought-provoking and insightful contributio n of our discussant, Ambassador Sun Zhenyu of 
China, and the numerous interventions by Members.   Malaysia's response to the large number of 
questions is also very much appreciated. 
322. Members praised Malaysia's steady economic  growth between 2005 and 2008.  Although the 
economy contracted in 2009 due to the global fi nancial crisis, Members were pleased about the 
positive economic growth projected for 2010.  Member s recognized Malaysia's generally liberal trade 
regime, and noted that Malaysia has continued to liberalize its trade and related policies since its 
previous Review.  Members were encouraged that Ma laysia has resisted protectionism since the onset 
of the financial crisis in September 2008.    
323. Members were interested to know how Malaysia  will ensure stable growth of domestic 
demand, in order to reduce reliance on export-led gr owth, and how the authorities intend to promote 
the development of services and high-tech manufacturing, which they see as future growth engines of the economy.  Members welcomed Malaysia's relaxa tion of equity and other restrictions on foreign 
investment in services, and encouraged the authoriti es to consider further liberalization in its foreign 
investment regime.   
324. Members commended Malaysia on its active partic ipation in the multilateral trading system, 
including its support for the early conclusion of  the Doha Development Agenda.  Noting the 
importance Malaysia attaches to bilateral/regiona l trade agreements, some Members enquired about 
how Malaysia intends to ensure that these agre ements will be complementary to the multilateral 
trading system.  
325. Members applauded Malaysia's un ilateral reduction of its applied MFN tariff rates.  However, 
they expressed concern that a large number of tari ff lines are unbound, and a co nsiderable portion of 
the tariff lines is subject to import licensing, most  of which is non-automatic.  Some Members also 
expressed concern about Malaysia's export regulatio ns, noting that its export tax revenues are higher 
than import tax revenues.   
326. Members acknowledged Malaysia's efforts to alig n its national standards with international 
ones, and encouraged Malaysia to expedite the alig nment.  Clarification was sought with respect to 
the array of incentive programmes ac corded to some industries, as well as to the status of draft 
competition legislation.  Some Members were inte rested to know whether Malaysia has plans to 
review its policies on government procurement, w ith a view to providing more predictability and 
transparency.  Members appreciated Malaysia's co mmitment to enforce intellectual property rights, 
for example, by the establishment of IP courts. 
327. Recognizing a generally liberal trade regime in agriculture, Members expressed concern 
about some non- ad valorem  tariffs, which could conceal relatively high rates, and tariff rate quotas 
introduced in 2008 for some agricultural products.  Members noted that Malaysia's manufacturing 
sector is relatively open to both trade and investment , with the automobile sector a notable exception.  
Members were interested to know whether Malays ia has plans to open its automotive sector to 
competition.  Members noted Malaysia's aim of in creasing the share of services in GDP to 60% by 
2020, in an effort to establish a knowledge-based economy less reliant on manufactured exports.  
Some Members consider that further liberalization of  services and, thus, promotion of competition are 
needed to achieve this target.  WT/TPR/M/225 
Page 44  
 
  328. This successfully concludes our fifth Review of Malaysia.  The large number of advance 
questions and the many interventions indicate the impor tant role Malaysia plays at the WTO.  I would 
once again like to thank the Malaysian delegation for their efforts, the di scussant for his comments, 
and Members for contributing to what has been a very enlightening two days of discussions. 
__________