RESTRICTED  
  
WT/TPR/G/436  
14 December  2022 
(22-9126) Page: 1/39 
Trade Policy Review Body   Original: English  
 
TRADE POLICY REVIEW  
REPORT BY  
MALAYSIA  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex  3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by Malaysia  
is attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Malaysia . WT/TPR/G/436 • Malaysia  
 
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  Contents  
1  INTRODUCTION  ................................ ................................ ................................ ...........  4 
2  ECONOMIC  DEVELOPMENT  ................................ ................................ ...........................  4 
2.1  Overview  ................................ ................................ ................................ .....................  4 
2.2  Sectoral Performance  ................................ ................................ ................................ .... 4 
2.3  Economic Development Plans  ................................ ................................ .........................  6 
2.3.1   Twelfth Malaysia Plan  ................................ ................................ ................................ . 6 
2.3.2   Strengthening Infrastructure and Connectivity  ................................ ..............................  7 
2.3.3   Digital Economy  ................................ ................................ ................................ ........  9 
2.3.4   National Fourth Industrial Revolution Policy ................................ ................................ . 12 
2.4  Tax Policy  ................................ ................................ ................................ ..................  13 
2.4.1   Sales Tax and Services Tax  ................................ ................................ .......................  13 
2.4.2   Tourism Tax  ................................ ................................ ................................ ............  13 
2.5  Labour and Minimum Wage Policy  ................................ ................................ .................  14 
2.5.1   Ratification of the International Labour Organization (ILO) Protocol of 2014  ....................  14 
2.5.2   Amendments to Employment Acts 1955 and Children and Young Persons (Employment)  
Act 1966  ................................ ................................ ................................ ..........................  14 
2.5.3   Employees' Minimum Standards of Housing and Amenities (Amendment) Act 2019  ..........  14 
2.5.4   Nationa l Action Plan on Forced Labour 2021 -2025 ................................ .......................  15 
2.5.5   Minimum Wage Policy ................................ ................................ ...............................  15 
3  TRADE  POLICY  DEVELOPMENTS  ................................ ................................ .................  15 
3.1  Overview  ................................ ................................ ................................ ...................  15 
3.2  Initiatives  to Facilitate  Trade  ................................ ................................ ........................  16 
3.2.1   Reviewing Non -Tariff Measures  ................................ ................................ ..................  16 
3.2.2   National Policy on Good Regulatory Practice  ................................ ................................  16 
3.2.3   Malaysia Productivity Blueprint  ................................ ................................ ..................  17 
3.2.4   Export Promotion Activities  ................................ ................................ .......................  17 
3.2.5   National Trade Blueprint  ................................ ................................ ...........................  18 
3.2.6   Promotion of Investments for Manufacturing and Services Sectors  ................................ . 18 
3.2.7   The New Investment Policy based on National Investment Aspirations  ............................  18 
3.2.8   SME Masterplan 2012 -2020 ................................ ................................ ......................  19 
3.2.9   National Entrepreneurship Policy 2030 ................................ ................................ ........  20 
3.2.10   Social Entrepreneurship Action Framework 2030  ................................ ........................  21 
3.3  Multilateral  Trading  System ................................ ................................ ..........................  21 
3.3.1   Overview  ................................ ................................ ................................ ................  21 
3.3.2   Malay sia's Involvement at the WTO ................................ ................................ ............  21 
3.4  Free Trade Agreements  ................................ ................................ ...............................  22 
3.4.1   Bilateral Agreements  ................................ ................................ ................................  22 
3.4.2   Regional Trade Agreements  ................................ ................................ ......................  23 
3.5  Association of Southeast Asian Nations (ASEAN)  ................................ ............................  23 
3.6  Asia Pacific  Economic  Cooperation (APEC)  ................................ ................................ ...... 24 WT/TPR/G/436 • Malaysia  
 
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  3.7  Belt and Road Initiative  ................................ ................................ ...............................  24 
4  CHALLENGES AND OPPORTUNITIES OF EXTERNAL ENVIRONMENT  ............................  25 
4.1  Overview  ................................ ................................ ................................ ...................  25 
4.2  COVID -19 Response Measures  ................................ ................................ .....................  25 
4.2.1   Public Health Response to COVID -19 ................................ ................................ ..........  25 
4.2.2   Economic Response to COVID -19 ................................ ................................ ...............  25 
4.2.3   COVID -19 Measures Related to Standards  ................................ ................................ .. 26 
4.3  Trade and Environment  ................................ ................................ ...............................  27 
4.3.1   Initiatives on Sustainable Palm Oil  ................................ ................................ .............  27 
4.3.2   Malaysia Plastics Sustainability Roadmap  ................................ ................................ .... 27 
4.3.3   National Mineral Industry Transformation Plan  ................................ .............................  28 
4.3.4   Policy on Forestry  ................................ ................................ ................................ .... 28 
4.3.5   Convention on International Trade in Endangered Species of Wild Fauna and Flora  ..........  29 
4.3.6   Guidelines for Scrap Metal Importation  ................................ ................................ ....... 30 
5  SECTORAL POLICIES  ................................ ................................ ................................ .. 30 
5.1  Manufacturing Sector  ................................ ................................ ................................ .. 30 
5.1.1   Overview  ................................ ................................ ................................ ................  30 
5.1.2   New I ndustrial Master Plan 2030  ................................ ................................ ...............  30 
5.1.3   Industry 4.0  ................................ ................................ ................................ ............  31 
5.1.4   National Automotive Policy  ................................ ................................ ........................  31 
5.1.5   Aerospace Industry  ................................ ................................ ................................ .. 32 
5.2  Agriculture Sector  ................................ ................................ ................................ ....... 32 
5.2.1   Overview  ................................ ................................ ................................ ................  32 
5.2.2   National Agrofood Policy 2011 -2020 ................................ ................................ ...........  32 
5.2.3   National Agrofood Policy 2021 -2030 ................................ ................................ ...........  32 
5.3  Services Sector  ................................ ................................ ................................ ..........  33 
6  OTHER  DOMESTIC POLICIES  ................................ ................................ ......................  33 
6.1  Companies Act 2016  ................................ ................................ ................................ ... 33 
6.2  Competition Act 2010  ................................ ................................ ................................ . 34 
6.3  Protection of Intellectual Property Rights  ................................ ................................ ....... 34 
6.4  Development of Halal Industry  ................................ ................................ .....................  35 
6.5  National Tourism Policy  ................................ ................................ ...............................  35 
6.6  National Policy on Science, Technology and Innovation 2021 -2030 ................................ ... 36 
6.7  10-10 Malaysian Science, Technology, Innovation and Economy Framework  ......................  36 
6.8  National Nanotechnology Policy and Strategy 2021 -2030 ................................ .................  36 
6.9  National Policy on Biological Diversity 2016 -2025 ................................ ...........................  37 
6.10  Women and Youth Empowerment  ................................ ................................ ...............  37 
6.11  National Anti -Corruption Plan 2019 -2023 ................................ ................................ ..... 37 
6.12  Standards and Conformance  ................................ ................................ ......................  38 
7  WAY FORWARD  ................................ ................................ ................................ ..........  38 
  WT/TPR/G/436 • Malaysia  
 
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  1  INTRODUCTION  
1.1.  This is Malaysia 's Eighth Trade Policy Review at the World Trade Organization (WTO). It marks 
the 28th year of Malaysia embracing openness to trade and investment through her membership in 
the WTO, which has been instrumental in employment creation and income growth of the country. 
Malaysia remains committed to keeping her markets open and supporting businesses, de spite the 
challenging economic landscape in recent years.  
1.2.  During the period under review (2017 -2022), Malaysia 's trade policies has been anchored on 
the priorities outlined in the Eleventh Malaysia Plan (2016 -2020)  and the Twelfth Malaysia Plan 
(2021 -2025) . These include accelerating technology adoption and innovation, enhancing 
connectivity and transport infrastructure, and improving the standard of living to achieve a balanced 
and sustainable growth. These priorities are more crucial for ensuring Malaysia 's economic trajectory 
post-pandemic.  
2  ECONOMIC  DEVELOPMENT  
2.1  Overview  
2.1.  The Malaysian economy was on its targeted growth trajectory, expanding by 4.6% over the 
period 2018 -2019 mainly driven by strong private consumption and net exports. In 2020, Malaysia 's 
GDP contracted by 5.6% (2019: 4.3%) following the outbreak of COVID -19 pandemic. However, the 
economy continued to expand by 3.1% in 2021 due to improving domestic demand and robust 
exports performance.  
2.2.  During the period of 2018 -2021, the Malaysian economy recorded an average GDP growth of 
1.6%. The net foreign direct investment (FDI) grew by 4.5% per annum during the same period. In 
addition, the per capita Gross National Income (GNI) of Malaysia increased to USD  11,066 in 2021 
compared to USD  10,134 in the  previous year. The economy is expected to accelerate further by 
5.3%~6.3% in 2022, with growth to be underpinned by stronger external demand and higher private 
and public expenditure.  
2.3.  The inflation rate increased marginally by 0.7% per annum during the 2 018-2021 period. 
Growth was affected by the negative inflation of 1.2% in 2020 following lower pump prices and the 
implementation of the tiered electricity tariff rebate beginning April  2020. However, the inflation rate 
rebounded at 2.5% in 2021, driven ma inly by the base effects from the lower fuel prices in 2020.  
2.4.  As the global economy recovers, inflation is projected to rise in 2022, averaging between 2.2% 
to 3.2%. This is driven by the sustained demand pressures in an environment of higher energy and 
commodity prices as well as ongoing disruptions in the global supply chain.  
2.2  Sectoral Performance  
2.5.  On the supply side, the services and manufacturing sectors continued to be the main drivers 
of economic growth during the 2018 -2021 period. The services sector g rew by 2.2%, mainly driven 
by wholesale and retail trade, finance and insurance, as well as information and communication 
services subsectors. The manufacturing sector expanded by 3.8% due to robust demand for 
electrical and electronics products. Meanwhile , the agriculture and mining & quarrying sectors 
contracted by -0.1% and -3.3%, respectively.  
Table 2.1 Real GDP by Kind of Economic Activity (2015=100), Annual Change, %  
Sector  2018 -2021  2022a 
Agriculture  -0.1 1.5 
Mining & quarrying  -3.3 2.5 
Construction  -5.4 6.1 
Manufacturing  3.8 5.2 
Services  2.2 6.9 
GDP 1.6  5.3 – 6.3 
a Projection  for 2022 .  
Source:  Department of Statistics Malaysia (DOSM) and Bank Negara Annual Report  2021. WT/TPR/G/436 • Malaysia  
 
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  2.6.  The decline in the agriculture sector could be attributed to weaker palm oil production while 
the performance of mining & quarrying sector was weighed down by facility closures for maintenance 
purposes. Similarly, the construction sector contracted by 5.4% dur ing the same period.  
2.7.  Consistent with the anticipation of a stronger economic recovery in 2022, all economic sectors 
are projected to expand further, predominantly driven by the services, manufacturing and 
construction sectors.  
2.8.  The services sector registered an average growth of 3.2% for the period 2017 to 2021. The 
services sector continued to account for the largest share of GDP, accounting for 57% of the GDP 
in 2021. The sector remains on track to meet the targeted goal of 58.3% set under the 
Twelfth Malaysia Plan . 
2.9.  The manufacturing sector was impacted badly by the COVID -19 pandemic in 2020, and 
contracted 2.6% mainly by a downward performance in refined petroleum, chemicals and chemical 
products, non -metallic mineral products, basic metal, fabric ated metal and motor vehicles & 
transport equipment. As the COVID -19 restrictions was eased and manufacturing activities resumed, 
backed by the country 's pragmatic and agile policies, the overall performance of the manufacturing 
sector improved significant ly in 2021 compared to 2020, growing by 14.9%.  
2.10.   During the period from 2016 -2020, the agriculture sector's Gross Domestic Product (GDP) 
contribution remained stable between 6% and 8% with a compound annual growth rate (CAGR) of 
1.93% while the total produc tion value was at MYR 107.3  billion  in 2020. The major share of this 
contribution came from the oil palm (37.1%), other agriculture (27.9%), livestock (16.1%), fishery 
(11.2%), forestry and logging (5.2%), and rubber (2.5%).  
2.11.   Palm oil contributed MYR 45 billion to GDP in 2021. This accounts for 3.2% of GDP. 
Nevertheless, palm oil sector recorded a decline of 6.9% in 2021 compared to 2020 . Palm oil export 
in 2021 expanded remarkably by 48% to MYR 108.5  billion  compared to MYR 73.3 billion  in 2020.  
2.12.   The constr uction sector contracted marginally by 0.1% due to reduced construction activity 
during the period of the Eleventh Malaysia Plan. In 2020, the last year of the Eleventh Malaysia  Plan, 
construction sector growth contracted to 19.4%. It is due  to the impleme ntation of MCO and strict 
standard operating procedures (SOP) to all economic sector to control the spread of COVID -19 
pandemic. The construction sector contracted at a smaller pace of 5.2% in 2021 due to better 
performance of all sub -sector.  
2.13.   The year -over-year (y -o-y) mineral production value growth for the period of 2018 to 2021 
for mines and quarries were at -13.9%, 13.4%, -21.7%, and 2.6%; valued at MYR 6.0 billion , 
MYR 6.8 billion , MYR 5.3 billion  and MYR 5.4 billion , respectively. The COVID -19 pandemi c has 
caused the growth to plunge by 19.2%  in 2020 and 17.1% in 2021, compared to the three -years 
average pre -pandemic. In 2021, a slight increase of 5.2% y -o-y growth were recorded, contributed 
by the recovery in energy (coal) and non -metallic minerals pr oductions as compared to the previous 
year when the COVID -19 pandemic started.  
2.14.   The mining sector registered a contraction of -1.0% in 2017, -2.6% in 2018, and -2.0% 
in 2019, as crude oil output was weighed down mainly by maintenance works and voluntary su pply 
adjustments by PETRONAS. In 2020, the sector recorded a continued contraction in growth of 10.6% 
as crude oil and natural gas production were impacted by maintenance closures and weak external 
demand for commodities. In 2021, it improved and registere d its first positive growth of 0.7% 
since 2017, mainly attributed to the gradual recovery in global oil demand and new output from the 
PETRONAS Floating Liquefied Natural Gas Two (PFLNG2) facility located in offshore East Malaysia.  
2.15.   Malaysia recorded a higher current account of the balance of payments surplus in 2021 at 
MYR 53.5 billion  or 3.5% of GDP compared to MYR 38.3 billion  or 2.8% of GDP in 2017. This is 
attributed to the sizeable surplus in the goods account, which more than o ffset the continued deficit 
in the services and income accounts. During the 2018 -2021 period, gross exports grew by 7.3% per 
annum, mainly supported by manufactured goods, which accounted for 86.1% of total exports 
in 2021. Gross imports expanded at an ave rage annual rate of 4.2% driven by intermediate and 
consumption goods as well as re -exports during the same period. The deficit in the services account 
reflected continued net payments for transportation, professional and technical services as well as WT/TPR/G/436 • Malaysia  
 
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  intellectual property. The travel account recorded a deficit in 2020 and 2021, particularly due to the 
international travel restrictions following the COVID -19 pandemic. In addition, the income accounts 
remained in deficit following continued repatriation of p rofits and dividends by foreign investors as 
well as outward remittances by foreign workers in Malaysia.  
2.16.   Malaysia 's labour force has increased from 15.3  million  persons in 2018 to 15.8  million  
persons in 2021 while the number of employed persons has increa sed from 14.8  million  in 2018 to 
15.1 million  in 2021. The increment was relatively small as the labour market has been impacted by 
the COVID -19 pandemic. The unemployment rate remained low at 3.3% in 2018 and 2019 but 
increased to 4.5% and 4.6% in 2020 an d 2021, respectively. The highest unemployment rate was 
recorded in May 2020 when it hit 5.3%. The unemployment rate has declined to 3.8% in June  2022, 
the lowest since the COVID -19 pandemic hit the country. The three main contributors of 
employment  in 202 1 were services sector (61.1%), manufacturing sector (17.1%) and agriculture 
sector (12.3%).  
2.17.   The current account is expected to register a higher surplus in 2022 at 4.2%~4.7% of GDP, 
driven by the goods account surplus amid continued strength in external d emand and higher 
commodity prices.  
2.18.   The international reserves of Bank Negara Malaysia amounted to USD  109.2  billion  as of 
15 June 2022. The reserves position is sufficient to finance 5.5 months of imports of goods and 
services and is 1.1  times the total sh ort-term external debt.  
2.19.   During the 2018 -2021 period, private investment recorded an average growth of -1.1%. The 
net FDI grew by 4.5% per annum during the same period. Private investment is expected to increase 
further by 5.3% in 2022, supported by the im plementation of new and ongoing investment projects.  
2.20.   During the 2018 -2021 period, private consumption expenditure recorded an average growth 
of 3.2%. In 2022, private consumption is expected to increase by 9.0%, underpinned by stronger 
domestic and externa l demand as well as stable employment conditions.  
2.21.   Gross national savings (GNS) averaged 25.9% of GNI in 2018 -2021. In 2022, Gross national 
savings is expected to record 23.8% of GNI.  
2.3  Economic Development Plans  
2.3.1   Twelfth Malaysia Plan  
2.22.   The Twelfth Malaysia Pla n, 2021 -2025 is anchored on three key themes focusing on resetting 
the economy, strengthening security, improving wellbeing and inclusivity as well as advancing 
sustainability. These themes are supported by four catalytic policy enablers focusing on develo ping 
future talent, accelerating technology adoption and innovation, enhancing connectivity and transport 
infrastructure as well as strengthening the public service, paving the way for a prosperous, inclusive 
and sustainable nation.  
2.23.   In line with the trans formative nature of the Twelfth Malaysia Plan , 14 game changers that 
represent the new and innovative ideas were introduced to shift mindsets and fundamentally change 
the approach of the national development. These game changers will ensure Malaysia attain s the 
targets of the Twelfth Malaysia Plan . WT/TPR/G/436 • Malaysia  
 
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  Graph  2.1 The Twelfth Malaysia Plan  
 
 
2.24.   In tandem with the objectives to achieve balanced development and a people -centric 
economy, greater efforts will be undertaken to achieve the eight multidimensional goals of the 
Twelfth Malaysia Plan . Eight strategies will be implemented to restore growth and strengthen 
economic fundamentals. These goals encompass macroeconomic targets as well as socioeconomic 
goals to balance economic growth, equitable income distribution and wellbeing of the people. The 
multidimensional goals of the Twelfth Malaysia Plan  are as follows:  
i. GDP growth is targeted between 4.5 and 5.5% per annum during the Plan period;  
ii. estimated average monthly household income at MYR 10,065 by 2025;  
iii. the gap in GDP per capita between the Central and Sabah regions to be reduced to 1:2.5;  
iv. reductio n in greenhouse gas (GHG) emissions intensity to GDP by 45% by 2030 based on 
emissions intensity in 2005;  
v. GNI per capita is expected to reach MYR 57,882 in 2025;  
vi. share of compensation of employees is targeted to reach 40% of GDP by 2025;  
vii. labour productivit y growth is targeted at 3.6% per annum; and  
viii. the Malaysian Well -being Index (MyWI) is targeted to increase by 1.2% per annum.  
2.3.2   Strengthening Infrastructure and Connectivity  
2.25.   Transport infrastructure is central to economic and social development with its function to 
improve mobility of people and goods and also as key drivers of our nation 's growth in moving 
towards becoming a developed nation. In the Eleventh Malaysia Plan , the government placed strong 
emphasis on the development of transport infrastructu re, namely urban rail, intercity rail, road, 
airport and ports to serve the need of the people and the industries. The enhancement of the 
transport system has resulted in better quality transport and logistic services including improved 
public transport ut ilization.  
WT/TPR/G/436 • Malaysia  
 
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  2.26.   Malaysia aims to become a transport and logistics hub in the region by 2025. Appropriate 
initiatives will also be introduced to enhance the competitiveness of the transport and logistics 
sectors. The adaptation of a multimodal cargo movement approach will be introduced to enhance 
logistics services capability and reduce the cost of distribution. In addition, a national warehouse 
regulation will be developed to ensure uniformity in warehouse development. The orderly 
development of ware houses will open up opportunities for Malaysia to be ASEAN 's distribution 
centre, particularly for goods purchased online and courier services.  
2.27.   The development of the National Transport Policy (NTP) and the Highway Network 
Development Plan (HNDP) 2030 aims  to streamline the fragmented transport initiatives among 
Federal and state governments, to ensure effective and efficient use of resources to provide seamless 
movement of people and goods, thus contributing to economic expansion and prosperity.  
2.28.   Priority w ill also be given to the construction of roads, connecting villages as well as linking 
villages with the nearest towns. Under the Eleventh Malaysia Plan , 3,000  km of paved roads were 
planned to be constructed. The linkage between rural and urban areas will  be strengthened by 
improving connectivity and mobility to foster greater economic integration. For instance, the Pan -
Borneo Highway is expected to promote better connectivity for movement of people, goods and 
services in Sabah and Sarawak.  
2.29.   Connectivity ac ross regions will be enhanced through the development of transport 
infrastructure to serve the needs of the people and the industries. Rail and road networks will also 
be integrated to provide better connectivity between airports, ports, industrial areas, and cities in 
promoting growth and mobility as well as providing economic opportunities. Projects such as the 
Central Spine Road (CSR), Kota Bharu -Kuala Krai (KBKK) Highway and West Coast Expressway 
(WCE) which are currently under construction will provide  better connectivity in the eastern and 
western corridor of Peninsular Malaysia. The Pan -Borneo Sabah Highway and the Pan -Borneo 
Sarawak Highway will improve accessibility and connectivity in Sabah and Sarawak.  
2.30.   Major rail projects, namely the Electrified D ouble Track Gemas -Johor Bahru (GJB) and East 
Coast Rail Link (ECRL) will reduce travel time, increase land public transport ridership, air passenger 
and cargo movement. The ECRL, with a 665  km trail that connects several townships between Klang 
Valley and the East Coast, would be a game -changer for the east coast corridor of Malaysia. The 
ECRL project would create new areas for developments along the new route where small businesses 
and tourism can flourish. The project is expected to be completed by the en d of 2026.  
2.31.   Efforts are also undertaken to facilitate the shift in the mode of cargo transport from road to 
rail, in delivering cargo to and from hinterland to ports. Projects such as the Klang Valley Double 
Track Project (KVDT) Phase 1 from Rawang to Salak  Selatan and KVDT Phase 2 from Salak Selatan 
to Seremban and Simpang Pelabuhan Klang to Pelabuhan Klang are expected to increase the 
transportation of cargo via rail.  
2.32.   To enhance urban transportation efficiency, t he Government  has approved the 
implementatio n of the MRT3 Circle Line. MRT3  Circle Line will have a circular alignment running 
along the perimeter of Kuala Lumpur City at 50.8  km in length and 33 operational stations, of which 
26 are elevated and 7 underground. Constructions are expected to begin in  early 2023, while 
operations for the first phase is expected to commence in 2028 and completion target has been set 
as 2030.  
2.33.   In terms of air transport, the efficiency and effectiveness of the aviation industry will be 
continuously improved through upgrad ing of the airport infrastructure and improving system to 
enhance capacity of airport services and aircraft. The installation of the simple approach light system 
for Kuching international Airport, the completion of the new Kuala Lumpur Airport Traffic Cont rol 
Centre, the construction of a new Mukah airport in Sarawak, the upgrading of the Air Traffic 
Management System in Kota Kinabalu Flight Information Region and the upgrading of Sandakan 
Airport in Sabah will further increase the efficiency of airport ser vices and air traffic management.  
2.34.   Malaysia will also continue to enhance connectivity and safety of Rural Air Services (RAS) by 
improving Short Take -Off and Landing Airports (STOLports).  WT/TPR/G/436 • Malaysia  
 
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  2.3.3   Digital Economy  
2.35.   Malaysia 's digital economy has contributed MYR 310 billion or 22.6% of the country 's GDP 
in 2020, registering a double -digit growth of 10.4% compared to the 7.3% in the previous year.  
2.36.   During the period under review, Malaysia has introduced and implemented medium - and long -
term development plans namely the E leventh Malaysia Plan , Twelfth Malaysia Plan  and Malaysia 
Digital Economy Blueprint in moving towards digital economy. Among the strategies and initiatives 
on digital economy, digital inclusion, infrastructure, governance and security were outlined in the 
strategic plans. Highlights of the digital agenda are as follows:  
i. Malaysia Digital Economy Blueprint;  
ii. Digital Infrastructure;  
iii. Digital Inclusion;  
iv. Cyber Security;  
v. Digital Governance;  
vi. National E -Commerce Strategic Roadmap 2.0;  
vii. Start-up Ecosystem Roadmap; and  
viii. Cross -Border Data for Trade Facilitation.  
Malaysia Digital Economy Blueprint  
2.37.   The Malaysia Digital Economy Blueprint was introduced in February 2021 to transform 
Malaysia into a digitally -driven and high -income nation and ultimately become a re gional leader in 
digital economy. The Blueprint is aligned with the digital initiatives under the Twelfth Malaysia Plan. 
Through the Blueprint, Malaysia defines digital economy as economic and social activities that 
involve the production and use of digita l technology by individuals, businesses and government.  
2.38.   The Blueprint also outlines strategies and initiatives to achieve an inclusive, responsible as 
well as sustainable development. The Blueprint sets out six thrusts to steer the national digital 
initiatives, namely:  
i. drive digital transformation in the public sector;  
ii. boost economic competitiveness through digitali zation;  
iii. build enabling digital infrastructure;  
iv. build agile and competent digital talent;  
v. create an inclusive digital society; and  
vi. build a trusted, secure and ethical digital environment.  
Malaysia Digital  
2.39.   On 4 July 2022, the Communications and Multimedia Ministry together with Malaysia Digital 
Economy Corporation (MDEC), Malaysia 's lead digital economy agency, have launched Malaysia 
Digital ( MD), a national strategic initiative by the government to encourage and attract companies, 
talent and investment while enabling Malaysian businesses and the people to play a leading part in 
the global digital economy.  WT/TPR/G/436 • Malaysia  
 
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  2.40.   The MD initiative is set to succeed MS C Malaysia, which has served to transform Malaysia into 
a knowledge -based economy since 1996. Prepensed with a new and enhanced framework, MD seeks 
to transform the nation 's digital capabilities and boost the digital economy via the introduction and 
execut ion of various MD Catalytic Programmes (PEMANGKIN). The Government have introduced two 
initial PEMANGKIN projects namely:  
i. DE Rantau, a programme to establish Malaysia as the preferred Digital Nomad Hub in a 
bid to boost digital adoption and to promote digi tal professional mobility and tourism 
across the country; and  
ii. Digital Trade, to drive interoperability and greater harmoni zation of standards and 
regulatory approaches as well as to facilitate trade within and across borders.  
Digital Infrastructure  
2.41.   In line with the Malaysia Digital Economy Blueprint, a targeted programme to further enable 
digital infrastructure known as the National Digital Network Plan (JENDELA) was established in 
collaboration with industries to increase broadband connectivity throug hout the nation. JENDELA 
was formulated to provide wider coverage and better quality of broadband experience to the people. 
JENDELA is being implemented in two phases from 2020 to 2025, with the aims of achieving 100% 
internet coverage in populated areas, wider 5G coverage, average speed of 100 Mbps for mobile 
broadband and nine  million  premises passed with gigabit broadband service.  
2.42.   4,323 points of presence (PoP) will be developed in the rural areas to equip government 
premises, housing and commercial area s with quality broadband connectivity. In addition, as of 
Q3 2022, a total of 1 ,416 new sites for digital infrastructures have been constructed in urban and 
suburban areas to provide better 4G broadband experience. For the rural and remote areas, satellite  
broadband wireless access has been deployed at 839 locations throughout the country. Apart from 
that, 1,661 new 4G sites are currently being developed across Malaysia to extend the mobile 4G 
coverage.  
2.43.   The JENDELA Map, which is accessible to public, allows  consumers to check the network 
coverage and speed in their area, submit feedback, as well as request new services from the 
respective Service Providers. JENDELA Map can be accessed at via https://jendela.my/ , while the 
progress report on JENDELA can be accessed via https://myjendela.my/ . 
Digital Inclusion  
2.44.   The Government focuses on digital programmes to narrow digital divide within the society 
including in the rural areas . Efforts wer e undertaken to enable all segments of the society will have 
equal opportunities with necessary knowledge and skill sets to thrive in the digital economy. Apart 
from digital programmes, Malaysia has also gazetted the telecommunication services as a public 
utility in ensuring access to telecommunication services for every individual.  
Cyber Security  
2.45.   The National Cyber Security Agency (NACSA) launched Malaysia Cyber Security Strategy 
2020–2024 (MCSS) to govern cybersecurity planning and implementation. MCSS a ims to have a 
secure, trusted  and resilient cyberspace. While advancing  the economy and wellbeing, its mission is 
to fortify the local capabilities to predict, detect, deter and respond immediately to cyber threats. 
MCSS introduces the "Whole -of-Nation App roach " concept where everyone is included in the national 
cybersecurity agenda, through structured governance, competent talent, best practices and effective 
technology.  
2.46.   Malaysia is ranked 5th for Global Cybersecurity Index (GCI) 2020 with the score 98.06 . The 
GCI was established by the International Telecommunication Union (ITU) to measure the 
cybersecurity commitment of 193 ITU member states and Palestine. The goal is to assist member 
states in identifying areas for improvement and encouraging countries on cybersecurity awareness. 
Malaysia has been consistently ranked among the top 10 countries in the world for GCI since 2014 
and second in the Asia Pacific.  WT/TPR/G/436 • Malaysia  
 
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  Digital Governance  
2.47.   In enhancing Malaysia 's digital governance, the Government launched the Public S ector 
Digitalisation Strategic Plan (PSDSP) 2021 -2025. The strategic plan for public sector is aligned with 
the Twelfth Malaysia Plan , Malaysia Digital Economy Blueprint, National Fourth Industrial Revolution 
Policy as well as the UN Sustainable Developmen t Goals 2030 (SDG 2030). Specific targets set in 
the PSDSP are designed to ensure 100% digital literacy among civil servants, 80% end -to-end online 
services and option for cashless payments in all ministries and agencies.  
National E -Commerce Strategic Roadmap 2.0  
2.48.   Malaysia 's e-commerce has grown tremendously in the past five years. Malaysia 's e-
commerce contribution to GDP in 2021 was recorded at 13% compared to 11.6% in 2020. Gross 
value added of e -commerce to GDP increased to MYR 201.1  billion from MYR 163.8  billion  in 2020, 
an increase of 22.7% in 2021 compared to the 26.7% growth in 2020.  
Graph  2.2 Gross value added on e -commerce to GDP  
 
 
2.49.   Recogni zing the critical role of e -commerce in accelerating the growth of the digital economy 
in Malaysia, the National E -Commerce Strategic Roadmap (NESR) was launched in 2016 as a 
collaborative approach between the public and private sector. The Roadmap has transformed the 
landscape of e -commerce in Malaysia from a nascent stage into an ecosystem which is accessible 
and adopted by businesses as well as consumers.  
2.50.   With NESR 2016 -2020, 489,000 SMEs (including registered businesses and individuals in 
informal sectors) have adopted e -commerce while 378,00 0 SMEs have been trained in e -commerce 
through the various programmes and activities. NESR 2016 -2020 has also recorded investment 
worth MYR 1.5 billion  (USD  365 million ) in the establishment of regional e -fulfilment hubs.  
2.51.   The Government continues the momen tum in growing the e -commerce ecosystem in Malaysia 
into the next phase, by implementing the NESR 2.0 for the period from 2021 to 2025 as a key 
component of Malaysia Digital Economy Blueprint. The NESR 2.0 sets the strategic direction and 
provides a holist ic and coordinated approach at the national level in formulating and implementing 
relevant interventions towards ensuring a more inclusive outcome by aligning diverse stakeholders 
towards a common vision to make e -commerce as the engine for catalytic growt h for businesses in 
Malaysia. By year 2025, NESR 2.0 aspires to grow the e -commerce market size to reach 
MYR 1.65 trillion  and to empower 1,148,000 MSMEs in adopting e -commerce.  
Start-up Ecosystem Roadmap and MYStartup  
2.52.   Between 2008 and 2016, the start -up ecosystem contributed MYR 3.4 billion  to Malaysia 's 
GDP, and is projected to contribute MYR 30.8 billion  to the GDP by 2030.  
2.53.   To transform Malaysia into a top 20 global start -up ecosystem by 2030, the Government 
launched the Malaysian Start -up Ecosystem Roa dmap (SUPER) 2021 -2030 and the MYStartup 
platform. These will help Malaysia to reali ze its goal to create 5,000 start -ups, including five with 
WT/TPR/G/436 • Malaysia  
 
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  unicorn status by 2025. In order to achieve SUPER 's vision, the roadmap outlines strategies based 
on the ecosyste m drivers in funding, talent, innovation, policies and regulations, and market 
environment.  
2.54.   MYStartup as a digital information resource portal provides comprehensive facilitation services 
for start -up ecosystem networks.  It is designed to increase the nati on's GDP and to contribute to 
high-value job creation, as well as expanding deep technology investments by 2030.  
Cross -Border Data for Trade Facilitation  
2.55.   One of Malaysia 's key drivers to maintain trust in the digital environment and international 
trade is balancing  open data flows and data protection . The Digital Economy Blueprint has charted 
the pathway forward to increase public confidence in the management of personal data and data 
privacy in all trade agreements by incorporating cross border data protec tion. This has led to the 
development of National Data Sharing Policy in 2022 and the review of Malaysian Personal Data 
Protection Act (PDPA) to improve cross -border data transfer provisions and implementation 
mechanism by 2025.  
2.56.   The balance between open data flows and data protection will ensure seamless and secure 
international trade ecosystem in the transfer  of information across national borders. This enables 
Malaysian government agencies to transmit information for online transaction, track globa l supply 
chain, share research, provide digital cross border service and support technological innovation 
among countries.  
2.3.4   National Fourth Industrial Revolution Policy  
2.57.   The National Fourth Industrial Revolution (4IR) Policy launched on 1 July 2021 is a broa d, 
overarching national policy that drives coherence in transforming the socioeconomic development 
of the country through ethical use of 4IR technologies. It supports national development policies 
such as the Twelfth Malaysia Plan . It also complements the Malaysia Digital Economy Blueprint in 
driving the growth of digital economy. The policy outlines key focus areas which impact the people, 
business and government, in order to seize growth opportunities and to address potential risks 
arising from 4IR.  
2.58.   The National 4IR Policy provides key guiding principles and strategic direction in harnessing 
the 4IR for the country 's development and mitigating associated risks through resource optimi zation. 
In line with the national agenda, the policy intends to achieve a balanced, responsible and 
sustainable growth, measured by two key aspects, i.e. economic growth (namely productivity, 
innovation and technology) and social wellbeing (namely social connection, environment 
preservation and family institutions). Hence, the t hree main objectives of the policy are seizing 
growth opportunities arising from the 4IR, creating a conducive ecosystem to cope with the 4IR and 
building trust in an inclusive digital society.  
2.59.   The National 4IR Policy has outlined the following key policy thrusts:  
i. equip the people with 4IR knowledge and skill sets;  
ii. create  a connected nation through digital infrastructure development;  
iii. future -proof regulations to be agile with technological changes; and  
iv. accelerate 4IR technology innovation and adoption.  
2.60.   The p olicy thrusts are supported by 16 strategies and 32 national initiatives, targeting three 
key beneficiaries , namely society, businesses and government. Sixty sector -specific initiatives were 
identified across 10 key sectors, namely:  
i. wholesale and retail t rade;  
ii. transportation and logistics;  WT/TPR/G/436 • Malaysia  
 
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  iii. tourism;  
iv. finance and insurance;  
v. professional, scientific and technical services;  
vi. utilities;  
vii. education;  
viii. manufacturing;  
ix. healthcare; and  
x. agriculture.  
To mitigate potential social -related risks arising from the 4IR, elements of trust, cyber security as 
well as inclusivity and sustainability have been woven across the initiatives.  
 
2.61.   The National 4IR Policy is governed by the National Digital Economy and 4IR Council, chaired 
by the Prime Minister.  
2.4  Tax Policy  
2.4.1   Sales Tax an d Services Tax  
2.62.   The Government has reinstated the Sales Tax and Services Tax (SST), effective 
1 September  2018 to replace Goods and Services Tax (GST). SST comprises two independent taxes, 
governed by separate legislation, namely the Sales Tax Act 2018 and the Service Tax Act 2018. 
Whilst maintaining the salient features of the previous SST, the new SST incorporates enhancements 
to minimi ze the inherent weaknesses associated with SST and increase tax efficiency.  
2.63.   Sales tax is imposed on taxable goods manufact ured in Malaysia and on taxable goods 
imported into Malaysia. Sales tax is levied at 5% or 10% of the sale value depending on the types 
of taxable goods, except on petroleum products which are taxed at specific rates. However, the 
Government has decided to  exempt basic necessities and widely used items, especially by the lower 
income group and specific industries such as fresh foods, medicines, basic construction materials as 
well as motorcycles below 250cc.  
2.64.   A manufacturer is liable to be registered for sal es tax when the sales value of taxable goods 
manufactured exceeds the threshold of MYR 500,000.00 within 12 months or wage value for work 
performed on taxable goods by subcontract manufacturer exceeds MYR 500,000 within 12  months . 
2.65.   Service tax is imposed on  the provision of any taxable services in Malaysia at a standard rate 
of 6%. Service tax is also imposed on the importation of taxable services by businesses into Malaysia 
(business to business – B2B) from 1  January  2019, and on digital services (also know n as SToDS) 
from 1  January  2020.  
2.66.   For service tax, any person who provides taxable services and exceeds the prescribed value 
of taxable services for a period within 12 months is required to be registered. The threshold for 
service tax is MYR 500,000.00 exc ept for food & beverage sector whereby the threshold is set at 
MYR 1.5 million.  
2.4.2   Tourism Tax  
2.67.   Effective from 1  September  2017, a tourism tax is levied on tourists staying at any registered 
premises at a fixed rate of MYR 10.00 per room per night. Every opera tor who provides 
accommodation to a tourist shall collect the tourism tax on behalf of the Royal Malaysian Customs 
Department (RMCD).  WT/TPR/G/436 • Malaysia  
 
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  2.68.   The scope of tourism tax has been expanded to include accommodation premises reserved 
through online platforms by the Tour ism Tax (Amendment) Act 2021. Any person who provide digital 
platform services whether located in Malaysia or outside of Malaysia, is to register and charge the 
tourism tax on tourists who book their accommodations online.  
2.69.   Under the National Economic Reco very Plan (PENJANA) stimulus package, tourism tax has 
been fully exempted from 1  July 2020 to 30  June 2021 to help revive the tourism sector affected by 
the COVID -19 pandemic. The tourism tax exemption has been further extended until 
31 December  2022.  
2.5  Labour and Minimum Wage Policy  
2.5.1   Ratification of the International Labour Organization (ILO) Protocol of 2014  
2.70.   Malaysia  is highly reliant on foreign workers in labour -intensive sectors and industries. Thus, 
Malaysia has undertaken various initiatives to enhan ce the working environment by strengthening 
the workers ' right as well as addressing and eradicating forced labour issues in the country.  
2.71.   These initiatives include amendments to the labour laws; fostering strategic partnerships with 
the United  States  and the United Kingdom  to address forced labour issue; as well as the signing of 
the MOU on the Decent Work Country Programme (DWCP) with the ILO in 2019.  
2.72.   The DWCP has outlined the cooperation framework between Malaysia and the ILO until 2025 
which  includes th ree country priorities, namely rights at work, future of work and labour migration. 
Through DWCP, Malaysia has successfully established the inaugural National Action Plan on Forced 
Labour 2021 -2025 and is currently implementing it.  
2.73.   Malaysia has become the 58th country in the world and second in ASEAN to ratify the ILO 
Protocol of 2014 to the Forced Labour Convention on 21  March  2022. The ratification  has also made 
Malaysia the member of Alliance 8.7, as a Pathfinder country that could accelerate efforts towards 
achieving the 2030 Sustainable Development  Goal's Target 8.7 on eradicating forced labour, end 
modern slavery and human trafficking, and secure the prohibition and elimination of the worst forms 
of child labour. This ratificati on could also assist Malaysia in acquiring the necessary supports in 
improving the existing initiatives, especially matters pertaining to labour and human rights.  
2.5.2   Amendments to Employment Acts 1955 and Children and Young Persons 
(Employment) Act 1966  
2.74.   At do mestic level, Malaysia has amended multiple labour legislations and policies to protect 
the rights of the workers in order to comply with the ILO 's minimum requirement of the international 
standards and practices. These amendments are also part of the Gove rnment 's efforts in combatting 
labour misconduct.  
2.75.   Among  the legislation which have been amended are the Employment Act 1955 which came 
into effect on 1  September  2022. The main amendments of the laws include the additional provisions 
on discrimination and  the expansion of the Act to cover all workers irrespective of wages. In addition 
to that, the amendment provides specific clause on forced labour that protect workers against forced 
labour while focusing on the empowerment of workers and employers.  
2.76.   In addition, Malaysia has reduced the weekly working hours from 48 to 45 hours effective 
1 September  2022. This is following the amendments to the Employment Act 1955 which aims to 
safeguard the welfare of workers in line with the ILO Convention.  
2.5.3   Employees ' Minimum Standards of Housing and Amenities (Amendment) Act 2019  
2.77.   The Employees ' Minimum Standards of Housing and Amenities (Amendment) Act 2019 
(Act 446) came into force on 1  June 2020. Under the new amendment, the Act which previously 
covered housing and ac commodation of workers in the plantation and mining sectors has been 
extended to all employment sectors.  WT/TPR/G/436 • Malaysia  
 
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  2.78.   Act 446 also seeks to improve the Guidelines for Foreign Workers Accommodation 2018, which 
covers the minimum standard for accommodation space, basic f acilities for workers ' accommodation 
and elements of security and hygiene. The enforcement of the Act, including the new regulations 
governing housing and workers facilities was aimed at preventing the spread of the COVID -19 
pandemic in accordance with Rec ommendation 115 (Workers Housing Recommendation, 1961) by 
the ILO.  
2.5.4   National Action Plan on Forced Labour 2021 -2025  
2.79.   The National Action Plan on Forced Labour (NAPFL) 2021 -2025 was formulated with the 
technical assistance  from the ILO through one of the proj ects under DWCP namely "From Protocol 
to Practice: A Bridge to Global Action on Forced Labour " (BRIDGE). The action plan sets out 
commitments of the Government to eradicate forced labour in Malaysia through one -nation 
approach.  
2.80.   There are four strategic go als that fall under the action plan which are the '4Ps strategy ' 
(Prevention, Protection , Prosecution and Partnership) which are in line with ILO 
Recommendation  203 (R203) – Forced Labour (Supplementary Measures) that accompanies 
Protocol  29 (P29).  
2.81.   The Ta sk Force on Compliance on Labour Laws and Policy has been developed in order to 
implement the NAPFL and to ensure that the industries are practicing the standards under the 
existing national  legislations and policies.  
2.5.5   Minimum Wage Policy  
2.82.   The Minimum Wage Order (MWO) was gazetted on 23  November  2018 to increase the 
minimum wage rate from MYR 1,050 to MYR 1,100. Subsequently, the minimum wage for major 
cities was increased to MYR 1,200 per month in 2022.  
2.83.   In 2022, the Federal Government Gazette has provided a standardi zed salary rate of not less 
than MYR 1,500 per month effective from 1  May 2022, applicable to all employers who employ a 
minimum of five workers as categori zed under Malaysia Standard Classification of Occupations 
(MASCO). Nonetheless, effective  1 January  2023, MWO  2022 is compulsory to all employers 
including those who employ less than five people and those who are not listed under the MASCO 
category.  
3  TRADE  POLICY  DEVELOPMENTS  
3.1  Overview  
3.1.  The Malaysian business community has remained resilient despite global uncertain ties and 
concerns during the review period. Trade grew by 18.3% to MYR 2.228  trillion  (USD 537.50  billion ) 
compared to MYR 1.883  trillion  (USD 466.65  billion ) in 2018.  
3.2.  Malaysia 's exports increased by 7.3% in 2018, exceeding the export growth of 4.4% proje cted 
in the Economic Outlook 2019. This trend continued in 2019, as Malaysia's trade surplus grew 
significantly even as global demand slowed due to rising trade tensions.  
3.3.  Trade activities remained intact during the pandemic period, as Malaysia 's trade surp lus in 2020 
recorded double -digit growth for the fourth consecutive year since 2017. In 2021, Malaysia 's external 
trade surpassed MYR 2 trillion  (USD  500 billion ) for the first time, and recorded the fastest trade 
growth since 1994. Export value grew to a record high of MYR 1.241  trillion  (USD 299.33  billion ) in 
2021.  
3.4.  Malaysia's trade continued its stellar performance in the first half of 2022. Between January 
and June 2022, trade rose by 28.2% to MYR 1.355  trillion  (USD  316.76  billion ) compared to the 
same period in 2021. Trade expansion was seen mainly to the Association of Southeast Asian Nations 
(ASEAN), the People 's Republic of China, the United  States , the European  Union  and Chinese  Taipei . WT/TPR/G/436 • Malaysia  
 
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  Table  3.1 Malaysia 's External Trade  2018 -22 
Year  Total  Exports  Total  Imports  Trade  Balance  Total  Trade  
MYR Bil Growth  
Rate % MYR Bil Growth  
Rate % MYR Bil Growth  
Rate % MYR Bil Growth  
Rate % 
2018 1,003.59  7.3 879.80  5.2 123.78  25.7 1,883.39  6.3 
2019 995.07  -0.8 849.41  -3.5 145.66  17.7 1,844.48  -2.1 
2020 983.83  -1.1 800.48  -5.8 183.35  25.9 1,784.31  -3.3 
2021 1,241.02  26.1 987.34  23.3 253.68  38.4 2,228.37  24.9 
2021 
(Jan-Jun) 586.04  30.3 470.65  21.2 115.40  88.3 1,056.69  26.1 
2022 
(Jan-Jun) 739.00  26.1 615.93  30.9 123.06  6.6 1,354.93  28.2 
3.5.  Malaysia 's trade growth is anticipated to sustain its positive momentum, underpinned by 
continuous demand for E&E and commodity -based products.  
3.2  Initiatives  to Facilitate  Trade  
3.6.  Trade is an important engine of growth for Malaysia. As a result, reducing unnecessary 
regulatory burdens, facilitating trade and improving border competitiveness are at the forefront of 
policy improvement. Among the initiatives introduced by Malaysia to facilitate trade are:  
3.2.1   Reviewing Non -Tariff Measures  
3.7.  Reviewing non -tariff mea sures (NTMs) is an on -going initiative under the Malaysia Productivity 
Blueprint (MPB) since 2017, where the main objective is to streamline processes and regulations for 
export and import permits to reduce unnecessary regulatory burdens, facilitate trade and improve 
border competitiveness. As a result of implementing this initiative, a total of 62 legislation and 80 
subsidiary legislation were reviewed, while a total of 412 NTMs were identified and upload reviewed 
NTMs (sanitary and phytosanitary measures and technical barriers to trade) into the ASEAN Trade 
Repository as per commitment under the ASEAN Trade in Goods Agreement (ATIGA).  
3.2.2   National Policy on Good Regulatory Practice  
3.8.  National Policy on Good Regulatory Practice (NPGRP) is a revision and improvem ent of the 
National Policy on the Development and Implementation of Regulations (NPDIR) introduced in 2013. 
The objective of NPGRP is to promote an effective, efficient and accountable regulatory system and 
a rule -making process that support efforts to rea lize Malaysia 's economic development goals. 
Through NPGRP, the Government requires its regulatory agencies to adopt and implement good 
regulatory practice (GRP) by:  
i. embracing the NPGRP and the underlying principles of GRP;  
ii. ensuring readiness to undertake t he responsibility of delivering a high -quality regulatory 
environment; and  
iii. establishing systems and procedures to ensure regulatory quality.  
3.9.  The Malaysia  Productivity Corporation ( MPC) is being given the responsibility to act as an 
oversight body to prom ote, support, and facilitate GRP and Regulatory Impact Analysis (RIA) 
implementation by the regulators. RIA is an essential GRP component in proposing new regulations 
or amendments to existing regulations, aims to improve the quality of regulations through  a robust 
and thorough analysis of regulatory proposals. RIA is intended to provide assurance that problems 
are adequately identified and addressed through regulatory or non -regulatory measures and ensure 
that specific policy solutions have been drafted to  enhance the public interest.  
3.10.   Regulatory Impact Statements (RIS) is a document prepared by the regulator in support of a 
proposal for a new regulation or an amendment to a regulation following consultation with affected 
parties. It contains a description o f the RIA undertaken and its analysis, recommended option and 
implementation strategy. RIS is presented to the decision -maker to enable informed decisions to be 
made based on a balanced assessment of the best available information. Additionally, when a WT/TPR/G/436 • Malaysia  
 
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  proposed regulation has a direct bearing on trade, a trade impact assessment should be incorporated 
into RIS. From the period of 2014 until July  2022, a total of 992 Regulatory Notifications (RN) and 
186 RIS have been received from the regulators.  
3.11.   MPC in coll aboration with the World Bank has established the Unified Public Consultation (UPC) 
portal as a one -stop portal for online consultation on rulemaking initiatives. UPC was launched in 
October 2019, where the main objectives are to facilitate consultation wi th stakeholders through 
online feedback; and comply with the standards set out by good practice on public consultation.  
3.12.   As of July  2022, a total of 74 ministries and agencies are utili zing the UPC portal to conduct 
public consultations with stakeholders. Meanwhile, a total of 424 consultation documents are 
uploaded to obtain feedbacks on the existing regulations so that they can be coordinated and remain 
relevant with current situation. The portal received a total of 510,600 visitors and 17,671 registered 
users. Consultation paper relating to trade includes on standards development , international trade  & 
industry, and domestic trade & consumer affairs.  
3.2.3   Malaysia Productivity Blueprint  
3.13.   Malaysia  Productivity Blueprint (MPB) has mapped the significant contribut ion of the priority 
subsectors  to Malaysia 's productivity and economic growth. In 2017, upon the launch of MPB, nine 
Productivity Nexus namely, agro -food, chemicals and chemical products, electrical and electronics, 
information, communication and technolog y, machinery and equipment, private healthcare, 
professional services, retail and food & beverages, and tourism were established. In 2021, the nine 
Productivity Nexus conducted more than 60 productivity improvement programs, benefiting more 
than 60,000 com panies. Two more Productivity Nexus have been added for the Construction and 
Logistics sectors in the Twelfth Malaysia  Plan, bringing the total number to 11 Productivity Nexus.  
3.14.   The establishment of the Logistics Productivity Nexus (LPN) was a timely move under the 
Twelfth Malaysia Plan  to boost Malaysia 's e-commerce market. LPN 's productivity improvement 
programs were able to facilitate domestic and international trade by strengt hening the efficient 
movement of goods and enhancing logistics supply chain.  
3.2.4   Export Promotion Activities  
3.15.   The Malaysia External Trade Development Corporation (MATRADE) actively assists foreign 
companies that are keen to source products and services from Ma laysia. As a trade promotion 
organi zation, MATRADE also engages in Joint Promotion Activities with other TPOs to help promote 
and strengthen economic partnership, such as with the Japan External Trade Organization (JETRO), 
Asian Trade Promotion Forum (ATPF ), ASEAN -Japan Centre (AJC) and ASEAN -Korea Centre (AKC).  
3.16.   The Export Coordination Committee (JK -X) was established in 2018. The JK -X is supported by 
10 Sectoral Task Force (STF), led by MATRADE to assist relevant Ministries and Agencies to 
coordinate expor t promotion activities. The 10 sectors involved are:  
i. construction services, building materials, education services, franchise, professional 
services;  
ii. electrical and electronics;  
iii. information & communications technology;  
iv. machinery & equipment;  
v. food and bever age; 
vi. lifestyle, rubber, timber, medical tourism, medical devices, leisure and MICE (meetings, 
incentives, conferences and exhibitions);  
vii. oil & gas, and green technology;  
viii. aerospace, automotive, maritime, rail and defence;  WT/TPR/G/436 • Malaysia  
 
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  ix. exporters development; and  
x. cross border e -commerce.  
3.2.5   National Trade Blueprint  
3.17.   The National Trade Blueprint was launched on 25  October  2021 to increase Malaysia 's trade 
competitiveness through improved business ecosystem, as well as to improve Malaysia's po sition as 
an exporting country.  
3.18.   The framework of the Blueprint is guided by four key priorities, namely:  
i. increase exporting companies by enhancing the capabilities of SMEs and encouraging them 
to be part of global value chains;  
ii. increase the export of high value goods;  
iii. diversify export products by moving into high value niche products; and  
iv. improve export ecosystem by removing red tapes and barriers faced by exporters.  
3.2.6   Promotion of Investments for Manufacturing and Services Sectors  
3.19.   The Malaysian Investment D evelopment Authority (MIDA) is an agency under MITI. It is 
Malaysia 's principal Investment Promotion Agency (IPA), which is responsible for the promotion of 
investments  and coordination  of industrial development and selected services sectors in the country . 
MIDA plays an active role as a one -stop-centre with free access to useful and pertinent information 
on investment, trade, financing, productivity  and services. Among the initiatives under MIDA  during 
the review period to promote investments include:  
i. Project Acceleration and Coordination Unit  
MIDA established the Project Acceleration and Coordination Unit (PACU) to provide end -to-
end facilitation to all projects approved by the National Com mittee for Investment (NCI), 
enabling a speedy and efficient implementation of projects. PACU will assists all stakeholders, 
both small businesses and multinational corporations. It also acts as an intermediary between 
the business community and relevant s takeholders such as the federal and state government 
departments, IPAs, technical agencies and related utility service providers.  
 
ii. One Stop Centre for Business Travellers  
During the COVID -19 pandemic, Malaysia introduced the One Stop Centre (OSC) for Business 
Travellers that was set up in Business Travellers Centre (BTC) at the Kuala Lumpur 
International Airport (KLIA) to ease the movement of business travellers by expediting the 
approval of their entries to do business in Malaysia.  
 
Following the tra nsitioning into the endemic phase, Malaysia reopened its border for 
international travellers including business travellers. Thus, the OSC for Business Travellers  
located in KLIA was phased out effective 1  April 2022.  
 
3.2.7   The New Investment Policy based on Nat ional Investment Aspirations  
3.20.   The New Investment Policy based on New Investment Aspiration (NIA) was launched on 
6 October  2022 to serve as a basis for comprehensive reforms of Malaysia 's investment policies. The 
Government has been working with multiple st akeholders through series of engagements  and labs 
to put in place comprehensive reforms and enabling policies  to strengthen our offerings to investors .  
3.21.   The New Investment Policy based on  NIA will intensify high technology and innovation which 
balance econ omic and environmental sustainability, consistent with global benchmarks in 
environment al, social and governance (ESG).  Subsequently , NIA is aligned with the Twelfth Malaysia  
Plan.  WT/TPR/G/436 • Malaysia  
 
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  3.22.   Pivotal to this New Investment Policy based on NIA are six strategic thrusts to address 
economic and investment challenges of a dynamic and fast changing world:  
i. unified investment strategy on our National Investment Aspirations and the ESG Agenda;  
ii. agile and forward -looking incentive packages targeted directly to match the needs and 
demands of investors;  
iii. Investment Promotion Agencies (IPA) landscape with clear roles and responsibilities for 
seamless and smooth investor journey;  
iv. accelerated innovation ecosystem to nurture high quality investments;  
v. vibran t talent pool that meets the needs of the labour market; and  
vi. streamlining of a holistic business ecosystem that ensures the ease of doing business, 
enhances competitiveness, and secures Malaysia 's position as a preferred investment 
destination in the regio n. 
3.23.   The NIA will provide the necessary impetus to pursue high -technology and sustainable 
investments as well as to intensify innovation, striking a balance between economic and 
environmental sustainability while reducing dependency on foreign labour, in lin e with global 
benchmarks in ESG. New investments that are anchored upon these elements will propel growth in 
the technologically -sophisticated sectors, as well as strengthen forward and backward linkages. This 
will also provide a pathway for investors to a ccess new market opportunities, particularly in 
developed countries that mainstream sustainability throughout their value chain.  
3.24.   In this context, the NIA takes into account global interest surrounding carbon -neutrality, 
including the use of technology to help reduce carbon footprint. The following are among the 
transforming strategic sectors that have been identified based on the latest ESG -based practices:  
i. Manufacturing: transformation to drive increased manufacturing of sustainable products 
such as elect ric vehicles and adoption of ESG practices such as social responsibility;  
ii. Services Sector: incorporation of latest ESG practices into services such as corporate 
governance standards and sustainable investing;  
iii. High-Tech Sectors: integration of advanced tech nologies with latest ESG trends such as 
green data centres; and  
iv. Energy and Power: accelerated transition of energy and utility industries towards 
renewable sources.  
3.2.8   SME Masterplan 2012 -2020  
3.25.   In 2021, SMEs represented a significant share of overall business establishments 
(1,224,494.52  million , or 97.44% of the total), accounted for 7.31  million  jobs (about 47.8% of total 
employment), 378.42% of GDP, 113.75% of exports and 835.85% of the services sector.  
3.26.   For the manufacturing sector, MSMEs are defined as fir ms with sales turnover not exceeding 
MYR 50 million  or number of full -time employees not exceeding 200, while for the services and other 
sectors, they are firms with sales turnover not exceeding MYR 20 million  or number of full -time 
employees not exceeding  75.  
3.27.   The SME Masterplan (2012 –2020) provides policy direction for SMEs development in Malaysia. 
During the Plan period, the average annual growth of SMEs GDP was at 5.4% which outperformed 
the overall GDP growth of 3.8% and non -SME growth of 3.0%. This pe rformance was achieved 
against a backdrop of a challenging global and domestic economic landscape in 2020, particularly 
with the outbreak of pandemic across the globe. Throughout the same period, the SMEs value -added 
increased by MYR 173.7  billion , from MYR 339.1  billion  in 2012 to MYR 512.8  billion  in 2020.  WT/TPR/G/436 • Malaysia  
 
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  3.28.   The focus of the Plan was on the implementation of the six High Impact Programmes (HIPs):  
Table  3.2 Performance under the HIPs  of SME Masterplan  
HIP 1: 
Integration of Business  
Registration  and Licensing  HIP 2: 
Technology Commercialisation  
Platform  (TCP)  HIP 3: 
SME Investment  Partner  (SIP)  
- MalaysiaBiz  portal, a single 
gateway for business registration 
and licensing developed  
- Information on 2,919 licences 
covering 1,174 business activities 
from 508 Federal, State and local 
licensing authorities  - 200 projects approved for 
integrated assistance from proof 
of concept to the 
commercialisation phase  
- 220 licensing deals signed  
- 85 innovations commerciali zed  
- MYR 121 million  sales generated  - Two funds of MYR 90 million  
established with MYR 40 million  
investment from Government and 
MYR 50 million  from private 
sector  
- MYR 19.5 million  invested into 
9 early-stage SMEs  
HIP 4: 
Going  Export  (GoEx)  Program  HIP 5: 
Catalyst  Program  HIP 6: 
Inclusive  Innovation  
- 321 SMEs assisted, of which 179 
participated in market immersion 
programmes  
- MYR 770.9  million  in potential 
export sales  - 134 SMEs assisted  
- SMEs in BioNext Initiative 
recorded average sales growth 
of more than 20% (2016 to 
2018)  
- 27 SMEs in Aerospace 
Manufac turing Initiative 
obtained AS9100 certification 
to be part of the global supply 
chain, resulting in 49% 
increase of sales revenue, 
from MYR 18.1 million  (2017) 
to MYR 26.9 million  (2019)  - 60 innovations diffused, 
benefitting 37,451 people in 
51 communities  
3.29.   Two areas are identified as catalysts to promote growth namely (i)  value chains in high impact 
industries, with focus on linking SMEs with larger firms and (ii)  internationali zation of SMEs, with 
focus on developing targeted market and strateg ic alliances for SMEs ' participation in the global 
value chains.  
3.2.9   National Entrepreneurship Policy 2030  
3.30.   The National Entrepreneurship Policy 2030 (NEP2030) launched on 11  July 2019 is a long -
term strategic document that sets the direction towards making Mal aysia an entrepreneurial nation 
by 2030. To fulfil this aspiration, the policy will create a dynamic entrepreneurship ecosystem which 
will benefit all segments of society.  
3.31.   The goal of NEP2030 is to spearhead an integrated national entrepreneurship develop ment 
with the following objectives:  
i. to create a holistic and conducive entrepreneurship ecosystem for sustainable, balanced 
and inclusive socio -economic development;  
ii. to develop a community with an entrepreneurial mindset and culture;  
iii. to increase quality, viable, resilient and competitive entrepreneurs with global mindset;  
iv. to scale up enterprises and SMEs; and  
v. to make entrepreneurship as a preferred career of choice.  
3.32.   The achievement of the five objectives under the NEP2030 requires effective cooperation, 
sustainable coordination, as well as the commitment and support from all stakeholders. With the 
NEP2030 framework, all public and private stakeholders involved in entrepreneurship can play an 
effective role in making Malaysia an entrepreneuria l nation by 2030.  WT/TPR/G/436 • Malaysia  
 
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  3.2.10   Social Entrepreneurship Action Framework 2030  
3.33.   The Government launched the Malaysia Social Entrepreneurship Action Framework 2030 
(SEMy2030) on 23  April 2022 with the theme of "mainstreaming the social enterprise, normali zing 
social impact ". This framework outlines five objectives in line with the aspirations, strategies and 
initiatives set out under  the Twelfth Malaysia Plan  and the  NEP203 0, which are:  
i. to build a cohesive and holistic ecosystem for social entrepreneurship development in 
Malaysia;  
ii. to create a critical mass of social entrepreneurs;  
iii. to strengthen the capacity building and competitiveness of home -grown social enterprises;  
iv. to mainstream social enterprise as effective contributors to national development; and   
v. to enhance and normali ze social enterprise to bring positive social and environmental 
impact.  
3.34.   SEMy2030 provides a new national direction for the social entrepreneursh ip in Malaysia by 
developing a comprehensive and conducive ecosystem to support the growth of social enterprises. 
The framework also outlines initiatives for enhancing awareness, reach and inculcation of a social 
entrepreneurship concept that is competitiv e and impactful to improve the livelihood of society.  
3.3  Multilateral  Trading  System  
3.3.1   Overview  
3.35.   Malaysia has been an active member of the WTO and also participate in various international 
organi zations and fora such as the Organisation for Economic Co -operation  and Development 
(OECD), World Economic Forum (WEF), Indian Ocean Rim Association (IORA), and the 
Commonwealth.  
3.3.2   Malaysia 's Involvement at the WTO  
The TRIPS Waiver  
3.36.   Malaysia recognizes the challenges faced by developing and least -developed countries in 
accessing vaccines, diagnostics and therapeutics during the COVID -19 pandemic. As a strong 
believer in vaccine multilateralism through closer cooperation, Malaysia decided to co -sponsor the 
proposed waiver of certain provisions in the TRIPs Agreement (the  TRIPS waiver ) which has been 
adopted by the Ministers during the Twelfth WTO Ministerial Conference (MC12) in 2022.  
Dispute Settlement System  
3.37.   Malaysia values the multilateral trading system as it provides platforms and mechanisms 
through which Members can ensu re their rights under the WTO covered Agreements can be enforced. 
Currently, Malaysia is leveraging on the dispute settlement system to defend her trade interest by 
initiating  a dispute case over certain measures concerning palm oil and oil palm crop -based  biofuels 
(DS600). In addition, Malaysia actively participates as  third party in other dispute cases of interest .  
Implementation of Commitment in Trade Facilitation Agreement  
3.38.   Malaysia has fully implemented its TFA commitments from February  2017 to June  2021. 
Malaysia has notified the full commitments of Article  7.8 on Expedited Shipment and Article  11.9 on 
Advance Filing and Processing of Transit on 1  June 2021, ahead of initial notification deadline of 
22 February  2022.  
3.39.   The monitoring and coordination of the domestic implementation of the WTO TFA are 
conducted by the Trade Facilitation Cluster Working Group (TFCWG) that was established in 2015 WT/TPR/G/436 • Malaysia  
 
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  which also serves as the national trade facilitation committee. The current foc us of the TFCWG is on 
implementing the trade facilitation measures as outlined under National Trade Blueprint 2021 -2025 
and Trade Facilitation and Logistics Related Strategies under the Twelfth Malaysia  Plan. 
3.40.   In addition, the Unified Public Consultation (U PC) portal also serves as a platform  to facilitate 
stakeholder engagements as part of an informed decision -making and good regulatory governance. 
It provides an opportunity to traders and other interested parties to comment on new or 
amendments to regulati ons that impacts trade before entry into force which is in line with Article  2 
(Opportunity to Comment, Information Before Entry into Force, and Consultations) of the TFA.  
Implementation of Commitment in the Expansion of Information Technology Agreement  
3.41.   Malaysia together with 23 other WTO members had adopted the Ministerial Declaration on the 
Expansion of Trade in Information Technology Products (ITA2). Malaysia 's commitment for the 201 
products covers 410 affected tariff lines (9 digit), in whi ch 351 lines (86%) are already at zero  duty 
(nil import duty). The remaining 59 tariff lines have current applied duties ranging from 5% to 30% 
which will be progressively reduced.  
3.42.   Malaysia 's involvement in ITA1 had helped the country 's ICT industry increa se exports by 
nearly three -fold from USD  21.7 billion  in 1996 to USD  60.5 billion  in 2010, with an average annual 
growth of 8%. Further liberali zation under ITA2 enabled local producers in Malaysia 's ICT industry 
to have wider market access. Malaysian prod ucers of ICT products also benefit ed from the cheaper 
imported parts and components which contributed to lower cost of production.  
3.4  Free Trade Agreements  
3.43.   Malaysia continues to place high priority on market opening and considers its active 
engagement in free  trade agreements ( FTAs)  as building blocks for wider multilateral trade 
liberali zation. To date, Malaysia has implemented a total of 15 FTAs which comprises seven bilateral 
FTAs with Australia, Chile, India, Japan, Pakistan, New  Zealand  and Türkiye; and e ight regional FTAs, 
which are the ASEAN Free Trade Area (AFTA), Regional Comprehensive Economic Partnership 
Agreement , as well as ASEAN's FTAs with China, Australia and New  Zealand , India, Japan, Republic 
of Korea and Hong Kong, China.   
3.44.   Trade with FTA partners during the first six months of 2022 which took up 66.6% of Malaysia 's 
total trade, increased by 27.6% to MYR 902.35  billion  (USD 210.97  billion ) compared to the same 
period of 2021. Exports expanded by 27.0% to MYR 495.97  billion  (USD 116.00  billion) and imports 
rose by 28.3% to  MYR 406.38  billion  (USD 94.97  billion ). 
Table  3.3 Malaysia 's External Trade with FTA Partners 2018 -22 
Year  Total  Exports  Total  Imports  Trade  Balance  Total  Trade  
MYR Bil Growth  
Rate % MYR Bil Growth  
Rate % MYR Bil Growth  
Rate % MYR Bil Growth  
Rate % 
2018 694.36  9.0 572.76  4.3 121.60  38.3 1,267.12  6.8 
2019 678.57  -2.3 551.77  -3.7 126.80  4.3 1,230.35  -2.9 
2020 669.40  -1.4 520.22  -5.7 149.18  17.6 1,189.63  -3.3 
2021 831.92  24.3 659.22  26.7 172.70  15.8 1,491.14  25.3 
2021 
(Jan-Jun) 390.39  26.5 316.71  25.6 73.68  30.3  707.10  26.1 
2022 
(Jan-Jun) 495.97  27.0 406.38  28.3 89.59  21.6 902.35  27.6 
 
3.4.1   Bilateral Agreements  
3.45.   Cognisant of the crucial role assumed by FTAs as a significant component of trade policy, 
Malaysia is embarking  on FTA negotiations with European Free Trade Association (EFTA) States 
(Iceland, Liechtenstein, Norway, and Switzerland).  
3.46.   Further broadening th e present FTA between Malaysia and Türkiye that covers trade in goods, 
Malaysia and Türkiye have completed the expansion negotiations to include trade in services, 
investment and e -commerce. The First Protocol to Amend the FTA between the Government of WT/TPR/G/436 • Malaysia  
 
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  Malaysia and the Government of the Republic of Türkiye which is the legal instrument for the 
expansion package was signed by both Governments on 29  September  2022 in Ankara, Türkiye.  
3.47.   Malaysia 's FTA negotiations with the European  Union  (EU) which was launched in 2010 has 
been suspended since 2019. Informal discussions are underway to determine the way forward for 
this FTA. 
3.4.2   Regional Trade Agreements  
3.48.   As a member of the Association of Southeast Asian Nations (ASEAN), Malaysia is a party to 
all ASEAN FTAs, including the ASEAN Free Trade Area and ASEAN 's FTAs with China, Australia  and 
New Zealand , India, Japan, Republic  of Korea and Hong Kong,  China.  
3.49.   As part of her efforts to continue deepening regional economic integration through regional 
trade agreements, Malaysia has also become a party to the negotiations to review the ASEAN Trade 
in Goods Agreements (ATIGA) and to upgrade the ASEAN -Australia -New Zealand  Free Trade Area 
(AANZFTA), as well as the negotiations towards establishing an FTA between  ASEAN and Canada.  
3.50.   In 2013, ASEAN and its six dialogue partners i.e. Australia, China, India, Japan, 
Republic  of Korea and New Zealand  launched the Regional Comprehensive Economic Partnership 
(RCEP) negotiations. The objective of the RCEP is to streamline the six ASEAN FTAs with its dialogue 
partners into a single regional trade agreement  that can contribute to strengthening regional value 
chain in the region.  
3.51.   All chapters were concluded in March  2020 and the 15 countries signed the RCEP Agreement  
on 15  November  2020. On 17  January  2022, Malaysia successfully submitted its Instrument of 
Ratification to the ASEAN Secretariat and the Agreement entered into force for Malaysia on 
18 March  2022.  
3.52.   The Comprehensive and Progressive Agreement for Trans -Pacific Partn ership (CPTPP) is the 
most ambitious FTA for Malaysia. What sets the CPTPP apart is its level of ambition and the 
magnitude of its scope, as it provides for commitments and concessions that are of very high q uality , 
compared with other FTAs.  
3.53.   Malaysia has officially submitted the Instrument of Ratification for the CPTPP to New Zealand, 
the CPTPP Depositary on 30 September 2022. Malaysia becomes the ninth country to ratify the 
CPTPP and the Agreement officially takes effect for Malaysia on 29 November 2022.  
3.54.   Malaysia 's ratification of the CPTPP is expected to bring significant economic and investment 
benefits. CPTPP ratification will lead to an increase in exports, which is projected at USD354.7 billion 
and increase in investments, with cumulative gains amoun ting to USD112.3 billion over 2021 -2030.  
3.55.   Despite being an observer to the plurilateral Government Procurement Agreement (GPA) 
under the WTO, Malaysia  has undertake n specific commitments on Government Procurement , under 
the CPTPP. Most of these commitments  are identical to those in the GPA, while in some areas, it 
goes beyond the GPA. This includes dedicated measures by the Parties to ensure effective 
participation by SMEs in government procurement activities.  
3.5  Association of Southeast Asian Nations (ASEAN)  
3.56.   Malaysia continues to implement the ASEAN Economic Community (AEC) Blueprint adopted 
in 2015 that embodies the overall vision for ASEAN regional economic integration from 2016 to  2025. 
The AEC Blueprint 2025 strives to achieve targeted strategic measures u nder each of the five 
characteristics of AEC 2025 which are: (i)  A Highly Integrated and Cohesive Economy; (ii)  A 
Competitive, Innovative, and Dynamic ASEAN; (iii)  Enhanced Connectivity and Sectoral 
Cooperation; (iv)  A Resilient, Inclusive, People -Oriented , and People -Centred ASEAN; and (v)  A 
Global ASEAN. The strategic measures are operationali zed through 23 sectoral work plans by various 
sectoral bodies in ASEAN.  
3.57.   On 28  April 2021, the Mid -Term Review (MTR) of the ASEAN Economic Community (AEC) 
Blueprint 2025 was launched  as part of the monitoring process on the progress in achieving those WT/TPR/G/436 • Malaysia  
 
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  targeted strategic measures underlined in the AEC Blueprint 2025. The MTR exercise, among  others 
is aimed to identify issues and challenges on implementation; and propose recommendations to 
implement the Blueprint.  
3.58.   The recommendations of the MTR are currently being implemented under the AEC Blueprint 
2025. Additionally, the findings of the MTR  are also acknowledged as a useful tool in the process of 
formulating a post -2025 vision for ASEAN. This document would be especially important and relevant 
as Malaysia take the reins of the ASEAN Chairmanship in 2025, where a new vision or blueprint will 
be unveiled.  
3.59.   The development of the ASEAN Community has been greatly aided by the ASEAN Connectivity 
Agenda. In order  to progress toward a more integrated Southeast Asian region, ASEAN launched the 
Master Plan on ASEAN Connectivity (MPAC) 2011 -2015 as a fl agship initiative in 2010. Subsequently, 
the ASEAN Leaders adopted the Master Plan on ASEAN Connectivity 2025 (MPAC 2025) in Vientiane, 
Lao PDR, on 6  September  2016. The MPAC 2025, which focuses on five major areas: sustainable 
infrastructure, digital inno vation, seamless logistics, regulatory excellence, and people mobility.  
3.60.   Malaysia recogni zes the MPAC as essential to ASEAN's efforts towards further regional 
economic integration and fervently believes that the MPAC's effective implementation will help to 
increase intra -ASEAN trade. Malaysia is dedicated to making MPAC 2025 a success by supporting its 
initiatives including to expand cooperation with the EU in the area of connectivity, reinforce ASEAN 
member states ' commitment by working closely with strateg ic partners, stakeholders, and other 
interested parties to find ways to streamline national economic and infrastructure development 
planning or programs.  
3.6  Asia Pacific  Economic  Cooperation (APEC)  
3.61.   Malaysia helm the APEC Chairmanship for the second time in 2020 with the theme "Optimising 
Human Potential Towards a Resilient Future of Shared Prosperity: Pivot. Prioritise. Progress ". 
Malaysia successfully concluded APEC 2020 with the adoption of the APE C Putrajaya Vision 2040 as 
well as the 2020 Kuala Lumpur Declaration.  
3.62.   While the year -long hosting was originally planned for a physical setting, the unintended 
consequences of the global outbreak of the COVID -19 pandemic led Malaysia on a historical journ ey 
when all the related meetings including APEC Ministerial Meeting (AMM) and APEC Economic Leaders ' 
Meeting (AELM) were conducted in a fully virtual format. In fulfilling the commitment, Malaysia  
recalibrated  its organi zation of the APEC 2020 by adapting to the new norm, thus creating a new 
landscape for APEC meetings as a pragmatic response to the challenges brought by the pandemic.  
3.63.   In continuing APEC 's aspiration for a more integrated and open region, the maturity of the 
Bogor Goals in 2020, led to the f ormulation of a new Vision in which APEC Leaders successfully 
adopted, known as the APEC Putrajaya Vision 2040. The Vision outlines APEC Economies ' aspirations 
and the way forward for APEC for the next 20 years. The Vision aspires for an open, dynamic, 
resilient and peaceful Asia Pacific community by 2040  premised on three key economic drivers, 
namely:  
i. trade and investment;  
ii. innovation and digitali zation; and  
iii. strong, balanced, secure, sustainable and inclusive growth.  
3.64.   APEC as an incubator of ideas had enab led Malaysia to participate in the various capacity 
building efforts toward supporting the regional and economic integration, as well as in support of 
the discussions on the multilateral trading system.  
3.7  Belt and Road Initiative  
3.65.   The Belt and Road Initiative  (BRI) is an important economic framework between Malaysia and 
the People 's Republic of China (PRC), particularly in the realm of infrastructure development and 
regional connectivity. Both countries have inked the Memorandum of Understanding (MoU) on WT/TPR/G/436 • Malaysia  
 
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  Promo ting Mutual Economic Development through the PRC 's Silk Road Economic Belt and the 
21st Century Maritime Silk Road Initiative in 2017.  
3.66.   The BRI  MoU has further strengthened trade and investment linkages between Malaysia and 
the PRC. Since 2018, Malaysia participated in the China International Import Expo (CIIE), which is 
one of the key trade expos in BRI, where PRC made commitments to import over  USD 30 trillion  and 
USD 10 trillion  worth of goods and services respectively, over the span of 15 years.  
3.67.   In addition, the Malaysia -China Kuantan Industrial Park (MCKIP) and China -Malaysia Qinzhou 
Industrial Park (CMQIP) endorsed as the BRI  projects, have been progressively expanded to include 
major investments from PRC and other countries in strategic sectors.  
4  CHALLENGES AND OPPORTUNITIES OF EXTERNAL ENVIRONMENT  
4.1  Overview  
4.1.  During the period under review, there were a number of global events that affected economic 
growth arising from geopolitical tensions, COVID -19 pandemic and volatility in commodity prices.  
4.2.  Nevertheless, Malaysia 's trade remained resilient despite continued uncertainties in the global 
environment. In 2021, Malaysia 's extern al trade surpassing MYR 2 trillion  for the first time and 
recorded the fastest growth since 1994. Exports valued at MYR 1.24 trillion , achieving the 
Twelfth  Malaysia Plan export projection for 2025, four years ahead of the target. Trade surplus was 
posted for 24 consecutive years since 1998. Malaysia also recorded stellar investment performance 
for 2021, attracting record -breaking approved investments worth MYR 306.5  billion . This is due to 
the country 's openness, pragmatic and agile policies that were intr oduced to foster a conducive trade 
and investment climate.  
4.2  COVID -19 Response Measures  
4.2.1   Public Health Response to COVID -19 
4.3.  The COVID -19 pandemic placed an unprecedented burden on the public healthcare system 
globally. Despite the uncertainties brought about  by the pandemic, Malaysian economy remained 
resilient against these challenges by placing various measures to ensure business continuity.  
4.4.  Malaysia has a robust regulatory framework such as the Control of Drugs and Cosmetics 
Regulations (CDCR) 1984, which  enables the conditional fast track registration for pharmaceutical 
products during disasters to provide expedited access to pharmaceutical products for treatment or 
prevention of disease. The same regulation was also applied for implementing fast track ev aluation 
for Clinical Trial Import License (CTIL) evaluation of investigational products during pandemic 
situations starting 28  August  2020 without compromising the quality of assessment and adherence 
to international regulatory requirements.  
4.5.  The Medical D evice Authority (MDA) under the Ministry of Health exempted the registration 
requirements and approval were given to these essential medical devices through special access and 
conditional approval. This provision minimi zed the disruption of treatments and ensured the 
availability and timely access to medical device in healthcare facilities.  
4.2.2   Economic Response to COVID -19 
4.6.  The Government unveiled an economic stimulus package worth MYR 530 billion  through various 
proactive and immediate measures to mitigate th e impact of the pandemic, especially in fulfilling 
the needs of the public health system, assisting affected citizens and supporting business continuity.  
4.7.  The Government introduced the 6R National Economic Recovery Strategy, i.e. Resolve, 
Resilience, Resta rt, Recovery, Revitalise and Reform to spur national economic recovery and help 
Malaysia to bounce back from the pandemic. Following the implementation of these policy measures, 
the economy registered a positive growth of 3.1% in 2021 and further expanded by 5% in the first 
quarter and 8.9% in the second quarter of 2022. This was mainly supported by improved domestic 
demand as economic activity continued to normali ze with the easing of containment measures. The WT/TPR/G/436 • Malaysia  
 
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  improvement also reflects the recovery in the job market, with unemployment rate declining further 
to 3.9% as of April  2022, compared with 4.6% in the corresponding period of 2021.  
4.8.  The Government introduced initiatives to ensure domestic supply chain resilience including:  
i. introduction of an integrated  digital platform in March 2020 to ensure that the 
manufacturing and services sector are able to operate throughout the Movement Control 
Order (MCO) period .1 This system is known as COVID -19 Intelligent Management System 
(CIMS) which allows government age ncies to process and issue operating approvals for 
sectors listed in the essential services sector throughout the MCO. This enabled domestic 
companies to remain in operation and continue to supply parts and components for the 
global supply chain;  
ii. accelera tion of immuni zation rate for the manufacturing sector workers to ensure their 
safety and wellbeing are protected during the pandemic. A Public -Private Partnership 
COVID -19 Industry Immunisation Programme (PIKAS) was launched as part of Phase Four 
of the N ational COVID -19 Immunisation Programme (PICK) to allow the manufacturing 
companies to continue to operate within a safe environment at workplace. This helped to 
reduce the number of COVID -19 clusters in the workplace as well as revive the Malaysian 
econom ic recovery process; and  
iii. introduction of Safe@Work programme that focuses on creating safe work bubbles at both 
the manufacturing sites and workers ' living quarters. This initiative was intended to 
prevent disruption of operations and reduce the adverse im pact on productivity in the 
event of COVID -19 infection at workplace. Companies that are Safe@Work certified can 
be considered for full operation during future crisis and avail themselves for tax incentives.  
4.9.  All these initiatives have resulted in business continuity where the manufacturing and 
manufacturing -related services sectors were allowed to operate and ensure minimal disruption to 
the supply chain of critical parts, components and finished products. It also ensured the continued 
operations of critica l infrastructures and front -liners such as security, healthcare systems, 
information, communications, and adequate supply of basic necessities for the people.  
4.2.3   COVID -19 Measures Related to Standards  
4.10.   Malaysia undertook facilitative measures in the area of standards and conformity assessment 
in response to the COVID -19 pandemic.  
4.11.   The Department of Standards Malaysia (JSM) as the national standards body provided free 
public viewing access to 30 Malaysian standards related to pandemic management, such as medica l 
devices, risk management, laboratory management, and food hygiene. JSM is also the national 
accreditation body for the issuance of accreditation certificates to conformity assessment bodies 
(CABs), namely laboratories, certification bodies, inspection bo dies and proficiency testing providers, 
for greater market access and global recognition of technical competence and quality assurance.  
4.12.   Malaysia undertook the following steps to reduce the burden of conformity assessment bodies 
and organi zations, as well as enable businesses to operate smoothly:  
i. allowed assessments to be conducted remotely;  
ii. allowed assessments to be postponed for up to six months; and  
iii. extended the validity period of accreditation certificates which expire between 
1 March  2020 and 31  March 2021 for up to three months.  
 
1 MCO was a series of national quarantine and cordon sanitaire  measures implemented by the federal 
government of Malaysia in response to the COVID -19 pandemic in the country starting on 18  March  2020.  WT/TPR/G/436 • Malaysia  
 
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  4.13.   JSM also provided temporary or one -off waiver of annual accreditation fees to all its accredited 
CABs in May  2020, and extended the annual fee exemption to 2021. It is estimated that 80% of 
the 1,018 accredited organi zations have received the annual fee exemption in 2020.  
4.14.   As an outcome of these measures, Malaysia was able to provide uninterrupted accreditation 
services to CABs that were part of essential services, such as those in the manufacturing of food and 
medical devi ce, as well as healthcare. These measures enabled the continued recognition of services 
by customers and regulators, especially for those involved in the import and export of goods.  
4.3  Trade and Environment  
4.15.   In recognition of the importance of climate change and deforestation on the environment and 
livelihoods, Malaysia has introduced various policies and initiatives to ensure the sustainability of its 
economic sector, such as:  
4.3.1   Initiatives on Sustainable Palm Oil  
4.16.   The palm oil industry is one of the most regula ted industries in Malaysia, with more than 
60 national laws and regulations governing the industry. Malaysia is also committed to meet the 
Amsterdam Declaration that was signed by seven European countries in 2015. The Declaration 
requires exporters to comp ly with '100% Sustainable Palm Oil in Europe by 2020 '. 
4.17.   The Malaysian Sustainable Palm Oil (MSPO) Certification Scheme was made mandatory from 
1 January  2020 to ensure the country 's palm oil industry produces Certified Sustainable Palm Oil 
(CSPO) as per the  requirements of international consumers and the Amsterdam Declaration 2015.  
This has further enhanced the Malaysian palm oil industry 's efforts towards becoming more 
sustainable and environmentally friendly.  
4.18.   The MSPO Trace is established to track and trac e MSPO certification, from plant to the supply 
chain. The MSPO Trace comprises four modules: Certification; Logo; Complaints and Grievance; and 
Traceability. The MSPO Trace platform was also set up to monitor the certification and traceability, 
which provi des assurance on the sustainability of Malaysian palm oil.  
4.3.2   Malaysia Plastics Sustainability Roadmap  
4.19.   The plastics industry in Malaysia contributes a significant amount to the economy and Malaysia 
is a net exporter of plastic resin. The total import and exp ort of resin in 2019 were close to 3.1  million  
tonnes and 3.5  million  tonnes respectively with export amounting to MYR 15.03  billion  of worth.  
4.20.   The Malaysia Plastics Sustainability Roadmap 2021 -2030 was launched in 2021 with the vision 
to transform the whol e plastic value chain through having more sustainable practices and adopting 
circular economy principles throughout plastic lifecycle.  
4.21.   The Roadmap was developed to guide the country towards a sustainable plastic economy, 
enabled through the principles of circularity. This sustainable circular ecosystem covers the whole 
plastic value chain starting from its product design stage until the collection and sorting of plastic 
waste, making sure that the materials are kept in circulation in its highest possible v alue, can easily 
be recovered and recycled as well as be effectively reused. It involves design innovation, supply 
chain collaboration, high value recycling industry, resource efficiency through manufacturers as well 
as brand owner 's accountability in mana ging end -of-life impacts of their products.  
4.22.   The action plans outlined under this Roadmap are targeted at minimi zing the environmental 
impact due to plastic pollution and subsequently achieving plastics circularity and sustainability 
for 2030, and beyond. A mong the national targets that we aim to achieve are phasing out 
problematic single -use plastics, having 25% post -consumer plastic packaging to be recycled 
by 2025, 100% recyclability of plastic packaging by 2030, 15% average recycled content by 2030 
and 7 6% average collected -for-recycling (CFR) rate by 2030. This is in tandem with the 
Government 's objective of a sustainable Malaysia and creating business opportunities from plastic 
waste.  WT/TPR/G/436 • Malaysia  
 
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  4.3.3   National Mineral Industry Transformation Plan  
4.23.   The National Mineral and Industry Transformation Plan 2021 -2030 (TIM 2021 -2030) is a 
10-year plan to develop local mineral industry in a comprehensive and integrated manner through 
transformation at every level of value chain based on the principle of sustainability.  
4.24.   The basic principle of the framework is to adopt sustainable mining to generate economic 
potential without compromising the environmental and well -being of the people. This industry will 
be focusing on the value -added activities, circular economy, optimal u se of resources and waste 
reduction or zero waste.  
4.25.   Transformation outlined in TIM 2021 -2030 will include strengthening activities in upstream, 
midstream and downstream of value chain. The plan aims to increase the country 's income from 
new economic activit ies based on mineral resources and attracting more foreign investments. Based 
on the preliminary mapping, the country 's mineral resources are estimated to reach MYR 4.11trillion. 
TIM 2021 -2030 which was launched on 22  April 2021, outlines five key thrusts as listed below:  
i. governance and legislation;  
ii. development of mineral industry and value chain;  
iii. inventory and mapping of mineral resources;  
iv. technology and innovation; and  
v. human capital development.  
4.3.4   Policy on Forestry  
4.26.   Malaysia has taken into consideration new developments in the policies and legislations 
related to forestry. Forests are no longer regarded merely as a source of timber production for 
socioeconomic development of the country. In fact, the protective functi ons of forest specifically in 
conservation of biological diversity, environmental stability and preservation of culture have now 
become more pertinent.  
4.27.   Based on the Forest Resource Assessment 2020 (FRA 2020) conducted by the Food and 
Agriculture Organizat ion (FAO), Malaysia is amongst the 25 developing countries that have high 
forest cover and low deforestation activities (HFLD) in the world. Malaysia has been recogni zed as a 
HFLD country as our forest areas cover more than 50% of land areas and the defore station rate is 
below the average global deforestation rate. Furthermore, Malaysia has set a control mechanism by 
setting a national cap palm oil plantation amounting to 6.5  million  hectares, no new planted area on 
peat soil and no conversion of Permanent Reserve Forest for oil palm plantations, or for any other 
agricultural activity.  
4.28.   The Ministry of Energy and Natural Resources has set a policy of not giving any Operational 
Mining Scheme (OMS) approval in the Permanent Forest Reserve area. Legal action wi ll be taken 
against anyone found conducting mining activities without permission.  
4.29.   In these contexts, Malaysia had completed the process of reviewing its forestry policies 
(Forestry Policy of Peninsular Malaysia 2020, Sabah Forest Policy 2018 and Sarawak Fo rest 
Policy  2019) and launched the Malaysia Policy on Forestry in conjunction with the International Day 
of Forests 2021 on 21  March  2021. This policy covers key areas which include sustainable forest 
management, protection and conservation of biodiversity , climate change mitigation and adaptation, 
application of latest forestry technology, strengthening research and development as well as 
enhancing sharing of knowledge.  
4.30.   The objectives of Malaysia Policy on Forestry are to:  
i. ensure forest areas are managed through good governance and practices for the 
conservation of biodiversity and ecosystem services;  WT/TPR/G/436 • Malaysia  
 
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  ii. manage, conserve and rehabilitate the permanent reserved forests based on the principle 
of sustainable forest management;  
iii. ensure continuous supply of raw mat erials from natural forests and forests plantations to 
sustain development of wood -based and non -timber forests industries;  
iv. encourage the participation of indigenous, native and local communities in the protection, 
conservation and rehabilitation of forest s; and  
v. strengthen capacity building; research, development and commercialisation; innovation 
including providing adequate human and financial resources to improve forest 
management and utili zation of forest resources.  
4.31.   While the Federal Government takes le ad in the implementation of this policy, its jurisdiction 
is limited to providing guidance and support to the states in the three regions. The Peninsular 
Malaysia, Sabah and Sarawak will adopt this policy into their respective state forest policies and 
regulations in accordance to their states ' circumstances. The respective targets, goals and strategies 
are detailed in the Forestry Policy of Peninsular Malaysia for the states in the Peninsular, Sabah 
Forest Policy for Sabah and Sarawak Forest Policy for Sar awak.  
4.3.5   Convention on International Trade in Endangered Species of Wild Fauna and Flora  
4.32.   Malaysia is a party to Convention on International Trade in Endangered Species of Wild Fauna 
and Flora (CITES) since 18  January  1978. The International Trade in Endangere d Species Act 2008 
[Act 686] is the main legislation for the implementation of CITES in Malaysia and came into force on 
28 December  2009. Activities regulated include the import, export, transit, captive breeding and 
artificial propagation of scheduled spe cies. 
4.33.   The Ministry of Energy and Natural Resources (KeTSA) is the lead management authority and 
national focal point pertaining to CITES matters in Malaysia. There are nine management authorities 
responsible for the implementation of CITES, each empowered according to their respective 
legislation, jurisdiction of species and area. The authorities are:  
i. Department of Wildlife and National Parks (Peninsular Malaysia);  
ii. Department of Fisheries Malaysia;  
iii. Malaysian Timber Industry Board;  
iv. Department of Agriculture Malaysia;  
v. Forestry Department Peninsular Malaysia;  
vi. Sarawak Forestry Corporation;  
vii. Sabah Wildlife Department;  
viii. Sabah Fisheries Department; and  
ix. Sabah Forestry Department.  
4.34.   At the ASEAN level, the ASEAN Working Group on CITES and Wildlife Enforcement was formed 
as a forum for ASEAN member states to discuss policy coordination and regional cooperation in 
CITES issues and illegal wildlife trade. Malaysia regularly participate in various programs conducted 
within CITES framework and committed to enhance our capacity in the implementation of CITES 
provisions as well as strengthening our efforts in combatting illegal wildlife trade.  WT/TPR/G/436 • Malaysia  
 
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  4.3.6   Guidelines for Scrap Metal Importation  
4.35.   The Government has introduced a new import regulation for all waste paper an d scrap metal 
intended to be imported into Malaysia to ensure a more sustainable production of the steel and paper 
industry. The importation of all waste paper and scrap metal is now subjected to inspection process 
and issuance of Certificate of Approval ( COA) as per the Customs (Prohibition of Imports) 
(Amendment) (No.  2) Order 2022 which came into effect on 10  January  2022. The COA process is 
prescribed under the Guideline for Importation and Inspection of Scrap Metal and The Guideline for 
Importation and  Inspection of Waste Paper respectively.  
4.36.   The overarching objective of the new policy measure is to facilitate genuine importation of 
scrap metal and waste paper, while protecting the environment from any hazardous contaminants, 
in line with Goal 12: Ensur e Sustainable Consumption and Production Patterns of the United Nations 
Sustainable Development Goals (SDG); Basel Convention on the Control of Transboundary 
Movements of Hazardous Wastes and their Disposal; as well as the domestic law, i.e.  Environmental 
Quality Act (EQA) 1974.  
5  SECTORAL POLICIES  
5.1  Manufacturing Sector  
5.1.1   Overview  
5.1.  The overall investment performance in the manufacturing sector improved significantly 
in 2021, growing by 113.7% compared to a modest growth of 10.3% in 2020. In 2019, the 
manufacturin g sector saw a drop in approved investment of 5.3%, attributed mainly to the 
Government 's policy to curb the spread of COVID -19 pandemic by implementing the nationwide MCO 
which restricts movement of people as well as businesses.  
5.2.  Under the Twelfth Malaysi a Plan, Malaysia aims to energi ze the manufacturing sector in order 
to sustain Malaysia 's resilience and long -term competitiveness, and contribute to leading -edge, high -
paying job opportunities for Malaysians. Malaysia will continue to move forward and str engthen 
resilience through policies that would further enhance the positive trajectory. The New Investment 
Aspirations (NIA) is poised to attract high impact investments in new growth areas which will bring 
about positive spillover effects to the economy.  
5.3.  The electrical and electronics (E&E) industry in Malaysia continues to be the backbone of the 
manufacturing sector, the driver of technology adoption, and the main contributor to the national 
GDP. The approved investment for the E&E sector was valued at MYR 148 billion  in 2021. The highest 
investment went into solar products, accounting for MYR 42.2 billion  over a 15 -year period. This is 
set to transform Malaysia into an integrated hub for solar products in the region.  
5.4.  Among the major initiatives being im plemented to develop the E&E subsector is the tariff 
elimination commitment of the ITA2. With this, Malaysia 's ICT industry will have easier access to a 
wider market globally for its products and will provide market opportunities for more than 600 local 
producers to boost their exports to participating countries.  
5.1.2   New Industrial Master Plan 2030  
5.5.  The New Industrial Master Plan 2030 (New IMP 2030) has been developed to succeed the 
Third Industrial Master Plan (2005 to 2020). The New IMP 2030 is expected to be launched in the 
first quarter of 2023 and will set the strategic direction for industrial development.  
5.6.  The New IMP 2030 aims to strengthen the nation 's competitiveness through industrial 
development that incorporates social inclusivity and environmental su stainability. Therefore, these 
three principles, namely economic growth, inclusive growth and green growth are set to serve as 
the guiding principle for the growth of Malaysia 's industries.  
5.7.  The five policy objectives of the New IMP 2030 are:  
i. transition tow ards advanced manufacturing and services;  WT/TPR/G/436 • Malaysia  
 
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  ii. robust and agile supply chain with self -sufficiency in targeted areas;  
iii. world -class capabilities and innovation capacity;  
iv. global connectedness with good standing in the global value chain; and  
v. conducive ecosystem to attract quality and strategic investments.  
5.8.  The following five policy thrusts form the foundation and building blocks for achieving Malaysia 's 
industrial development vision by 2030:  
i. embrace technology and innovation to grow the industries;  
ii. strengthen internationali zation for greater integration into global economy;  
iii. accelerate talent development to meet current and future industry demand;  
iv. mainstream adoption of environmental, social and governance (ESG) criteria in industrial 
development; and  
v. strengthen business ecosystem and institutional framework to increase efficiency and 
resiliency.  
5.1.3   Industry 4.0  
5.9.  In 2018, Malaysia put in place the National Policy on Industry 4.0 (Industry4WRD) which 
provides a concerted and comprehensive transformation age nda for the manufacturing sector and 
its related services. The policy is intended to accelerate transformation of Malaysia 's manufacturing 
sector into a smart and modern one. This will require an approach and an ecosystem to optimi ze the 
relationships amon g people, process and technology. The specific goals and targets will support the 
national vision for the transformation of the manufacturing sector by guiding and measuring 
Malaysia 's progress in improving productivity, strengthening the innovation capaci ty and capability, 
and driving the shift to a higher skilled workforce.  
5.10.   The broad strategies and action plans under Industry4WRD are intended to provide a holistic 
ecosystem that facilitates such digital transformation through five strategic enablers of Fu nding, 
Infrastructure, Regulatory Framework, Skills, and Talent and Technologies (F.I.R.S.T). The effective 
implementation of the policy would fulfil the following four national goals set for Industry4WRD 
by 2025:  
i. to increase productivity rate in the manuf acturing sector;  
ii. to increase the contribution of the manufacturing industry to the economy;  
iii. to increase the country's position in the Global Innovative Index; and  
iv. to increase the number of skilled workers in the manufacturing sector.  
5.1.4   National Automotive Po licy 
5.11.   The fourth version of National Automotive Policy (NAP 2020) was launched on 
21 February  2020. NAP 2020 intends to enhance the Malaysian automotive industry through the 
transformation of this sector into connected mobility. This is in line with the glo bal digital 
transformation experienced by all sectors of the industry.  
5.12.   The framework of the NAP 2020 adds on three new elements, namely:  
i. Next Generation Vehicles (NxGV), which are energy efficient vehicles (EEV) embedded 
with intelligent mobility technolog y with capability to go autonomous. The NAP 2020 set 
the year 2025 as the target for NxGV market penetration;  WT/TPR/G/436 • Malaysia  
 
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  ii. Mobility as a Service (MaaS), which is the evolution from personal transportation to 
mobility solutions that are consumed as a service. This enta ils development of sharing 
concept in transportation and logistics, multimodal transportation, connected living, 
telematics and e -payment; and  
iii. IR4.0, which is the enabler for NxGV and MaaS in manufacturing, after sales and services.  
5.13.   These new elements are being introduced into the strategies of NAP including promoting 
investments in green and autonomous technologies, deploying high level of technology and 
engineering, expanding market, as well as development of human capital and supply chain.  
5.1.5   Aerospace Indu stry 
5.14.   The Twelfth Malaysia Plan charts the way forward for the aerospace industry as a strategic 
sector to transform the nation into a major player in this industry.  
5.15.   To ensure the growth of the aerospace industry, the Government launched the Malaysian 
Aerospace Industry Blueprint (MAIB) 2030 in 2015. The second phase of the MAIB implementation 
has commenced under the Aerospace Industry Framework of the Twelfth Malaysia Plan. The 
implementation of key initiatives of MAIB has resulted in significant growth fo r the industry in 2019 
with the industry revenue recording MYR 16.2 billion  and employing 27,000 technical workers.  
5.2  Agriculture Sector  
5.2.1   Overview  
5.16.   Malaysia 's main agricultural outputs consists of industrial commodities such as palm oil, 
rubber, cocoa, pepper, and kenaf (dried stem) and agrofood produce such as rice, fruits, vegetables, 
livestock, and fisheries. The total agricultural land area is approximatel y 8.57  million  hectares, and 
the sector employs 10.5% of the labour force in Malaysia in 2020.  
5.17.   Malaysia has a trade surplus in agriculture with a value of MYR 20.4 billion  in 2020 mainly 
contributed by the export of commodities. Despite the positive trade balance, Malaysia is still a net 
importer of food items, primarily because of the high demand for animal feed, sugars, honey, meat, 
meat products, and vegetables to meet t he country 's food demand.  
5.2.2   National Agrofood Policy 2011 -2020  
5.18.   Throughout the 10 -year period of the National Agrofood Policy (NAP) 2011 -2020, the value -
added from agrofood sector has increased from MYR 35 billion  to MYR 51 billion . In terms of trade 
performa nce, the export of agrofood products has increased from MYR 18.1 billion  to 
MYR 33.7 billion . 
5.19.   The continuous growth of agrofood sector is driven by high demand of food produce to fulfil 
the increasing population and the needs of food processing industries.  Moving forward, the National 
Agrofood Policy 2021 -2030 is formulated with the aim to transform the agrofood sector into a 
sustainable, resilient and technology -driven industry in strengthening food security, driving 
economic growth and enhancing the wellb eing of the people.  
5.2.3   National Agrofood Policy 2021 -2030  
5.20.   The National Agrofood Policy 2021 -2030 (NAP 2.0) is a continuity of Malaysia 's food security 
and agrofood sector transformation agenda in the decade of 2021 -2030. The formulation of the 
NAP 2.0 conside rs current challenges including global climate change, resource scarcity, population 
growth, labour force competency as well as the need for food system transformation and national 
socio-economic development. The policy supports the aspirations of the agro food sector to be more 
sustainable, resilient and technology -driven to propel economic growth while prioriti zing national 
food security and nutrition.  
5.21.   The NAP 2.0 framework incorporates economic, social, and environmental elements as key 
principles with an  emphasis on moderni zation and smart agriculture, strengthening market and WT/TPR/G/436 • Malaysia  
 
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  product access, human capital development, food system sustainability, as well as creating 
conducive business ecosystems and governance. To increase the nation 's food security and i ncome 
of the food producers, 18 strategies and 58 action plans are being implemented across four 
subsectors of the agrofood sector comprising paddy and rice, fruits and vegetables, livestock, as 
well as fisheries and aquaculture.  
5.22.   To achieve these goals, mo dern technology adoption based on the 4IR to increase 
productivity, the participation of competent youths and increased private investment in high -impact 
projects, will be the catalytic enablers. The Ministry of Agriculture and Food Industries (MAFI) plays  
the leading role in the implementation and monitoring of the NAP 2.0 with collaboration and 
contribution from all stakeholders.  
5.3  Services Sector  
5.23.   The services sector continues to be the biggest sector in Malaysia 's economy, contributing 
more than 57% to tot al GDP in 2021. The services sector is driven by the traditional services 
subsector, while the modern services subsector has expanded, mainly contributed by the information 
and communication, finance and insurance as well as business services subsectors. I n addition, 
e-commerce activities have also contributed to growth as more Malaysians turned to online platforms 
to purchase goods and services.  
5.24.   With the aspiration of transforming Malaysia into a knowledge -intensive and services -driven 
economy, the Governm ent launched the Services Sector Blueprint (SSB) 2015 -2020. The SSB 
2015-2020 is a set of horizontal strategies and action plans to address obstacles which potentially 
hinder further growth of the services sector. Since its inception, SSB has achieved most  of its macro 
targets, which covered the following five areas:  
i. GDP contribution;  
ii. jobs created;  
iii. value -added per worker;  
iv. contribution of the knowledge -driven subsectors to GDP; and  
v. share of services under exports.  
5.25.   Under the Twelfth Malaysia Plan, the ser vices sector is targeted to grow at 5.2% per annum, 
contributing 58.3% to GDP by 2025. Concerted efforts will be undertaken to ensure higher adoption 
of technology to enhance efficiency and productivity within the sector in line with the Malaysia Digital 
Economy Blueprint and the National 4IR Policy.  
6  OTHER DOMESTIC POLICIES  
6.1  Companies Act 2016  
6.1.  The Companies Act 2016 which succeeded the Companies Act 1965, was passed by the 
Parliament in April 2016 pursuant to corporate law 's regulatory review and reform proc ess 
since 2003. It has been enforced by the Companies Commission of Malaysia (CCM) since 
31 January  2017 (except section 241 on mandatory registration of companies ' secretaries with the 
Registrar, and Division 8 of Part III on Corporate Rescue Mechanism). The new Act encapsulates the 
dynamic business environment in today 's global corporate scenario, as well as Malaysia 's consistent 
economic growth.  
6.2.  Subsequently, Divi sion 8 of Part III on Corporate Rescue Mechanism and section 241 of the Act 
was enforced on 1  March  2018 and 15  March  2019 respectively. Currently, CCM has introduced new 
policies for improvements including measures in improving the insolvency framework an d beneficial 
ownership reporting through amendments to the Act.  
6.3.  As temporary reliefs during the pandemic, provisions such as increasing the threshold for the 
company 's inability to pay its debts as well as other measures were introduced to alleviate finan cial WT/TPR/G/436 • Malaysia  
 
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  burdens faced by companies. As long -term measures, the reforms to the Act will introduce provisions 
to support companies to mitigate their risks in the following main clusters:  
i. widening the application of corporate rescue mechanism to allow certain cl asses of 
companies to adopt corporate voluntary arrangement or judicial management;  
ii. enhancing the framework in relation to restructuring and rescue mechanisms; and  
iii. enhancing the framework in relation to beneficial ownerships to fill in gaps as identified by 
the Financial Action Task Force (FATF) through the Malaysian Mutual Evaluation Report 
published in 2015.  
6.2  Competition Act 2010  
6.4.  Since 2019, the Malaysia Competitio n Commission (MyCC) has embarked on an amendment 
exercise for the Competition Act 2010 to make Malaysia 's competition law more extensive and in 
line with international best practices. The amendment of the Act includes the amendment of 
provisions relating t o the investigation and enforcement powers and procedures as well as appeal 
provisions, taking into account developments in the digital economy and the introduction of a merger 
control regime. The amendment will strengthen MyCC 's mandate in promoting compe tition in the 
market as well as empower MyCC to review mergers that will substantially lessen or distort 
competition in the market.  
6.5.  MyCC has undertaken various advocacy programmes to raise awareness and inculcate a culture 
of compliance with the Act. These  include conducting local and international advocacy programmes 
for various sectors of the economy and government bodies, signing memorandum of understanding 
(MoU) with agencies and public/private universities, implementing MyCC 's Strategic Plan for 
2021-2025, launching of the MyCC Guidelines on Intellectual Property Rights and Competition Law, 
and undertaking market reviews for various industries or market conditions. For the period from 
January  2012 to June 2022, MyCC has successfully resolved or closed 7 6% or 821 out of 
1,087 complaints, as well as investigated 153 complaints that have merits of infringement.  
6.3  Protection of Intellectual Property Rights  
6.6.  Within the period of 2018 to 2022, four intellectual property (IP) legislations were updated 
namely the introduction of the new Trademarks Act 2019 and Geographical Indications Act  2022 
together with amendments to the Patents Act 1983 and the Copyright Act 1987.  
6.7.  The Trademarks Act 2019 which entered into force on 27  December  2019, among others, 
allows Malay sia to implement trademark international filing system under the Madrid Protocol, 
expands the scope of trademark protection to include non -traditional marks, collective marks and 
certification marks as well as stringent penalties for infringements.  
6.8.  The ne w Geographical Indications Act 2022 has entered into force on 18  March  2022 to provide 
a better protection for registered geographical indications including stringent penalties for 
infringement, to allow electronic filing for geographical indications appli cations and to provide clearer 
grounds for refusal.  
6.9.  With the amendments to the Patents Act 1983, Malaysia (i)  adopts the Article  31bis of the 
TRIPS  Agreement , (ii) introduces third -party observation and (iii)  introduces post -grant opposition.  
6.10.   The amendme nts to the Copyright Act 1987, among others, allows members of collective 
management organi zation to refer any dispute between the members and CMO to the Copyright 
Tribunal, improves provision relating to CMO to ensure transparency, accountability and good  
governance, provides ex -officio act to search and seize any infringing copies that are prohibited from 
being imported into Malaysia and offences relating to streaming technology.  
6.11.   With regards to IP -related international treaty, Malaysia deposited the ins trument of accession 
of the Budapest Treaty and the Marrakesh Treaty on 31  March  2022 and these treaties entered into 
force in Malaysia on 30  June 2022.  WT/TPR/G/436 • Malaysia  
 
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  6.12.   In response to the COVID -19, Malaysia introduced fee waiver for certain requests for 
trademark and offered modification of renewal fee for registration that expired within the period of 
1 January  2021 until 30  June 2021. Surcharge fee for late renewal of patents were also waived for 
patent that expired within the period of 1  January  2021 u ntil 30  June 2021.  
6.4  Development of Halal Industry  
6.13.   The global Halal landscape is rapidly changing, as rising demand has resulted in the entrance 
of many new global players that offer Halal products and services. Hence, Malaysia 's Halal industry 
development will be strengthened to produce competitive Halal industry players in capturing a bigger 
global Halal market share.  
6.14.   Measures will be undertaken to enhance the capacity and capability to contribute to the growth 
of the Halal industry, increasing its share to GDP to 8.1% and generating MYR 56 billion  export 
revenue by 2025, through:  
i. uplifting the development of Halal talent;  
ii. establishing Halal professional recognition;  
iii. accelerating industry development;  
iv. increasing product competitiveness; and  
v. positioning  Malaysia as a global Halal hub.  
6.15.   During the first Halal Industry Master Plan 2008 -2020 (HIMP  1.0), initiatives were undertaken 
to ensure an integrated and comprehensive development of the Halal industry. Efforts were focused 
on the development of Halal st andards and certification, branding and promotion as well as 
commercialisation of Halal products and services.  
6.16.   Building upon the strength of HIMP 1.0, the Halal industry will be further developed by the 
new Halal Industry Master Plan 2030 (HIMP 2.0). HIMP  2.0 will be aligned with Malaysia 's 
development plans, the United Nations Sustainable Development Goals, and the United Nations 
Global Compact Principles.  
6.17.   The HIMP 2.0 aims to enhance Halal industry development by creating a larger talent pool, 
improving integrated infrastructure and accelerating the production of high value -added products 
and services to better capture the global Halal market opportunities, through:  
i. collaboration and co -investment between local and international businesses to 
commerciali ze R&D output;  
ii. enhanced role of MSMEs as a key driver for the development of the Halal industry;  
iii. inclusive participation in the Halal supply chain which will facilitate the expansion of high 
value products; and  
iv. Halal innovation -focused business incubator programmes to grow companies and connect 
with other business incubators globally for better networking, acceptance and recognition.  
6.5  National Tourism Policy  
6.18.   The National Tourism Policy 2020 -2030 focuses on effort s to increase revenue, secure smart 
international and national partnerships, empower local communities and ensure the sustainability 
and resilience of the industry. The implementation of the policy is based on three main elements, 
namely competitiveness, i nclusiveness, and sustainability as catalysts for the transformation of the 
country 's tourism industry.  
6.19.   This policy will be carried out through six strategic thrusts which are:  WT/TPR/G/436 • Malaysia  
 
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  i. strengthen governance capacity of tourism sector related agencies;  
ii. foster ec onomic development through the creation of special tourism investment zones;  
iii. move towards smart tourism through digitali zation and provide the necessary tools for the 
industry;  
iv. enhance demand sophistication through targeted marketing, diversifying cultur al tourism 
products, and improving destination attractiveness for high -value tourists;  
v. practice sustainable and responsible tourism; and  
vi. upskill the human capital to be future -ready and able to deliver a quality service.  
6.20.   These thrusts aim to make Malaysia the world 's preferred tourism destination, attracting 
high - yield tourists, with a focus on ecotourism and cultural tourism. This is consistent with 
Malaysia 's commitment to the SDG 2030 Agenda.  
6.6  National Policy on Science, Technology and Innovat ion 2021 -2030  
6.21.   The National Policy on Science, Technology and Innovation (NPSTI) 2021 -2030 demonstrates 
Malaysia 's commitment in utili zing and advancing science, technology and innovation (STI). NPSTI 
was launched in December  2020 as a 10 -year national STI plan that outlines six thrusts, 
20 strategies and 46 initiatives. In supporting trade, NPSTI aims to enhance domestic and 
international collaboration through science diplomacy and science, technology, innovation and 
economics (STIE) negotiation skills.  
6.22.   The National Technology and Innovation Sandbox (NTIS) is one of the programmes mandated 
under NPSTI which allow researchers, innovators and entrepreneurs to test their products and 
services in a live environment as well as to bring those products and service s to the market. NTIS 
relaxes certain regulatory requirements to accelerate the development of innovation from the R&D 
stage to being commercially ready.  
6.23.   The Malaysian Research Accelerator for Technology and Innovation (MRANTI) is another leap 
program und er NPSTI, tasked to accelerate commercialisation for Malaysian industry to penetrate 
global market. Among MRANTI 's supports for the industry are technology development, market 
access, prototyping, product testing and funding.  
6.7  10-10 Malaysian Science, Techn ology, Innovation and Economy Framework  
6.24.   In supporting the National Policy on Science, Technology and Innovation 2021 -2030, Malaysia 
launched 10 -10 Malaysian Science, Technology, Innovation and Economy (10 -10 MySTIE) 
Framework, a framework to identify the g ap between socioeconomic development and science, 
technology and innovation (STI) priorities. 10 -10 MySTIE is a tool to transform Malaysia into a 
knowledge -intensive economy by design and linking STI priorities to economy, in the hope of 
creating a collabo rative ecosystem to move Malaysia up the global innovation value -chain.  
6.25.   The framework helps to identify potential national STI priority areas. This includes Diversified 
Renewable Energy, Subscription Business Models and Sharing Platform, Integrated Infrast ructure 
and Infostructure Management and Next -Gen Smart Factories. The identified national priority areas 
help to facilitate trade and investment to achieve an inclusive knowledge -based economy across the 
Key Economic Growth Activities (KEGA).  
6.8  National Na notechnology Policy and Strategy 2021 -2030  
6.26.   The National Nanotechnology Policy and Strategy 2021 -2030 (NNPS) was launched on 
15 November  2021. NNPS aims to create a dynamic and progressive ecosystem for nanotechnology 
innovation in Malaysia. Malaysia aims t o be the preferred regional hub for nanotechnology in 
Southeast Asia and a strong player internationally, with a compound annual growth rate of 14.3% 
and expected market size for nanotechnology product reaching MYR 1.25 trillion  by 2030.  WT/TPR/G/436 • Malaysia  
 
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  6.27.   In addition, the National Nano Products and Technology Roadmap 2021 -2025 was launched 
on 13  April 2022 as a supporting document to the NNPS. The Roadmap aims to create more than 
30,000 employment opportunities especially for high -skilled workers and to contribute more than  
MYR 150 billion  to Malaysia 's GDP by 2025.  
6.9  National Policy on Biological Diversity 2016 -2025  
6.28.   As one of the 17 megadiverse countries, Malaysia 's biological diversity is among the richest 
in the world, harbouring an enormous range of plants, animals and ma rine life, which has created a 
unique ecosystem. While focusing on economic growth and development, the Government gives 
equal emphasis to promote biodiversity conservation.  
6.29.   The Government introduced the National Policy on Biological Diversity 2016 -2025 (N PBD) to 
serve as a national guide for biodiversity management over the next 10 years. It also reflects the 
Government 's effort and initiative to strongly and continuously emphasi ze on continued 
conservation, sustainable utili zation and shared benefits from  biodiversity in a fair and equitable 
manner, as well as to strengthen the involvement and participation of all relevant stakeholders. The 
NPBD will be reviewed to align with the Post -2020 Global Biodiversity Framework taking into account 
national prioriti es. 
6.10  Women and Youth Empowerment  
6.30.   Malaysia 's 2021 Global Gender Gap score for Economic Participation and Opportunity 
sub-index is 63.9% which is above the global average of 58%. Further to that, the Government is 
committed to continue ensuring the participation of women in the country 's planning and 
development by incorporating specific chapter for women empowerment in the Twelfth Malaysia Plan 
and 2022 Budget. Its ultimate goal is to minimi ze the gender gap and establish a conducive 
ecosystem for w omen which includes a quota for women in the decision -making positions, credit 
facilities for women entrepreneurs and support services such as capacity building programs, child 
care services and social security scheme.  
6.31.   In line with the national agenda to e mpower women, the Ministry of Women, Family and 
Community Development (MWFCD) continues to promote and encourage the implementation of 
gender responsive budgeting (GRB), and initiative that aims to ensure that the various perspectives 
of gender are integra ted into the formulation of national policies from the planning to the 
implementation stage.  
6.32.   In order to further empower youth and their political participation, the Parliament passed the 
Constitution (Amendment) Act 2019 to amend Article  119 of the Federal Constitution by granting 
suffrage to citizens aged 18 and above. The lowering of the voting age added 5.8  million  new voters, 
thereby enlarging the electorate to 21  million . This wider enfranchisement results in greater youth 's 
participation in dem ocracy and nation building.  
6.11  National Anti -Corruption Plan 2019 -2023  
6.33.   In recognition of the importance of good governance in attracting trade and investment, the 
Government has intensified the fight against corruption through governance reforms. In this rega rd, 
Malaysia remains committed to adopting good governance principles of transparency, accountability, 
efficiency and effectiveness in policy planning and delivery processes. The National Anti -Corruption 
Plan (NACP) 2019 -2023 was launched on 29  January  2019 with the aim to create a corrupt -free 
ecosystem, in line with the country 's commitment towards the United Nations Convention Against 
Corruption (UNCAC).  
6.34.   Malaysia also recogni zes the importance of corporate governance through the introduction of 
the Corpo rate Liability provision under Section  17A of the Malaysian Anti -Corruption Commission 
(MACC) Act 2009 that came into effect on 1  June 2020.  
6.35.   The following initiatives were also introduced to improve the transparency and efficiency of 
public service deliver y to enhance good governance across all aspects of government administration:  WT/TPR/G/436 • Malaysia  
 
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  i. Malaysian Licensing Guidelines (MyGP) launched by the Malaysia Productivity Corporation 
(MPC) in collaboration with the Governance, Integrity and Anti -Corruption Centre (GIACC) 
with the aims to authori ze a strong and effective mechanism in the permit and license 
issuance process;  
ii. Prime Minister 's Directive in implementing integrity vetting as (i)  a selection criterion for 
top management positions and (ii)  to govern disclosure of c onflict of interest in Statutory 
Bodies, Government Interest Company (GIC) and Government Established Company 
Limited by Guarantee (CLBG); and  
iii. MyGovernance, a comprehensive plan which will institutionali ze the principles and best 
practices of governance i n all Government agencies.  
6.12  Standards and Conformance  
6.36.   The national quality infrastructure (NQI) is one of the key elements underpinning the success 
of Malaysia 's trade and investment environment. The establishment of a robust NQI system, with all 
the necess ary components (standardization, metrology, accreditation, and conformity assessment, 
particularly testing, certification, inspection services, and market surveillance), stimulates industrial 
development, productivity, trade competitiveness and innovation.  Department of Standards 
Malaysia (JSM) as National Standards Body and National Accreditation Body together with National 
Metrology Institute of Malaysia (NMIM) as National Metrology Institute are the key institutions 
championing NQI in Malaysia, supported  by regulators and conformity assessment service providers.  
6.37.   JSM also assist industries ' marketability through its Standards Compliance Stewardship 
Programme for Enterprises (ESCAPE), conducted collaboratively with various strategic partners. This 
program e ncompasses technical training and expert advisory services ranging from the awareness 
phase to the compliance phase which is demonstrated through certification.  
7  WAY FORWARD  
7.1.  Despite the external economic uncertainties, the Malaysian economic recovery proces s is 
expected to gain momentum. The Malaysian economy returned to pre -pandemic level in the first  and 
second quarters of 2022 with eased restrictions on domestic activities and trade improvements.  
7.2.  Trade has historically been an engine of growth and will re main pivotal in Malaysia 's economic 
development goals. In this vein, we will continue to uphold an open, fair, transparent and rules -
based multilateral trading system with the WTO at its core, and support the efforts to strengthen 
the WTO through reforms a nd moderni zation.  
7.3.  The pandemic highlighted the importance of supply chain resilience. Moving forward, Malaysia 
is developing a resilient supply chain framework for manufacturing and manufacturing -related 
services. This involves identifying the risks, addre ssing vulnerabilities, and developing strategies to 
promote a resilient supply chain based on the lessons learnt during the implementation of the MCO.  
7.4.  Malaysia has identified six essential sub -sectors namely electrical and electronic, 
pharmaceutical, medic al device, automotive, food and beverage and advanced personal protective 
equipment (PPE) in developing the supply chain mapping. The main objective is to help facilitate the 
adoption of disruptive technologies such as "track and trace " through blockchain technology and 
predictive analysis to anticipate potential disruptive events across the supply chain.  
7.5.  Malaysia is working with other countries within the ASEAN and APEC region to strengthen 
supply chain resilience by facilitating effective cross -border mo vement and international cooperation. 
Malaysia is also a partner in the Indo -Pacific Economic Framework for Prosperity (IPEF) where supply 
chain resiliency has been identified as one of the four pillars.  
7.6.  The pandemic has also intensified the shift in cons umer behaviour and business model. To 
minimi ze future disruptions caused by similar crises and external shocks, our development initiatives 
outlined in the Twelfth Malaysia Plan, 2021 -2025 are geared towards providing an enabling and 
robust environment for  the growth of the digital economy, strengthening the provision of digital 
infrastructure and services, and developing future -ready digital talent.  WT/TPR/G/436 • Malaysia  
 
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  7.7.  In recognition of the move towards green economy, Malaysia will prioriti ze the adoption of 
environmental, so cial and governance (ESG) agenda in the manufacturing sector, in line with 
Malaysia 's net zero green -house gas emissions target by 2050.  
7.8.  By putting greater emphasis on these areas, Malaysia is optimistic that the objectives of the 
Twelfth Malaysia Plan, na mely resetting the economy, strengthening security, wellbeing and 
inclusivity as well as advancing sustainability can be achieved and bring about sustainable economic 
recovery.  
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