Trade Policy Review – Malaysia 2010

The paper reviews the recently completed Trade Policy Review for Malaysia. We find that in the case of Malaysia trade has been liberalised and subjected to structural changes to a very high extent over the last three decades. However, reform has been less effective when it comes to trade-related policies such as investment policies and other national policies that de facto rather than de jure affect competition due to differential treatment of different firms, brands and individuals. This is also mirrored in the faltering levels of investment in Malaysia. An area where Malaysia has been successful is the reorientation towards services. A good example is the tourism industry which is mature and a major export industry in Malaysia today. Nascent service industries such as health, finance, ICT related services and education hold promise to become important export earners in the future. The paper shows that for this new phase of structural change to be truly successful Malaysia must prioritise trade negotiations and integration with her own region and especially ASEAN.