Friday 29 Mar 2024
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KUALA LUMPUR: Starting Jan 1 next year, Malaysia will abolish import duties on 2,123 products including palm oil, base metal (iron and steel) and vehicles for Asean countries.

International Trade and Industry Minister Datuk Mustapa Mohamed said the move was in line with the Asean Free Trade Area (Afta) to further open up the country's market.

"Additionally, import duties will be reduced to 5% for tropical fruits, tobacco and tobacco products, while import duties for rice and rice products will be reduced to 20%," he said at the launch of the ministry's 2008 annual report yesterday.

Currently, import duties on tobacco and its related products range from 10% to 100%, while those for highly-sensitive products like rice are at 40%.

Mustapa said Prime Minister Datuk Seri Najib Razak's announcement on the deregulation of the Foreign Investment Committee (FIC) guidelines had made it easier for Malaysia to talk to foreign investors.

"Many countries are happy with what we've done," he said. "(The equity restriction) has been a sore point for investors including some foreign governments; with the removal of these obstacles, we are confident negotiations can proceed much faster.

"With respect to the FTA with the United States, we understand that US' priority is to ratify three bilateral FTAs with Panama, Colombia and South Korea," he said, adding that on Malaysia's part, Miti would continue to revisit its position on issues with partners.

"As for government procurement, we will continue to negotiate with our trading partners," he said.

The Miti report predicted that with the current volatile economic environment, Malaysian exports would continue to experience negative growth in 2009.

However, emerging regional export markets including West Asia, South Asia and Africa are expected to maintain their demand for electrical and electronic products (E&E), chemicals and chemical products and processed food from Malaysia.

The manufacturing sector, which contributed 70% of total monthly exports throughout 2008, is expected to continue leading the export sector.

For the rest of the year, E&E, crude and refined petroleum, liquefied natural gas, palm oil and crude rubber are expected to remain Malaysia's mainstay export products.

In 2008, Malaysia's total trade reached RM1.2 trillion, an increase of 6.8% from RM1.1 trillion a year earlier. Contributing to the increase were the manufacturing, agricultural and mining sectors.

Malaysia's top three major trading partners in 2008 were Northeast Asia, Asean countries and North America, accounting for 58.9% of total trade.

Total trade with Northeast Asia and Asean rose 6.9% and 6.7% respectively, while trade with North America declined 6.1% from 2007.

The partnership among Asean countries is also expected to be strengthened by its internal economic integration through the signing of several key agreements including the Asean Trade in Goods Agreement (ATIGA) and the Asean Comprehensive Investment Agreement (ACIA).

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