Miti Blog

Ministry of International Trade and Industry Malaysia Official Blog

MALAYSIA

Posted by admin2 on June 17, 2015 at 3:29 pm

01







MALAYSIA

More considerations will show a better perspective of TPPA impact on Malaysia’s domestic value-add

 

• A research paper by an UNCTAD staff on the implications of Trans Pacific Partnership Agreement (TPPA) on Malaysia using domestic value-added (DVA) exports analysis contends that Malaysia will experience a deterioration in its balance of trade with TPPA partner countries.

• However, other studies on TPPA making use of computable general equilibrium (CGE) models have shown that while there will be losers post-TPPA, Malaysia has always been cited as one of those standing to gain.

• It is worth noting that the study used dated dataset which may have distorted the findings. The study could have been expanded to include an obverse scenario of the repercussions if Malaysia chose not to sign the TPPA, which in our opinion would lead to a bigger net loss to the nation.

• We would balance the DVA study by highlighting the positive impact of the TPPA on the growth potential of services export, which by nature, has high DVA. Malaysia’s ICT industry for example is regionally competitive, as reflected by the recent listing on Nasdaq of MOL Global, the biggest payment service provider in South East Asia.

• That the DVA study be updated in due course to reflect different assumptions and changing structure of the economy. It should evolve over time, much like CGE models have.

• MIDF Research’s view is that amid the secrecy surrounding the negotiations and the fact that discussions are still on-going, it is hard to make a complete and fair impact assessment of the TPPA.

STUDY ON TPPA

Contentious view, misleading in terms of authority. In a working paper by a staff of UNCTAD titled “Trans Pacific Partnership Agreement: Implications for Malaysia’s Domestic Value-Added (DVA) Trade”, the author Rashmi Banga raises pertinent issues pertaining to the implications of joining the TPPA. The conclusion is rather contentious, with the author arguing that Malaysia will experience a decline in its DVA exports of USD17b on average per annum, and that this will lead to deterioration in its balance of trade with TPPA partner countries.

However, it is the personal view of the author and does not reflect the view of UNCTAD or its member states. Indeed, the paper was actually authored under the aegis of the Centre for WTO Studies, which is based at the Indian Institute of Foreign Trade and has no affiliation whatsoever with the WTO. It certainly does not reflect the view of the WTO.

DVA analysis proclaims smaller value added contribution. The study by Ms Banga highlighted that Malaysia’s DVA has been declining against all major TPPA members, with the maximum decline recorded with the US. The study suggests that post tariff liberalization, Malaysia’s exports will increase from US$93.7 billion to US$95.2 billion but imports will rise much faster from US$73.8 billion to US$76.8 billion, causing the balance of trade (BOT) to remain in surplus but deteriorate by about US$1.4 billion per annum. In DVA terms the decline is expected to be more severe, with DVA exports falling US$17b p.a and potentially swinging BOT with TPPA partners into deficit. Nonetheless, the study made a point that Malaysia is not the only losing partner from the DVA angle. It appears that only the U.S, Japan and New Zealand stand to gain under this analysis (the study excluded Peru and Brunei due to significant data gaps).

03

 

 








 


 


Departure from the common CGE models: Ms Banga’s DVA analysis is a departure from the CGE-based analysis commonly employed in the studies of trade agreements. Most CGE-based analysis converge on the idea that smaller countries like Vietnam, Peru and Malaysia stand to benefit the most from the TPPA [see Petri et al (2011), Petri and Plummer (2012) and Cheong (2013)].

Petri and Plummer (2012) of Peterson Institute for International Economics, using CGE modelling in their study, show that the TPP (at that time involved only 9 countries) can generate annual global income gains of $295 billion, with Vietnam projected to enjoy the largest percentage gains at around 14% as it would likely expand as a manufacturing hub. By 2025, if fully realized, the TPP could mean a 0.53% increase in global GDP with that of Malaysia expected to rise by 4.7%.

Meanwhile, a study by Cheong (2013) published by the Asian Development Bank (ADB) has estimated the impact of the TPPA on gross domestic product and found that most member countries would experience moderate economic gains from joining the free-trade bloc. New Zealand, Mexico and Malaysia would likely benefit the most from a successful agreement involving all 12 members, with GDP projected to rise by 0.97%, 0.9% and 0.7% respectively.

Banga argues that CGE modelling overlook the impact of Global Value Chains (GVCs) and the resultant effect on intermediate goods imports. Ms Banga has argued that the CGE-based studies overlook the fact that with greater trade integration, more so under the TPPA, exports of one member country may be part of the whole supply chain involving exports of another, Hence, the rise in exports estimated by a typical CGE model under trade liberalization may not be fully translated into rise in output and employment but may actually be smaller due to greater “leakages” i.e. imports from partner countries. A rise in DVA exports is important for a country in order to get the commensurate production-linked gains of exports on sectoral, employment and in turn, GDP.

 

WIDENING THE PERSPECTIVE OF THE DVA ANALYSIS

Ratio of imported to total intermediate input in the I-O table declining:We note that Ms Banga’s analysis made use of data up to 2009 to simulate the 2013 results, which she used as the main finding based on the coefficients and multipliers derived from the Input-Output (I-O) table for the year 2000 extracted from Beckhet (2011). However, the Department of Statistics has already made available the I-O table for year 2005. The 2005 IO table shows that the ratio of imported intermediate inputs to total inputs for the overall economy had actually fallen from 50.5 in 2000 to 32.65 in 2005. Indeed, the ratio for Manufacturing had indeed declined significantly from 55.8% in 2000 to 39.6% in 2005. On this note, we believe Ms Banga may derive a different conclusion in her analysis had she used the I-O table for 2005.

19

Latest trade statistics also show further decline in intermediate imports:The latest Malaysian trade data shows that imports for intermediate goods as a percentage of total exports of goods and services had declined from 50.8% in 2007 to 47.1% in 2013 (see table).

21

DVA analysis on the impact of trade liberalization is not new, and will evolve in time. Although Ms Banga claimed that her paper is the first to use the Trade in Value-Added Gravity model, the concept of separating the DVA from total exports is not new. An earlier study done by Gonzalez (2012) with the Swiss National Centre of Competence in Research had employed this approach in his analysis of intermediate imports. The important point to appreciate is that the availability of updated data, different assumptions and changing structure of the economy may yield different result using the same model. That has been the case with CGE model-based analysis over the years, which have differed greatly in assumptions, estimates and findings. Thus, we can expect more studies in the future using the same DVA-based approach as that in Banga (2014), but with different views and findings.

TPPA should expand the growth potential of services export: Export of services, by nature, has high DVA content. Although the services account in Malaysia’s balance of payment is still in the deficit, the growth of services export has been strong and is outpacing services import. Services export grew 8.4% in 2013 compared with 7.8% growth for services import. In 1H14, the corresponding growth was 5.5%yoy vs 2.8%yoy respectively. We believe that services export can continue to grow, driven by for example the ICT industry. Malaysia’s ICT players are regionally competitive. Technology IPOs in South East Asia are dominated by companies from Malaysia and Singapore. In October, a Malaysian company, MOL Global, one of the biggest internet companies in South East Asia was listed on Nasdaq in October. Malaysia is recognized as having an established technology ecosystem which owes its growth to the Multimedia Super Corridor introduced in 1996. There is a vibrant start-up scene in Malaysia with generous government incentives for tech entrepreneurs. Much of this is due to the fact that mobile penetration rate is very high in Malaysia. In 2013, it was the third highest in East Asia, behind only the city states of Hong Kong and Singapore, and was even higher than that in the U.S, U.K and Japan (Source: World Bank World Development Indicators 2014).

What is the impact of Malaysia being a non-party to TPPA? It would be interesting if Ms Banga were to extend her DVA analysis to address the obverse scenario. This would be an analysis of the impact on Malaysia’s trade and production if it decided NOT to participate in the TPPA. According to Petri et al (2012), “preference erosion” and “trade diversion” are likely side effects of deals like these on non-participating countries. They have estimated that by 2025, the TPP could mean losses of US$46.8 billion for China, and roughly $4 billion for India, Indonesia, and Thailand. Cheong (2013) argued that the non-TPP ASEAN, namely Cambodia, Lao PDR, Myanmar, Indonesia, Thailand and Philippines are likely to face increased competition with non-ASEAN TPP members and may face losses from implementation of the TPP.

The reality is that the impact of TPPA on trade and in turn, growth on specific countries is actually hard to predict as acknowledged by the EU Directorate-General for External Policies and many others when they attempted to derive the findings from their analysis. TPPA negotiators are governed by confidentiality; as such, estimating the full potential impact on member countries is rather difficult as negotiations are still ongoing.

We believe policymakers are taking heed of both positive and negative findings to assist them in making a more informed decisions. As the negotiations are still ongoing and there will be more and more studies on the impact of TPPA is likely to emerge (although not necessarily focusing on Malaysia), we believe that the government is treading carefully and weighing the risks from every possible angle when negotiating the terms. Prime Minister Datuk Seri Najib Tun Razak last month reiterated the government’s stance on the TPPA issue that “.. Malaysia wants to be part of it, provided our concerns can be accommodated in the final outcome”

 

31

42

54

 


18158 comments for this post

Posted on November 26, 2022 at 4:29 pm
 
Great info. Lucky me I discovered your website by chance (stumbleupon). I have saved as a favorite for later!

http://ya4r.net/go.php?url=http://anma5augustbrga741.bearsfanteamshop.com/how-to-explain-suwonchuljang-to-your-boss

Posted on November 26, 2022 at 4:06 pm
 
I'm excited to discover this website. I want to to thank you for ones time just for this wonderful read!! I definitely liked every part of it and i also have you bookmarked to look at new information in your blog.

https://controlc.com/b4856362

Posted on November 26, 2022 at 3:47 pm
 
I needed to thank you for this great read!! I certainly loved every little bit of it. I have got you book marked to look at new stuff you postÖ

http://ghaziabad.rackons.com/user/profile/474679

Posted on November 26, 2022 at 3:47 pm
 
An intriguing discussion is definitely worth comment. I do believe that you ought to publish more on this issue, it may not be a taboo subject but typically folks don't discuss these topics. To the next! All the best!!

http://rd.am/www.crystalxp.net/redirect.php?url=https://www.wishlistr.com/profile/casino3a1setos377

Posted on November 26, 2022 at 3:12 pm
 
May I simply say what a relief to find a person that really knows what they are talking about on the web. You definitely understand how to bring an issue to light and make it important. A lot more people have to look at this and understand this side of the story. It's surprising you are not more popular given that you surely have the gift.

http://www.c9wiki.com/link.php?url=https://writeablog.net/y5enysj481/h2-health-benefits-of-massage-h2-massage-has-many-health-benefits

Posted on November 26, 2022 at 3:03 pm
 
This site was... how do you say it? Relevant!! Finally I have found something which helped me. Cheers!

https://public.sitejot.com/bulbedge04.html

Posted on November 26, 2022 at 2:46 pm
 
Itís difficult to find well-informed people about this subject, however, you sound like you know what youíre talking about! Thanks

http://www.briskbi.com/mybb/member.php?action=profile&uid=9425

Posted on November 26, 2022 at 2:01 pm
 
You're so interesting! I don't think I've truly read through anything like that before. So nice to discover somebody with some genuine thoughts on this topic. Really.. many thanks for starting this up. This website is something that is required on the web, someone with a bit of originality!

https://zippyshare.com/temponest8

Posted on November 26, 2022 at 1:13 pm
 
This page truly has all the information and facts I needed concerning this subject and didn’t know who to ask.

https://blogs.nmit.ac.nz/showcase/question/the-best-ways-to-mp3-download-music-for-free/

Posted on November 26, 2022 at 12:18 pm
 
Greetings! Very useful advice within this post! It is the little changes which will make the greatest changes. Thanks for sharing!

https://www.folkd.com/submit/www.hangugop.com/gumi/

Posted on November 26, 2022 at 10:15 am
 
After looking over a handful of the blog articles on your website, I honestly like your way of blogging. I saved as a favorite it to my bookmark site list and will be checking back in the near future. Please check out my web site too and tell me what you think.

https://www.bookmarking-keys.win/5-qualities-the-best-people-in-the-suwonchuljang-anma-industry-tend-to-have-1

Posted on November 26, 2022 at 8:51 am
 
This is the right blog for anybody who hopes to find out about this topic. You realize so much its almost hard to argue with you (not that I actually would want toÖHaHa). You certainly put a new spin on a topic that has been written about for years. Great stuff, just great!

https://www.fastbookmarks.win/the-anatomy-of-a-great-suwonchuljang

Posted on November 26, 2022 at 6:02 am
 
This is a topic that is near to my heart... Many thanks! Exactly where are your contact details though?

https://wiki-coast.win/index.php?title=13_Things_About_???????You_May_Not_Have_Known

Posted on November 26, 2022 at 3:57 am
 
Thanks for publishing this great article without doubts is very useful

https://insurancefastfinder.top/insurance-31130.html

Posted on November 26, 2022 at 3:45 am
 
I used to be able to find good information from your blog articles.

http://seesaawiki.jp/t/external-link/?url=https://writeablog.net/korea0i1qcsah099/h2-how-essential-oils-enhance-aromatherapy-massage-h2-a-great-way-to

Posted on November 26, 2022 at 3:14 am
 
After I originally left a comment I seem to have clicked on the -Notify me when new comments are added- checkbox and from now on each time a comment is added I get 4 emails with the exact same comment. There has to be a means you can remove me from that service? Thank you!

http://www.memememo.com/link.php?url=https://penzu.com/p/af9c7b39

Posted on November 26, 2022 at 12:50 am
 
Greetings! Very useful advice within this article! It's the little changes which will make the largest changes. Many thanks for sharing!

https://download-mp338237.popup-blog.com/16899807/music-principles-explained

Posted on November 25, 2022 at 11:10 pm
 
There's certainly a great deal to find out about this issue. I really like all of the points you have made.

https://notes.io/qjdSE

Posted on November 25, 2022 at 10:41 pm
 
I absolutely love your blog.. Pleasant colors & theme. Did you develop this amazing site yourself? Please reply back as Iím trying to create my own personal site and would like to find out where you got this from or exactly what the theme is called. Thanks!

http://www.automaniasiouxfalls.com/LinkOut/?goto=https://sergiobhqx286.edublogs.org/2022/09/20/meet-the-steve-jobs-of-the-ec8898ec9b90ecb69cec9ea5ec9588eba788-industry/

Posted on November 25, 2022 at 9:53 pm
 
Pretty! This has been a really wonderful post. Thanks for providing these details.

http://www.sa-live.com/merror.html?errortype=1&url=https://sergiobhqx286.edublogs.org/2022/09/20/meet-the-steve-jobs-of-the-ec8898ec9b90ecb69cec9ea5ec9588eba788-industry/
More Comments

Type Your Search Here

Tags

4PU ACEAN AEC AFAS AFTA AKI APEC ARBC ASEAN ASEAN Business Advisory Council (ABAC) ASEAN Regional Business Council ASEAN- India FTA ASEAN-India FTA AirAsia Alternative medicine Andrew Robb Anti- Dumping Anugerah Kecemerlangan Industri Apollo Hospitals Apparels Apps Store Asean Economic Community Asean Framework Agreement on Services Asian Development Bank Australian Minister for Trade and Investment Automotive Industry Axiata BDO BNM Babar Ali Khan Bangladesh Bank of China Bogor Goal Brazil Budgets Bumiputera CEO CEPT CHINA CIDB CIMB COO Caexpo Cement and Concrete Association (C&CA) Channel News Asia Chemical Company of Malaysian Berhad (CCM) Chile China China-ASEAN China-ASEAN FTA Confederation of Indian Industry Conference Construction Industry Development Board Consumers DIGI DOHA Dato' Seri Mustapha Mohamed Datuk Dr Rebecca Sta Maria Datuk Hamim Samuri Datuk Ir Hamim Samuri Datuk Jacob Datuk Mustapa Mohamed Datuk Naimun Ashakali Mohammad Datuk Seri Mustapa Mohamed Datuk Seri Mustapha Mohamed Datuk Seri Najib tun Razak Doha Development Agenda ELV Policy EPU ETP Economic Planning Unit Economic Policy Leaders programme Economic Transformation Program Economic Transformation Programme Economy Eelco Eksport Eksports Eports European Commission (EC) Events Export Exports FDI FOKEM FTA Federal Governmen Federation of Malaya Fiscal policy Committee (FPC) Food Forbes Foreign direct investments Foreign investments Forum Ekonomi Dunia GDP GE GST GTP Global Market Globecycle Goods and Services Tax Government Transformation Programme Groom Big HACCP-certified HDC HP Halal Halal Development Industry Halal Development Industry Corporation Halal Industry Development Corp Halal Ingredients Asia 2015 Hoekstra ICT IJM Corp Berhad IMD INSKEN INVESTMENT MISSION IPI IT Import Imports India Indian Commerce and Industry minister Nirmala Sitharaman Industries Industry Information and Communication Technology (ICT) Infrastructure Development Finance Company Institute for Management Development International Trade and Industry InvestKL Investents Investment Investments Jabatan Kemajuan Islam Malaysia Jakim Jeli Jepun Jom Masuk IPT (KPTN 2015) KELANTAN KSU Karnival Karnival Pendidikan Tinggi Negara Khazanah Nasional Khazanah Nasional Bhd Kulim Hi-Tech Park LIMA LIMA'15 LNG Laporan World Competitiveness Yearbook (WYC) Lawatan Lembaga Pembangunan Industri Malaysia Lexus MAI MATRADE MAlaysian Economy MGCC MIDA MITC MITI MITI Deputy Secretary-General MITI Report MITI Weekly Bulletin MITI Weekly Bulletin trade MITI report MITI weekly Bulletin MITI] MNC MOF MPC MTFTA Malaysia Malaysia Airports Holdings Berhad Malaysia Automotive Institute Malaysia Economy Malaysia Entrepreneurship Forum 2015 (MEF) Malaysia External Trade Development Corp Malaysia External Trade Development Corporation Malaysia International Halal Showcase Malaysia-China Trade Malaysia-India Comprehensive Economic Cooperation Agreement Malaysian Airlines Bhd Malaysian Economy Malaysian Industrial Development Finance Bhd Malaysian Palm Oil Board Malaysian Report Malaysian Standards Malaysian economy Malaysian pavilion Manufacturing Manufacturing Industry Maybank Media Release Menteri Perdagangan Antarabangsa dan Industri Microsoft Mid Tier Companies Development Programme Minister of Commerce of China Gao yan Minister of International Trade and Industry Ministry of Finance Ministry of International Trade and Industry Miti Miti Report Miti Weekly Bulletin MyASEAN Internship Programme NAP NAP review National Automotive Policy Nestle Networking OIC OIC-Asia Trade and Economic Forum 2015 Organisation of Islamic Cooperation P Ravindran PEMANDU PEMUDAH PKS PLKN PPD Pameran Maritime dan Aeroangkasa Antarabangsa Langkawi 2015 Parts and Components Pembangunan Industri Halal Sdn Bhd Pengurusan Prestasi dan Pelaksanaan (PEMANDU) Perbadanan Perbadanan Pembangunan Industri Halal Sdn Bhd Perbadanan Pembangunan Perdagangan Luar Malaysia Performance Management and Delivery Unit Perjanjian Perdagangan Bebas Perusahaan Kecil dan Sederhana Petronas Play Store Policy Perspective Preferential Tariff Rate Program Pembiayaan Usahawan Wanita Program Transformasi Ekonomi Pusat Dagangan Antarabangsa Melaka Pusat Transformaasi Luar Bandar (RTC) Quality R&D RCEP ROO Ranhill Regional Comprehensive Economic Partnership Road Sectors Royal Vopak Russia SCE SDSI SIRIM SIRIM QAS International Sdn Bhd SME Bank SME CORP SME Corp SME corp Malaysia SMECorp SMEs SPS STA Sadguru Polymers Pvt Ltd & Triace Solution SapuraCreest Satu Daerah Satu Industri Securities Commision Service Industry Service Sector Service Sectors Service sector Service sectors Services Sector Services sector Shell Shell Malaysia Shell Malaysia Ltd(SML) Shell Refining Company Showcase Groom Big Sime Darby Singapore Corp Enterprise Small and Medium Scale Industries Sri Mustapa Mohamed Strategic Trade Bill Success Story Sunway Sunway Group THE 12th China-Asean Expo TM TOK BALI TPP TPP trade TPPA TTPA TV Show Tariff Elimination Temasek Foundation Tenaga Nasional Bhd's The 21th ASEAN Economic Ministers (AEM) The Economic Planning Unit (EPU) The Malaysian Investment Development Authority The New Global Context The World Trade Organisation (WTO Toyota Camry Trade Trade Figure Trade Performance Trade Review Trans Pacific Partnership Trans Pacific Partnerships Trans-Pacific Partnership Agreement UMW Corporation UMW Holdings Berhad UMW Toyota UNCTAD US Universiti Malaysia Kelantan (UMK) Untag Usahawan Bumiputera Vehicle End-of-Life Policy Voluntary Partnership Agreement (VPA) WCC WCY WEF WEP WHS WORLD ECONOMIC FORUM(WEF) EAST ASIA 2014 AND TRADE & INVEST WTO World Competitive Centre World Competitiveness Center (WCC) World Competitiveness Yearbook (WCY) World Economic Forum World Halal Conference 2015 World Halal Summit YB Dato' Sri Mustapa Mohamed ZICOlaw application auto automotive bangladesh bank negara malaysia bilateral relation biojisim biomass business business facilitataion business facilitation cars 15 years cement industry competitiiveness competitive competitiveness competitveness currency e&e economy education electrical electronics emerging market environment eport World Competitiveness Yearbook 2014 export exports felda food manufacturing fore foreign direct investments foreign trade forex free trade agreement green technology gross domestic product healthcare highway hong kong import imports india industries industry interest rates international standards investmen investment investments irAsia iron and steel japan jepun kdnk kelantan liberalisation logistic low carbon malaysia malaysian business manila manufacturing mecc metal sub-sector middle east mihas miti motor vehicles national green technology national timber policy non-Islamic nations non-tariff north africa packaging policy review portland cement proton public service delivery renminbi research and development retails road transport sales showcase small and medium enterprises small and medium enterprises (SMEs) sme sme corp sme corp malaysia sme master plan smi smidec syarikat berstatus multinasional tariff tax incentive textiles the Asociation of Southeast Asian Nations the electrical and electronics the government's 11th Malaysian Plan tnb tourism trade tradisional medicine tube programme usahaw value added visit wood wood-based products world economic forums