TRADE BARRIERS AND REGULATIONS OF MALAYSIA

BY  # WEE MEI YING, SIM HUI FONG AND HONG FAN GUI

Trade barriers are the policy or government regulation to restrict the international trade. Malaysia’s international trade is regulated by two categories of trade barrier which is tariff and non-tariff trade barriers. 

This assignment named Trade Barriers and Regulation of Malaysia. In this assignment, we will explain on the trade policy of Malaysia from 1957 to 2003. Also, we will explain on the trade agreements of Malaysia. The discussion of tariff trade barrier and non-tariff barrier of Malaysia will also include in this assignment. Lastly, we will also discuss about the impact of trade barriers on Malaysia international trade, which is in terms of positive and negative sides.  

First of all, trade policy is defined as standards, goals, rules and regulations that pertain to trade relations between countries. These policies are specific to each country and are formulated by its public officials. Their purpose is to boost the nation’s international trade. Malaysia's trade policy is to create more liberal and fair international trade environment. In the text, we will explain more on Malaysia’s trade policy from 1957 to 2003. 

Secondly, to have a better understanding on how wide the trade barriers are, first we need to know about Malaysia trade agreements. A trade agreement is a wide-ranging tax, tariff and trade treaty that often includes investment guarantees. The most common trade agreements are of the preferential and free trade types are concluded in order to reduce or eliminate tariffs, quotas and other trade restrictions on items traded between the signatories. The trade agreements that joined by Malaysia including General Agreement on Trade and Tariff (GATT), World Trade Organization (WTO), Free Trade Agreements (FTAs), etc. 

Next, trade barriers is defined as a measure that governments or public authorities introduce to prevent or restrict overseas trade and investment. These measures need not necessarily take the form of legislation or a specific decision. They may also take the form of current practice. As a result of these measures, domestic companies will receive a competitive advantage relative to their foreign competitors. Trade barriers can be broadly divided into the following two categories, which are tariff trade barriers and non-tariff trade barriers. Examples of tariff trade barriers are import duties and export duties. Meanwhile, examples of non-tariff trade barriers are quota, embargo, government procurement, export subsidies and other restrictions. 

Lastly, we will focus on the impact of trade barriers on Malaysia international trade. Trade barriers can affect a country’s international trade in various ways. The impacts of trade barriers on Malaysia trade can be positive and negative. The positive impacts include protect local industries from competition and protect local job opportunities. However, the negative impacts include it will reduce consumer satisfaction and it will cause sour trade relations among nations. 

In conclusion, international trade is an important contributor to Malaysia's economic growth and development. In order to improve the economic growth and development of Malaysia, government should implement a more effective and efficient trade barriers and regulations in Malaysia. Hence, government play an important role in the portion of trade barriers and regulations for the country.