DEPUTY International Trade and Industry Minister Dr Ong Kian Ming sat down with StarBiz to speak on a number of issues pertaining to international trade and manufacturing in Malaysia.
Below are excerpts from the interview with MERGAWATI ZULFAKAR and JAGDEV SINGH SIDHU.
Neighbours are attracting quality investment – ie Dyson going to Singapore. What is Malaysia doing to attract more FDI from abroad?
We should not look at a narrow perspective on the issue of Dyson going to Singapore. When Dyson announced its decision to make electric cars in Singapore, the statement said it wanted to take advantage of the regional supply chain and when it came to Dyson manufacturing activities, definitely Johor will be included in the equation. Right now, although Dyson manufactures motors for vacuum cleaner and other appliances in Singapore, the assembly and the components are being manufactured in Johor.
I expect the same to occur for this electric car, in fact our Dyson has a R&D facility in Johor which employs 2000 people. So, the notion that this is a zero-sum game whereby Dyson goes to Singapore it means Malaysia lose out is not accurate. We do benefit because there is a spillover effect to Malaysia.
The Government has indicated it will review the National Automotive Policy (NAP). What will the review entail?
The last time a review was done was in 2014 and the condition of the automotive sector then and now not only in Malaysia but globally is quite different. You did not have the push for an auto driving vehicle, a push that we see in many developed countries and in China for electric vehicles and also the surrounding eco system.
It is timely for us to review the NAP and these additional elements will be put into the NAP including what is our policy in terms of encouraging electric cars, hybrid cars, beyond what was put in 2014 which the focus then was on EEV.
Would the NAP review make it easier for the 3rd national car to justify its existence?
The NAP will definitely include where the 3rd national car will fit in. That is part and parcel of the review. Might (Malaysian Industry-Government Group for High Technology) under the Prime Minister’s Department is doing the main coordination and we are in regular contact to see how this can fit into NAP.
Many people see this as waste of time and money?
When it was announced, the exact amount of funding was not determined yet. The Prime Minister is overseeing this process. Let’s wait and see the direction he wants to take this national car project forward.
Where are we as far as FTAs (free trade agreements) are concerned?
Let’s talk about free trade as a whole, our existing FTAs, either bilateral or regional. This is an area where we continue to monitor very closely. At the same time, we are looking at signing or negotiating other FTAs.
The most important is RCEP (Regional Comprehensive Economic Partnership). We have made significant progress on this in terms of discussion with key countries. The negotiations will continue this year. We hope to see a conclusion by first half of this year.
On the existing FTAs, we are trying to see what room we have to restart EU-Malaysia FTA with a contentious issue now being palm oil and how this will feature in such a FTA. At the same time, the EU is having their election in the first half of this year, so that may delay the process of negotiating this FTA. We are adopting a more cautious approach and at the same time, we do recognise the benefits of previous FTAs that have brought to Malaysia.
But CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) has been concluded? Will Malaysia ratify?
The government has not made a decision whether or not we will go on the ratification process. You have to wait for when the government will make the announcement on this. The Prime Minister will do it.
What is holding it up?
There were concerns raised when we were in the Opposition on issues like the Investor Settlement Dispute Mechanism. The Prime Minister is still weighing the extent to which this would impact our position in CPTPP.
You talk about having a trade policy and if you were not ratifying this, they will not be in sync?
You can have a trade policy without necessarily having to ratify or to have to sign to on additional FTAs. We can still trade with countries that we don’t have FTA with... the US is our third largest trading partner but we don’t have an FTA with them.
When you come up with policy how to drive trade, does having FTAs sort of smoothen the process?
That is part and parcel of our trade policy but we have to be flexible.
Let’s say some of the FTAs are not wrapped this year, then we have to look at other strategies in which we work on to increase our trade with our strategic partners
How does the trade policy jive with our needs to increase investment in Malaysia?
Trade is exporting, attracting investment into Malaysia. I would say this, there are synergies there when we invite FDI in the manufacturing and manufacturing services sector. The understanding for most of these investments is that a large part of that is exported. So, this does not only give more jobs for us in Malaysia, more R&D, more economic activities, but it also improves our trade balance. We also recognise sometimes Malaysian companies investing outside Malaysia can also be helpful to Malaysian companies in terms of exports. Like if they relocate outside, they would like buy more goods from Malaysia. That will improve trading relationship and trade balance
What is your view on Asean and Pakatan government’s stance on Asean integration?
It is clear right from what Prime Minster what has been said and done in the last seven months, we are committed to Asean. We see it as integral part not just our foreign policy but also economic, social, security policies as well. The Asean meetings continue in Thailand this year. We are looking forward to working with the Thai government on how to strengthen the relations within Asean on a number of matters.
When you were appointed as the deputy Miti minister, you dealt with ministers like Datuk Seri Mustapa Mohamed and had an idea how ministries work. Now you are in this position, do you see things differently?
Now I know in great detail the very large scope that Miti oversees. As the member of the opposition, you will know of some of the policies a ministry like Miti are announcing through the former minister. Once inside, I found out there are a lot of nitty gritty things that we need to attend to from a policy perspective. Continually trying to make ourselves relevant to our stakeholders is the kind of improvement that we need to undertake, not just for Miti but other agencies as well.
From Miti’s perspective in order to improve your relevance to stakeholders, what is doing Miti doing differently now than it did before and where is the focus?
One area is to see how we can be more efficient in the issuance of the certificate of origin (COs) which is very important in FTAs and giving preferential tariff arrangements with our trading partners. This is an area we want to see if new technologies can be introduced to track the approval of COs but ensuring there is greater security in the process of applying for the COs and getting the necessary paperwork for the other aspects of exporting that requires Miti’s intervention and approval.
There seems to be competition between Ministry of Entrepreneur Development (MED) and Miti with MED talking about trade and investment under its wings. Where does that put Miti?
Different ministers from different ministries are free to see how they can cooperate with Miti but the various statutory acts are quite clear, for example the Promotion of Investment Act states the minister of Miti is the one that signs off the incentives that are given.
So other ministries they can propose ways they want to work with us, in terms of promoting trade and investment but in terms of the authority, where the policy sits then it would be under Miti.
MED keeps on insisting trade and investment should be under them?
The MED minister is free to cooperate with Miti on ideas that he may have but the authority is quite clear.