GENEVA: With less than two months to go before the United States presidential polls, concerns over the country’s foreign trade direction post-election have been intensifying.
Regardless of a Democratic or Republican win, a big question is whether the US will ramp up its trade protectionist agenda and push more trade barriers, especially on its rival China.
More importantly, will third countries like Malaysia be subjected to restrictions for products with high Chinese intermediate inputs from entering the US? To protect smaller third countries, a strong global multilateral trading system is highly vital.
In an exclusive interview with StarBiz, World Trade Organization (WTO) economist Eddy Bekkers said WTO has an important role to play in ensuring that trade policies that are introduced by the US and China will not involve third countries.
“In the event Malaysia is affected by indirect trade restrictions, the country can challenge the policies at WTO.
“It is, hence, essential that there is a multilateral trade organisation, namely, WTO that guarantees open and transparent international trade,” said Bekkers.
A week ago, the US announced the roll-out of new export controls on quantum computers, advanced chipmaking tools and high-bandwidth chips, among others, to China.
Beyond the US, its allies Japan and the Netherlands have also imposed export restrictions on advanced chip-manufacturing equipment to China.
Bekkers also highlighted that some countries in Asean, including Malaysia, have been benefiting from the geo-economic fragmentation and the fact that the United States and China have been introducing trade policy measures vis-a-vis each other.
“The trade policies, of course, give incentives for trade deflection and diversion.
“Asean countries, including Malaysia, must continue to maintain a fine balancing act in keeping open trade relations with the US and China,” according to the economist.
