MIiti deputy secretary-general (international trade) Mastura Ahmad Mustafa.
KUALA LUMPUR: Global trade remains resilient despite the headwinds posed by policy uncertainty and geopolitics, with Malaysia to benefit as trade partners diversify their markets.
Investment, Trade and Industry (Miti) deputy secretary-general (international trade) Datuk Mastura Ahmad Mustafa said the country stands to benefit from geographical diversification while broadening its free trade agreement (FTA) network.
She also stressed Malaysia’s neutral stance in the ongoing trade war between China and the United States.
“As we continue engagement with the United States and China, we are aggressively diversifying our export market.
“Currently we are implementing 17 FTAs, and last year, we signed two FTAs, while concluding one FTA negotiation,” she noted.
“We signed the United Arab Emirates bilateral FTAs and enforced them in October last year,” she pointed out.
“With the European Free Trade Area, we signed it last year in June, but it has yet to be ratified. We have also concluded negotiations with South Korea, our bilateral FTA.”
There were also ongoing negotiations with the European Union, Canada and the Gulf Cooperation Council, in partnership with Asean.
“We are working to expand and create more markets for our exporters, while boldly expressing our interest in Brazil, Russia, India, China and South Africa,” she added.
Mastura also said Malaysia has also started trade relations with countries that it had few relations with. “We are focusing on emerging markets such as the Middle East, Latin America and Africa.
“We are also seeing stronger trade with markets like Kenya, Nigeria, Tanzania, Yemen, Algeria, Uzbekistan and Turkiye.
“This underpins our push to explore future FTAs with countries such as Bangladesh, Bahrain, the Southern African Customs Union and Eurasian economies like Uzbekistan and Kazakhstan,” she said.
According to the latest DHL Global Connectedness Index, global trade remains resilient and on an expansionary path, with Malaysia standing out as a top-performing economy.
The index projected global trade to grow approximately 2.5% annually from 2025 to 2029, said Julian Neo, managing director for DHL Express Malaysia and Brunei.
The index underscores that trade continues to expand rapidly, despite geopolitical tensions and protectionist pressures.
Neo said despite tariff-driven downgrades, the 2.5% growth outlook signals strong prospects for Malaysia, in line with its past decade’s trend.
He also highlighted Malaysia ranks 26th out of 181 economies and third in Asia Pacific. “This is attributed to strong trade flows and rising foreign and domestic investment (FDI) and domestic direct investment,” he remarked, amid shifting global supply chains.
Neo also identified that Malaysia’s high-growth status is supported by geographic tailwinds from the China Plus One/China Plus X strategy, rising FDI, and cost-driven near-shoring, friend-shoring, and off-shoring.
Luiz de Mello, an economist with the Organisation for Economic Co-operation and Development, said global value chains continue to integrate as measured by trade’s share of economic output, significantly expanding since the mid-1990s.
This has boosted productivity gains and sustained improvements in living standards. “One of the key drivers of Malaysia’s growth story has been its ability to benefit from the globalisation trend.
“Despite shocks from higher tariffs and tighter trade restrictions, trade data continue to show strong resilience,” de Mello said. He noted that tariffs have increased, citing that US tariffs averaged 14%.
“Those trade restrictions affect about 17% of world trade, and before the pandemic, it was about 4% of world trade.”
