Economists: Opportune moment for Malaysia to encourage greater inter-Asean trade
PETALING JAYA: Increasing inter-Asean trade, as well as committing to a freer movement of trade and services in the region, should be prioritised in the wake of US tariffs, say economists.
They also urged Malaysia, as the Asean Chair, to take the lead in coordinating a reduction in tariffs and negotiate better trade agreements among its members.
This comes as the Prime Minister Datuk Seri Anwar Ibrahim said on Friday that he was coordinating a mutual response from Asean towards the tariffs.
Anwar also met with Indonesian President Prabowo Subianto in Putrajaya yesterday to discuss various issues, including tariffs.
Professor Dr Ahmed Razman Abdul Latiff said Malaysia, as the Asean chair, should proactively encourage higher trading activities between Asean members to reduce reliance on the US market.
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“This is on top of optimising cooperation among Asean members in unilateral trade agreements like the Regional Comprehensive Economic Partnership, Comprehensive and Progressive Agreement for Trans-Pacific Partnership and BRICS,” he said.
He said Malaysia should also take the lead in negotiating better trade agreements in conjunction with the Asean Finance Ministers’ meeting this week.
“This is especially for industry sectors that will be affected by the tariff,” said Ahmed Razman, who is attached with the Putra Business School.
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He also urged discussions to be held “soonest” with the United States, adding that it is unfair for Malaysia to be imposed a 24% tariff when the trade deficit with the United States has been gradually decreasing each year.
“Domestic spending also needs to be encouraged further,” he said, adding that this could be done by reducing Bank Negara’s overnight policy rate by 25 basis points.
Economist Geoffrey Williams said inter-Asean trade should be promoted alongside prioritising the free movement of goods, services, employment and capital.
“But there are trade barriers even among Asean countries.
“Hence, this is a long-term reform process and not a short-term response to US tariffs,” said the founder and director of Williams Business Consultancy Sdn Bhd.
He said Malaysia should show leadership during the Asean Finance Ministers’ meeting and provide a coordinated reduction in Asean tariffs.
“In addition, a commitment to freer movement of goods, services, people and capital should be prioritised to cover all countries, especially the United States, as well as Asean members,” Williams said.
Sunway University economics professor Dr Yeah Kim Leng said intensifying trade and increasing market access across bilateral and regional free trade agreements while continuing to negotiate with the Trump administration are appropriate counter-strategies.
He was responding to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz’s statement that Malaysia had diversified its export markets and engaged in free trade agreements with various countries as well as focused on increasing trade among Asean countries.
“Additional measures could include close monitoring and engagements with industries and firms that will be impacted by the tariffs to determine their nature and severity, besides the support required from the government to avoid scenarios of shutdowns and job losses,” he said.
Yeah suggested seeking clarification on tariff line items and the possibility of redirecting exports from the United States to other markets in case the tariff impact on specific industries turns out to be significant.
On Friday, Anwar said he had held a discussion with several leaders from Asean countries including Indonesia, the Philippines, Brunei and Singapore.
The aim of the talks was to share views and coordinate a mutual response to the issue of new reciprocal tariffs from the United States.
As the chair of Asean, he said Malaysia remains committed to fostering consensus among mem-ber states and upholding the principles of fairness and equity in all trade negotiations, including in Asean-US dialogue frameworks.
