KUALA LUMPUR: The United States is satisfied with the government’s efforts to curb the trans-shipment of products that do not originate in Malaysia, says Tengku Datuk Seri Zafrul Abdul Aziz.
The Investment, Trade and Industry Minister also said his bilateral meeting with US Trade Representative (USTR) Jamieson Greer had gone well.
“No issues on the trans-shipment side. We did not talk about issues that they are not happy with,” said Tengku Zafrul when met at the sidelines of the 57th Asean Economic Ministers (AEM) meeting on Thursday (Sept 25).
Trans-shipment is the routing of exports via another country to disguise their true origin.
In May, the Investment, Trade and Industry Ministry announced that it would be the only body that would issue non-preferential certificates of origin (NPCOs) for shipments to the United States.
This had stopped the issuance of these certificates by organisations appointed by the ministry, such as local business chambers, councils or associations.
The ministry had said this new measures aimed to eliminate loopholes that enable Malaysia to be used as conduits for goods seeking to bypass tariffs imposed by US trade regulations.
Meanwhile, Tengku Zafrul said Malaysia had raised concerns over sectoral tariffs imposed on industries such as semiconductors.
“We have to wait and at the same time, we have to continue to engage and explain how Malaysian and American companies based here and exporting to the United States actually complements the US ecosystem,” he added.
Greer, who was met by reporters earlier, said the semiconductor supply chain was complex and critical to the national security of the United States and Asean nations.
“So, we want to be careful and very thorough on how we address the international trade situation.
“We have to have the supply chain back in the US, but of course, South-East Asia remains an important source for the semiconductor supply chain,” said Greer.
Semiconductor exported from Malaysia to the United States remain exempt from the 19% reciprocal tariff that took effect on Aug 8.
But, the exemption for semiconductor products was still subjected to an ongoing probe by the United States under Section 232 of the Trade Expansion Act 1962 and tariffs could potentially be imposed depending on the outcome.
Last year, Malaysia exported about RM120bil worth of electrical and electronic (E&E) products to the US of which semiconductors made up RM60.6bil of that figure.
