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Malaysia’s PM bats for reduced trade barriers

Malaysian Prime Minister Dato Sri Najib Tun Razak has urged member states of the Association of Southeast Asian Nations (ASEAN) to cut barriers to trade, including tariff and non-tariff measures (NTMs), while strengthening e-commerce in the region.

In his keynote speech during the Prosperity Summit for All on April 28 in Manila, which coincided with the 30th ASEAN Summit and Related Meetings, Najib pointed out that NTMs and non-tariff barriers (NTBs) have ballooned from 1,634 in 2000 to 5,975 in 2015.

“This cannot be tolerated. It has to be checked. It has to be reversed,” Najib was quoted by the Philippine News Agency.

“Non-tariff barriers and measures—or NTBs and NTMs—must be reduced and ultimately removed. This is a stubborn worldwide problem, but it is in ASEAN’s own interests to lead the way in this endeavor,” he added.

Najib noted that for the region to reach the projected US$9.2 trillion gross domestic product and become the world’s fourth largest economy by 2030, NTBs and NTMs should be slashed by 50%.

Average tariffs in ASEAN were about 4% in 2013.

“We have to bring down the trade barriers that are still existing,” the Malaysian prime minister said.

Philippine Trade Secretary Ramon Lopez, on the sidelines of the event, said he will recommend to ASEAN trade ministers to come up with guidelines and parameters that will serve as a “test for one to be able to justify non-tariff measures.”

“It will be a general rule that will be applied to all,” Lopez said.

Najib added that a 20% reduction in fixed trade cost should be achieved by the region in order to attain the goal of $9.2 trillion regional economy by 2030.

“Why is it that economic growth and economic size are so important? It is because only if you have a growing economy, then only you can ]only then can you?[ distribute prosperity and wealth. We want this prosperity to be shared by all. Without economic success, there is nothing to be shared,” Najib pointed out.

He also highlighted the critical role of digital technology in pushing micro, small, and medium enterprises (MSMEs) in the ASEAN to tap the e-commerce market.

Najib acknowledged the growing e-commerce market in ASEAN, with current Internet users expected to soar from 260 million at present to 480 million by 2020. The ASEAN e-commerce economy is projected to grow to $200 billion by 2025.

However, ASEAN only has a 1% share of total e-commerce transactions globally, compared to developed economies’ share of 10%.

“There is a great need to expand e-commerce in ASEAN, particularly among MSMEs, whose sales will benefit immensely from the exponential growth that it can offer,” Najib said.

“We must deploy digital technology, this powerful force of economic innovation, to help us make the leap into that great future that ASEAN promises, and ensure that it is one of prosperity for all,” he said.

To strengthen e-commerce and digital technology in ASEAN, it established an ASEAN e-Commerce Coordinating Committee, and signed the ASEAN-Japan Innovation Network in Tokyo this month. Other initiatives are the Digital Free Trade Zone and the National Single Window of each member state that will be seamlessly linked to the ASEAN Single Window and is seen to standardize customs procedures.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net



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