How can Malaysia maximise benefits from its 17 FTAs?

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Malaysia's Strategy to Maximise Benefits from its 17 Free Trade Agreements

Malaysia is undertaking a comprehensive review and strengthening of its existing Free Trade Agreements (FTAs) to ensure they deliver tangible outcomes amidst a global economic landscape increasingly favouring domestic market protection. This strategic approach aims to maximise the advantages derived from the 17 FTAs Malaysia has established, moving beyond mere existence to active realisation of benefits.
Reviewing Existing FTA Effectiveness

The Malaysian government is initiating a systematic review of its FTAs, starting with bilateral agreements such as the one with Turkiye. This process involves assessing the benefits each party has received historically and identifying factors contributing to any imbalances in trade and investment flows. Such evaluations are crucial for understanding why FTAs may not be yielding the expected outcomes and for pinpointing areas for improvement.
Enhancing Trade and Investment Collaboration

A key component of Malaysia's strategy is to intensify collaboration with its FTA partners, particularly in light of a global trend towards more inward-looking economic policies. Direct engagement with the business community in partner countries is considered vital for gaining on-the-ground insights into the challenges faced and for building trust between trading partners. This direct dialogue aims to uncover reasons why trade and investment may not be flowing reciprocally as envisioned by the agreements.
Empowering Small and Medium Enterprises (SMEs)

Strengthening FTAs must be intrinsically linked with the empowerment of Small and Medium Enterprises (SMEs), which form the backbone of Malaysia's economy. While large corporations are necessary for bringing in new technologies, the focus is on enabling SMEs to leverage FTAs to expand their market reach into countries with which Malaysia has agreements. This is seen as a critical avenue for sustained economic growth and development.
Increasing SME Contribution to GDP

Currently, SMEs contribute 39% to Malaysia's GDP, a figure that has seen a modest increase of only 2% over the last decade, despite overall GDP growth of nearly 68% during the same period. Initiatives to enhance FTA utilisation are therefore aimed at boosting this contribution. Organisations like the Malaysia External Trade Development Corporation (MATRADE) play a role in assisting SMEs in accessing international markets, a function that is expected to become even more critical in the context of these strengthened FTA efforts.

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How can Malaysia maximise benefits from its 17 FTAs?

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