ASEAN has been urged to find ways for its member states to join hands together to cushion any possible fallout from the trade war between the United States and China.
Against the backdrop of an escalating trade war between the US and China, Deputy Minister of International Trade and Industry Dr Ong Kian Ming is advocating greater cooperation between ASEAN countries to package the region to foreign investors instead of focusing on country specific promotion.
He said Malaysia and it’s Asean counterparts should look at ways as a comprehensive unit to take advantage of this situation as investors might be interested in relocating and investing more in Malaysia as a result of this trade war.
Drawing reference to the strong two way cross border trade linkage in terms of investment and expertise exchange between Johor and Singapore, Ong said Malaysia should replicate this with other countries.
He also noted that interest from Chinese companies to invest in Malaysia, coming through the Malaysian Investment Development Authority, has risen since last year.
Instead of setting hub in Malaysia, Ong added that Chinese companies could use Malaysia as a connecting point to tap into the Asean market.
He opined that the trade war between US and China is less than likely to find a resolution in the short term and Malaysia, being an open economy will be affected by the trade duel.
In that light, Malaysia should be open to investments and ratify trade agreements such as RCEP and CPTPP, which are yet to be signed in order to strengthen its stance on remaining open to trade.
“As tariffs have gone down, the non-tariff measures has also gone down. That is why we need to have a greater push among the governments in Asean with the help of the business sector to come in and advice the government on the challenges they face so that we can remove or reduce some of the regulatory red tape with regards to the non-tariff measures,” he said referring to non-tariff barriers.
Ong said in that regard, ASEAN is working together to compile a database of non-tariff measures so that the trade bloc could gather some of the regulatory and bureaucratic issues faced by companies when setting shop in another ASEAN state.
International Trade and Industry Minister Darell Leiking urged all the relevant agencies in Malaysia to strive to reduce bureaucracy so as to facilitate more investments into the country.
He also asked for all chambers of commerce within ASEAN to stand together and start trading with each other during a meeting with members of the Malaysia-Thailand Chamber of Commerce (MTCC) earlier last week.
Retailers across the region do not see any immediate impact on their business; however, it is worth monitoring exchange rates, as RMB value might represent a variable to consider while working on price architecture.