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International trade with WTO and AFTA

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Introduction

International trade with WTO and AFTA Participation in WTO, APEC and ASEAN, free trade arrangements, multilateral and bilateral negotiations and export promotion and strategies have been used as Malaysia's international trade policy mechanism to develop and promote trade. WTO is the sole international organization dealing with multilaterally agreed rules on trade among its member countries. Through WTO agreements, which spell out rights and obligations, member countries operate a nondiscriminatory multilateral trading system that has allowed world trade to grow. The goal is to help producers of goods and services, and exporters and importers, conduct their business in a manner that ensures predictability and stability. The WTO is also a forum for continuous negotiations to create a fairer, transparent, predictable, and liberal global trading environment. WTO agreements for trade in goods, agriculture and services spell out rules for member countries. Malaysia's commitment on goods includes binding of tariffs on 7,197 tariff lines, reduction of import duties, reduction of tariffs on agriculture products and elimination of duties for information technology products. Malaysia's commitments on services include allowing foreign participation in the services industry. AFTA, established in 1992, aims to increase ASEAN's competitive advantage as a production base geared for the world market by promoting intra ASEAN trade and industrial linkages, specialization and economies of scale; and attract more foreign direct investment (FDI) ...read more.

Middle

Strategies for Growth and Competitiveness Challenges for Malaysia include enhancing value creation through innovation and R&D, intensifying the use of ICT, raising the capability of small and medium-scale enterprises, strengthening domestic investment in high value-added activities and enhancing administrative and bureaucratic procedures to support the business environment. The following are important to enhance economic competitiveness: 1. Diversified and balanced economy 2. Ability to adapt rapidly to changes in production patterns, demand and competition 3. Technology capability - ability to adapt, innovate and invest 4. Strong and close industrial linkages, moved by productivity and skills To enhance and diversify the export market, it is imperative to tap export opportunities from FTA initiatives in ASEAN and other countries, collaborate with private sector in export of goods and services, research market and train and nurture exporters. The opportunities to increase growth and competitiveness include strengthening domestic capacity to improve services account, build up subsectors with increasing growth potential, intensify services export opportunities and create competitive service industries. While private sector is the prime mover, the government plays an important role to provide more conducive business environment. These include enhancing delivery system, minimize regulatory burden, providing incentives and tax exemption to reduce cost of doing business, addressing skill gaps and providing world class infrastructure. ...read more.

Conclusion

must learn to innovate."2 As such, we must do away with the current lepak culture and instill industrious culture among teenagers. For sure, the development of mindware should be high on Malaysia agenda list. Apart from skilled workers, market niche and branding is also important to provide competitive edge over other nations. Malaysia need not compete head on with India and China. Rather, Malaysia can focus on market niche by concentrating on value added services such as finance, supply chain management and human resources management. Branding is important to portray Malaysia as a safe investment haven, free of terrorists treat, accommodative host and efficient system. Indeed, a lot needs to be done before Malaysia could take the pole position in the outsourcing industry. With the right guidance and implementation, it is not impossible to achieve. Securing more outsourcing business is good for the Malaysian economy as the industry is estimated to have generated US$405 billion in 2003 and expected to balloon to US$500 billion in 2008.3 1 Chow, Kum Hor, 2004, The outsourcing bonanza, New Straits Times: 16 September. 2 Drucker, Peter F., Managing for the Future, Penguin Books, NY 3 Chow, Kum Hor, 2004, The outsourcing bonanza, New Straits Times: 16 September. Page 1 ...read more.

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