Stronger baht has affected Malaysia’s trade, envoy to Thailand admits ahead of Asean summit

Datuk Jojie Samuel said both countries have complementary industries but the stronger baht has edged out trade and investments for South-east Asia’s third largest economy for the first eight months of 2019, with the effects felt notably in the import of rice. — Reuters pic
Datuk Jojie Samuel said both countries have complementary industries but the stronger baht has edged out trade and investments for South-east Asia’s third largest economy for the first eight months of 2019, with the effects felt notably in the import of rice. — Reuters pic

BANGKOK, Oct 31 — Malaysia’s total trade with Thailand this year has dipped slightly as the baht continues to gain strength among South-east Asian currencies, Malaysia’s ambassador to Thailand said today.

Datuk Jojie Samuel said both countries have complementary industries but the stronger baht has edged out trade and investments for South-east Asia’s third largest economy for the first eight months of 2019, with the effects felt notably in the import of rice.

“There has been a slight decrease, but below 10 per cent,” he said of the dip in total trade, in a media briefing here ahead of the Asean Summit this weekend.

“The Thai baht has affected commodities, especially agricultural products. Because the Thai baht increased, the price of rice has also risen.”

According to data provided by the ambassador later, Malaysia’s total trade with US$22.96 billion (RM98.65 billion) in 2017 — a rise of 13.7 per cent.

Malaysia’s imports from Thailand increased by 7.5 per cent, from US$11.21 billion (RM48.14 billion) in 2017, to US$12.04 billion (RM48.60 billion) last year while exports rose by 19.7 per cent for the same period, from US$11.76 billion (RM50.51 billion) to US$14.07 billion (RM56.77 billion).

Thailand is Malaysia’s fifth biggest trading partner. Both countries are also mutually each other’s sixth largest export and import markets.

He noted that Malaysia’s exports are in petroleum products as well as electrical and electronical goods, which are also produced by Thailand, but that the effected sectors complement each other.

However, the ambassador said that the stronger baht has also encouraged more Thais travel to Malaysia, boosting tourism figures.

He said the total number of Thai tourists to Malaysia this year is predicted to top 2.1 million people and was hopeful the figure will rise more next year with the official Visit Malaysia 2020 campaign.

In contrast, he said the number of Thai tourists to Malaysia last year was 1.8 million people.

Malaysia will have to find ways to counter such external pressures, Jojie said, adding that trade, investment and tourism will be among the top issues expected to be raised by Prime Minister Tun Dr Mahathir Mohamad this week in bilateral talks with his Thai counterpart, Prayut Chan-o-cha.

Dr Mahathir will be flying to Bangkok tomorrow for the 35th Asean Summit that will kick off November 2 to 4.

He is scheduled to meet the Thai prime minister for a bilateral discussion on November 2 before the plenary session of the Asean summit in the evening.

Dr Mahathir is also expected to engage in bilateral talks with Australia during the three-day summit as other world leaders will also be attending several other summits held the same time at the IMPACT Exhibition and Convention Centre in Nonthaburi, northwest of Bangkok.

The prime minister will be accompanied by his wife, Tun Dr Siti Hasmah Mohamad Ali, who will also be attending a separate event on sustainable waste management.

Other Cabinet members who will be part of the Malaysian delegation are Foreign Minister Datuk Saifuddin Abdullah and International Trade and Industry Minister Datuk Darell Leiking.

Trade talks and sustainability are expected to dominate discussions at this summit, which will also see participation from China and India with a key highlight being the Regional Comprehensive Economic Partnership (RCEP).

Negotiations have been ongoing for the creation of a new trade bloc that was mooted in 2012 during the 21st Asean Summit in Cambodia and is expected to be concluded at this year’s summit.

If negotiations are successful, the RCEP could become the largest trade pact in the Asia-Pacific region with a combined GDP of US$49.5 trillion, or 39 per cent of the world GDP.

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