KUALA LUMPUR, Oct 3 ― RAM Rating Services Bhd (RAM Ratings) expects the growth performance of Malaysia’s exports and imports to remain sluggish at a respective -0.1 per cent and -6.4 per cent in August.
The rating agency in a statement said this will narrow down the overall trade surplus of RM6.5 billion, underscored by subdued global trade and industrial performance in the same month.
RAM head of research Kristina Fong said the Regional Comprehensive Economic Partnership (RCEP), which Malaysia is a part of, is slated to conclude negotiations by year-end.
“The main incentive of being part of this trade pact lies in the potential to de-tangle the “spaghetti bowl” effect of these existing overlapping free trade agreements, by standardising rules and procedures among its members.
“With a more uniform set of rules for this trade deal, trade flows can be further enhanced beyond any tariff tweaks that may be introduced,” she said.
RAM said Malaysia has existing trade agreements with RCEP member nations and it should alleviate concerns about threats to domestic firms’ competitiveness due to potentially lower import tariffs under this new trade agreement.
“Under the present agreements, Malaysia’s import tariffs are already at or near zero, thus limiting significant import-substitution effects,” it said. ― Bernama