Malaysia seeks productivity gains with UNCTAD tool

12 October 2018

By using an UNCTAD database to identify and compile non-tariff measures, Malaysia hopes to reduce the cost of compliance by 25%.

Malaysia is helping exporters and importers by taking the scissors to unnecessary red tape and streamlining the regulatory burden with the help of an UNCTAD database, a senior consultant said during NTM Week in Geneva, Switzerland, on 9 October.

NTMs – non-tariff measures, or regulations on goods including certifications and permits – can place a brake on trade and UNCTAD has created advanced solutions to help developing countries understand and streamline them, including its TRAINS (Trade Analysis Information System) database showing all-known NTMs in the world and what exporters/importers must do to comply with them.

Port Klang in Selangor
Port Klang in Selangor, the biggest and busiest port in Malaysia

Megat Akbarruddin Megat Ismail of the Malaysia Productivity Corporation (MPC) said the Malaysian government had tasked his agency with identifying regulations in order to reduce compliance costs by 25%.

He said he was asked to take a “guillotine approach” to non-tariff measures by determining if each regulation was legal, necessary or efficient, with a focus on old rules which were no longer relevant. The work revealed that there were more than 5,000 non-tariff measures on the books in Malaysia.

Identify and locate

“This was an extensive and tedious effort involving 18 ministries covering products ranging from pesticides, drugs, animals, foods, a whole lot of NTMs,” Mr. Ismail said. “This involved many stakeholders including the industrial sector.”

MPC used UNCTAD’s global TRAINS database to identify and locate the measures across the 18 Malaysian ministries and try to understand their purpose.

The NTM data for countries in the Association of Southeast Asian Nations (ASEAN) were collected jointly and are currently being updated by the Economic Research Institute for ASEAN and East Asia (ERIA) and UNCTAD, together with respective governments. 

“We classified the NTMs using the UNCTAD system, so we now have a baseline for NTMs in Malaysia,” Mr. Ismail said. “Each ministry had an NTMs working group with technical experts from industry and academia.”

The work revealed that the ministries of health and agriculture between them accounted for about 80% of all non-tariff measures in Malaysia, Mr. Ismael said.

“Moving forward, we want to establish a central database for NTMs in Malaysia, and of course we will work with UNCTAD,” he said. “We hope this will improve productivity in Malaysia.”

NTM Week provides a platform for policymakers, practitioners and researchers to discuss cutting-edge issues surrounding the impact of NTMs on international trade and sustainable development. This year’s meeting runs from 9 to 11 October.