MALAYSIA ASKED TO BIND TARIFFS, JOIN GATT CODES

8:21 AM Jul 21, 1993

MALAYSIA ASKED TO BIND TARIFFS, JOIN GATT CODES
Geneva 20 July (TWN) -- Malaysia generally got commendation at the GATT Council this week over its trade and related policies and its active role in the Uruguay Round, but was "encouraged" by its trading partners to undertake "more responsibility" by joining various Tokyo Round codes and binding its tariffs in the GATT.

Malaysian trade policies were being reviewed under the GATT Trade Policy Review Mechanism exercise.

The secretariat's report had brought out that as a result of a change in its policies in the 70s, from import-substitution to export-orientation, Malaysia's imports and exports had increased from 50 percent of GDP in 1960 to almost 80 percent in 1992, and from an exporter of primary commodities to a more diversified trader, with about 69.8 percent of manufactured exports.

The secretariat report however noted that trade and trade-related policies are characterized by a "degree of discretion and guidance" -- though import and export licensing, but more significantly through other types of incentives granted to sectors regarded as priority: local content provisions, investment incentives and discretionary government procurement.

At the Council, Malaysia however said the "discretion" in import licensing was exercised in a responsible manner, with checks and balances, and that published guidelines, outlining licensing procedures and appeals including to courts, were available. A number of issues raised, such as tariffs and bindings would be addressed in the Uruguay Round and was ready to fulfil the requirements of the agriculture text in the Draft Final Act. Malaysia was also ready to expand its schedule of concessions to 48 percent of its imports.

However, Malaysia would not privatize the national paddy and rice authority, the Council was advised.

The report also brought out that in recent years, Malaysian trade policies have shifted towards closer integration within the Asean who in 1977 concluded the AFTA (Asean Free Trade Area Agreement) for preferential margins of 25-50 percent on imports and in 1992 have agreed on a Common Effective Preferential Tariff Scheme (CEPT).

Reflecting the continuing tussle within the GATT as to whether the regional integration arrangements of developing countries should be studied within the context of the GATT Committee on Trade and Development and the GATT provisions relating to developing countries (Part IV and the 1989 Enabling Clause), according to the official summing up at the end of the meeting, one of the members (presumably the US) wanted Asean to notify AFTA and CEPT to GATT under XXIV (regional free trade areas).

A similar conflict between the US and Latin American southern cone countries, supported by other developing countries, in relation to the Mercosur was only recently resolved by asking the Mercosur to be reviewed at a working party of the CTD, but with the US and EC and others taking the position this is not to be a precedent, and developing countries too making a similar reservation in terms of the working group in effect being asked to look at Mercosur in terms of Art. XXIV too.

Malaysia countered that information on AFTA and CEPT have been provided to the CTD and further progress on implementation would be duly reported to the CTD.