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Trade Profile

In this page: Foreign Trade in Figures | Trade Compliance | Standards

 

Foreign Trade in Figures

Malaysia is well known for its openness to international trade. Foreign trade represents 134% of the country’s GDP (WTO, 2015) making the country vulnerable for external demand.

The trade balance is structurally positive. However, the surplus has been declining because of a drop in the country's exports of mining by-products (synthetic rubber, etc.) and a rise of imports. The drop of palm oil prices aggravated this trend even though its exports rose while the weak ringgit providing some support. The country mainly exports electric and electronic equipment, machinery, mineral fuels and hydrocarbons, animal and vegetable oils and fats, wood and charcoal. It mainly imports electric and electronic equipment, machinery, fuels and oils, plastic products, iron and steel. Malaysia's main trade partners are Singapore, China and Japan. Even though exports of electronic equipment suffered from the Chinese slowdown, the U.S. demand should stay dynamic and support exports.

The government supported the creation of the Trans-Pacific Partnership (TPP), a multilateral free-trade agreement negotiated between the Asia-Pacific and North American countries. The treaty, signed in October 2015 by Malaysia and eleven other nations in order to boost inter-regional trade is now contingent on the American support as Trump Administration officially withdrew the U.S from the TPP in January 2017.

 
Foreign Trade Indicators 20122013201420152016
Imports of Goods (million USD) 196,393205,897208,851175,961168,392
Exports of Goods (million USD) 227,538228,331233,927199,869189,414
Imports of Services (million USD) 43,13144,97345,16139,81439,347
Exports of Services (million USD) 40,49842,00541,86034,75933,925
Imports of Goods and Services (Annual % Change) 2.91.74.01.20.4
Exports of Goods and Services (Annual % Change) -1.70.35.00.60.1
Imports of Goods and Services (in % of GDP) 68.567.164.563.360.8
Exports of Goods and Services (in % of GDP) 79.375.673.870.967.2
Trade Balance (million USD) 36,64330,57734,60528,051n/a
Foreign Trade (in % of GDP) 147.8142.7138.3134.2128.1

Source: World Trade Organisation (WTO) - 2017; World Bank - 2017

 

Main Partner Countries

Main Customers
(% of Exports)
2016
Singapore 14.6%
China 12.5%
United States 10.2%
Japan 8.1%
Thailand 5.6%
Hong Kong 4.8%
India 4.1%
Indonesia 3.5%
Australia 3.4%
Vietnam 3.0%
Main Suppliers
(% of Imports)
2016
China 20.4%
Singapore 10.4%
Japan 8.2%
United States 8.0%
Thailand 6.1%
South Korea 5.2%
Indonesia 4.2%
Germany 3.4%
Vietnam 2.7%
India 2.4%

Source: Comtrade, 2017

 

Main Products

189.4 bn USD of products exported in 2016
Electronic integrated circuits and microassemblies 14.1%
Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.9%
Palm oil and its fractions, whether or not refined (excl. chemically modified) 4.8%
Petroleum gas and other gaseous hydrocarbons 4.4%
Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made-up into panels (excl. photovotaic generators); light emitting diodes; mounted piezo-electric crystals; parts thereof 4.4%
Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 4.1%
Petroleum oils and oils obtained from bituminous minerals, crude 3.0%
Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 1.7%
Articles of apparel and clothing accessories, incl. gloves, mittens and mitts, for all purposes, of vulcanised rubber (excl. hard rubber and footwear and headgear and parts thereof) 1.7%
Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading 8469 to 8472, n.e.s. 1.6%
168.4 bn USD of products imported in 2016
Electronic integrated circuits and microassemblies 14.8%
Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 7.1%
Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made-up into panels (excl. photovotaic generators); light emitting diodes; mounted piezo-electric crystals; parts thereof 2.1%
Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 1.7%
Petroleum oils and oils obtained from bituminous minerals, crude 1.7%
Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading 8469 to 8472, n.e.s. 1.4%
Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 1.3%
Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 1.3%
Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 1.1%
Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 1.1%

Source: Comtrade, 2017

 
 
 

Main Services

29.4 bn USD of services exported in 2015
Travel
59.60%
Other business services
18.87%
Transportation
13.64%
Construction services
3.50%
Cultural and recreational services
1.31%
Insurance services
1.27%
Financial services
1.17%
Government services
0.32%
Royalties and license fees
0.32%
36.3 bn USD of services imported in 2015
Travel
29.04%
Transportation
28.81%
Other business services
20.49%
Construction services
7.45%
Insurance services
6.49%
Royalties and license fees
3.43%
Cultural and recreational services
2.42%
Financial services
1.19%
Government services
0.68%

Source: United Nations Statistics Division, Latest Available Data

 

Exchange Rate System

Local Currency
Malaysian Ringgit (MYR)
Exchange Rate Regime
Free conversion of the Ringgit was suspended on September 30, 1998. Non residents' offshore accounts in foreign currencies are again subject to control (preliminary authorisation from the Central Bank is required in order to convert Ringgits into foreign currencies) as well as commercial settlements (imports and exports). As for the right to transfer, repatriation of foreign profits and capital related to an investment is guaranteed.
Level of Currency Instability
There are no particular regulations on foreign currency exchange.
 
 
Monetary Indicators 20112012201320142015
Malaysian Ringgit (MYR) - Average Annual Exchange Rate For 1 USD 3.063.093.153.273.91

Source: World Bank - Latest available data.

 
 

Trade Compliance

International Conventions
Member of World Trade Organisation
Party to the Kyoto Protocol
Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
Main International Economic Cooperation
APEC, ASEAN, AFTA and the ASEAN - China Free Trade Area.
The country has signed a trade agreement with 21 other countries in the São Paulo Round of the Global System of Trade Preferences among Developing Countries (GSTP).
Party of the ATA Convention on Temporary Admissions and Use of the Carnets
Yes

As a Reminder, the ATA is a System Allowing the Free Movement of Goods Across Frontiers and Their Temporary Admission Into a Customs Territory With Relief From Duties and Taxes. The Goods Are Covered By a Single Document Known as the ATA Carnet That is Secured By an International Guarantee System.
Look Up the Other Member Countries And Read the Web Pages of the World Customs Organization Devoted to the ATA Carnet.
Party of the TIR Convention
No

As a Reminder, the TIR Convention and its Transit Regime Contribute to the Facilitation of International Transport, Especially International Road Transport, Not Only in Europe and the Middle East, But Also in Other Parts of the World, Such as Africa and Latin America.
The UNCTAD Website Allows You to Read the TIR Convention, See the List of Member Countries And to Find Further Information.
Accompanying Documents For Imports
Goods shipped to Malaysia must be accompanied by the following documents:
- The single administrative document (SAD);
- The commercial invoice. It must be drawn up in triplicate, in English;
- A phytosanitary certificate. It is necessary for fruits, vegetables, seeds and other plants and is issued by the regional service for the protection of plants:
- A health certificate. It is necessary for meats and is issued by the departmental directorate of veterinary services;
- A certificate of free sale for cosmetics. It is issued by the Federation of perfume industries;
- The transport documents and packing list.
Free Zones
Free zones have been set up to facilitate operations for exporting companies, which export all or almost all of their products. There are two types: free industrial zones (FIZ), mainly for manufacturing companies which make or assemble products destined above all for export; and free commercial zones, for commercial activities. The FIZ allow exporting companies to benefit from minimum Customs formalities and to import raw materials duty free, as well as parts, machinery and equipment they use directly in manufacturing, and these companies also benefit from minimum formalities when they export their finished products. Companies located in FIZ must export at least 80% of their production and mainly use imported raw materials and components. In the regions where FIZ are neither practical nor desirable, companies can set up licensed manufacturing warehouses (LMW), which have the same advantages.

There are free industrial zones for manufacturing industries at Sungai Way, Hulu Kelang, Kinta, Jelapang II, Perai, Bayan Lepas, Sama Jaya, Telok Panglima Garang, Baru Berendam, Tanjung Klingand, Johor Port.
The free commercial zones are
Northport, Southport, Westport, Butterworth, Bayan Lepas, the international airport of Kuala Lumpur, Rantau Panjang, Pengkalan Kubor, Johor Port, Tanjung Pelepas and Stulang Laut.

For Further Information
Royal Malaysian Customs Department (RMC)
PCAM  (National agency for the promotion of trade)
Non Tariff Barriers
Import regulations in Malaysia are liberal compared to other ASEAN countries' regulations. Most goods can be freely imported under General Open License. Some specific sectors, considered as strategic, are protected by a system of restricted import licenses. Items covered under this category are the iron and steel industry, cement, the sector of the automobile and its components and also polyethylene and polypropylene.
The restrictions in import licensing also affect other sectors in terms of approval (electrical products) and sanitary items (foodstuffs or veterinary products), without being a protectionist measure.
Quotas are not frequently applied to imports and apply to certain products whose local production is favoured (rice, meat, fruits and vegetables). In extreme cases (frozen chicken, eggs, liquid milk or sugar), if it is considered that the local production is self-sufficient, import is forbidden. There are other products that are forbidden or subject to special licenses for safety, religion or morality reasons.
Sectors or Products For Which Commercial Disagreements Have Been Registered With the WTO
As a plaintiff with Pakistan, Thailand and India against the United States about the prohibiting of shrimp imports; as defendant following a complaint by Singapore about the prohibiting of polyethylene and polypropylene imports.
Assessment of Commercial Policy
Malaysia and WTO
Barriers to exchanges, inventoried by the United States
Barriers to exchanges, inventoried by the EU
Sanitary and phytosanitary barriers, inventoried by the EU

Learn more about How to Export to Malaysia on Globaltrade.net, the Directory for International Trade Service Providers.

 

Standards

National Standards Organisations
Department of Standards Malaysia (DSM)
Integration in the International Standards Network
Malaysia is a member of the International Organisation for Standardisation, the International Electrotechnical Commission, the International Telecommunication Union and the Codex Alimentarius Commission. Considerable progress has been made in harmonising Malaysian standards with international standards, in accordance with Malaysia's obligations which ensue from the OTC agreement with the WTO. Malaysia is also working on negotiating mutual recognition agreements with several APEC economies, basing itself on guidelines established by the international organisations.
Obligation to Use Standards
All standards are optional unless they are mentioned in technical regulations (transport equipment, electrical products and accessory elements, products ensuring consumer safety, and telecommunications equipment).
Classification of Standards
The Malaysian standard is the NM.
Assessment of the System of Standardization
Malaysia has a general framework of standardisation and compliance. The Department of Standards Malaysia (DSM), which is part of the Ministry of Science, Technology and Innovation, is the national organisation for standardisation and accreditation, set up in accordance with the 1996 Law on standards in Malaysia (Law n°49). The Department's main function is to promote standards, standardisation and accreditation as means to advance the national economy. The DSM has designated the SIRIM company, of which the State is the sole shareholder, as the only national standardisation organisation according to the provisions of the Law on standards in Malaysia.
Online Consultation of Standards
Standards can be consulted on the website Malaysia Standards Online Store (registration required).
Certification Organisations
Department of Standards Malaysia (DSM)
Standard and Industrial Research Institute of Malaysia
Associations of Standards Users
Malaysian Association of Standards Users

 

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Last Updates: August 2017