Malaysia’s Neutral Stance Misused For Tariff Evasion -- Liew

KUALA LUMPUR, July 15 (Bernama) – Malaysia’s policy of neutrality in global trade has been misinterpreted by some exporters and exploited as a base to evade tariffs and circumvent sanctions, Deputy Investment, Trade and Industry Minister Liew Chin Tong said today.

In his keynote address at the Skrine seminar on “Staying Ahead of the Curve: Legal Appetite for Sanctions and Tariffs Risks” here today, Liew said the government is taking steps to strengthen enforcement and tighten oversight over certain imports and exports to prevent such misuse and uphold Malaysia’s credibility in global trade.

“Tariffs are not simply about raising the price of imported goods. Their effects and consequences are more than that. They disrupt supply chains by creating second-order effects.

“For instance, goods that were originally destined for the US market are now being redirected and flooding other markets, including ours. This creates serious challenges as the influx of imports could undermine our local producers,” he said.

He said the current era of hyperglobalisation, which has promoted efficiency above all else, has ended, replaced by an era that prioritises security and resilience. 

As a result, both the government and the private sector must rethink their long-term trade strategies to exist and adapt to this changing global landscape, Liew added.

“Trade should no longer be seen as an end in itself, but as a means to achieve a broader purpose,” he said, adding that the old trade model, where  Malaysia and other ASEAN members compete to manufacture as cheaply as possible and export to the US, is no longer sustainable.

Liew noted that Malaysia must pursue market diversification by expanding ties with emerging markets in Central Asia, the Middle East, Africa and Latin America. 

At the same time, he urged ASEAN member states to move away from internal competition and instead work collectively to build an integrated regional supply chain and a vibrant consumer base of their own.

“ASEAN is already the fifth-largest economy in the world, with a population of over 680 million people.

"A stronger and more integrated ASEAN, with a strong middle class, will not only encourage major powers to engage with us as a single bloc but may also attract other emerging economies to trade, invest and grow alongside us,” he said.

He also emphasised the importance of legal preparedness in navigating today’s complex trading landscape.

“The law can certainly serve two purposes: to advance and to defend our national interests. Hence, in navigating this ever-evolving global trading system, the law must be part of the equation.

“What has kept the world in check for so long, even with its imperfections, is the existence of international legal norms that hold states accountable and provide a framework for the peaceful settlement of disputes,” he said.

Liew said as Malaysia charts its course through this changing global economy, the government and the private sector must work together to strengthen legal knowledge and enhance the ability to navigate complex legal and regulatory challenges.

— BERNAMA