Dr. Juita Mohamad from IDEAS discusses Malaysia’s next steps in its trade talks with the Washington and what it can leverage to move forward.
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00:00Continuing our discussion, earlier we spoke with Dr. Jurita Mohamad from Ideas on Malaysia's next steps in its trade talks with Washington and what we can leverage to move forward. Here's what she has to say.
00:13The diplomatic discussions are very much needed. We need to be showing the U.S. to the U.S. that we're willing to work things out diplomatically.
00:26And again, because Malaysia has always been a trading partner with the U.S., we've had long diplomatic relationships as well with the U.S.
00:39So it's key for us to be keeping that relationship, especially when our supply chains are very much integrated, especially in the semiconductor industry.
00:53So we are actually party to the investment and trade framework 2004 with the U.S.
01:03So the discussions should be based on that agreement, whatever, you know, whatever outcomes that has transpired, it should be backed and it should be based on our initial investment and trade framework 2004 agreement with the U.S.
01:21I am a bit also a bit concerned that the U.S. will try to justify their move with Malaysia's non-tariff measures that have been used not just against the U.S.
01:35But also with our other international partners and these type of non-tariff measures or behind the border measures are very much related to investments, halal industry, pharmaceutical industries and also government procurement rules.
01:54So if this is brought up by the U.S., then I think further discussions on how to lax or make it a bit more flexible for the U.S.
02:08From the perspective of the non-tariff measures, I think that will need to take place a bit on the on the sidelines that would that would need that would need a bit more discussion.
02:21Yeah.
02:21Juwita also highlighted Malaysia's bargaining chip in its negotiations with the U.S.
02:29The U.S. is only looking at trading goods when they look at their surplus or trade surplus or their trade deficit.
02:38But the U.S. has its strength in services.
02:41Again, as a developed country, you should be moving away from manufacturing goods.
02:46But then also as as you grow and as you have more knowledge, then you should be moving up into the services sector.
02:56So Malaysia's bargaining chip would be to open up our services sector.
03:01This is something that we could put on the table for the U.S.
03:05So because this is where the U.S. strength is and Malaysia's strength is still in the manufacturing of electronics and electrical goods, palm oil and apart from other industries.
03:19So again, what we can what we can put on the table is, again, by opening up our services industry where, again, the non-tariff measures or behind the borders measures are very apparent.
03:36And again, what I mentioned before, if we are keen to keep this relationship with the U.S.
03:46And we are willing to open up our services industry to the U.S., then again, the behind the border controls need to be laxed and made somewhat transparent.
03:59We need to be making the steps and the requirements more transparent wherever possible, especially in investments in the halal industry, in the pharmaceutical industry, in government procurements, where I mentioned before, barriers are seen to be the highest in Malaysia.
04:19Now, countries big and small are stepping up to the negotiating table to respond to Trump's tariffs.
04:26Dr. Juwita also explores how Malaysia can deepen cooperation with the U.S. as a way forward in trade talks and how ASEAN can approach discussions with a united front.
04:38This is like a very interesting time, I think, because you do see the dynamics between like bigger countries and smaller countries.
04:47So I don't see bigger countries like China would want to be very flexible to cater to U.S. demands.
04:54For smaller countries in ASEAN, I think discussions on avenues of cooperation can be helpful to mend the relationship.
05:03So cooperations on critical minerals and semiconductors with Malaysia and the U.S. can be explored if, and I only say if, it benefits the Malaysian economy as a whole and not just the sector alone.
05:18So these cooperations need to be meaningful and it needs to go beyond, you know, FDI numbers.
05:24It needs to empower local players through technology and also knowledge transfer.
05:30And it needs to have sustainable job creation, not just, again, numbers of jobs created.
05:35So for some countries, the U.S. hostile unilateral move has caused the trust and good faith to be broken, somewhat broken.
05:48But for Malaysia, we have always wanted to penetrate the U.S. market, even from, you know, the time when we wanted to negotiate the TPP with the U.S.
05:59You know, as a small open economy, we really did want to pursue that relationship with the U.S.
06:07So, again, this visit is very much needed, especially for Malaysia, if we want to move the needle and repair the relationship.
06:16But, again, we need to look inwards as well to see whether we can improve our processes for, you know, for our future partners, not just the U.S.
06:27And, again, we need to ensure that negotiations with the U.S. can be a win-win situation.
06:35And, again, it has to be beyond FDI numbers.
06:39Under Malaysia's chairmanship, ASEAN has vowed to stand together, rejecting unilateral tariffs and committing to frank constructive dialogue.
06:48While member states continue individual talks with the Trump administration, Dr. Juwita highlights the potential for ASEAN to navigate the issue collectively.
06:57Well, you talk about ASEAN, you want to compare it with the EU, right, as a single block of production.
07:06But the thing with ASEAN, even though we are, you know, a single regional block, we have our different jurisdictions, we're different nationals.
07:16So we're not quite like the EU at all.
07:21So, again, when you think about the EU and ASEAN free trade agreements, when you think about negotiations, negotiations still happen at a bilateral level with each ASEAN countries.
07:37But I think it's good that for ASEAN, we have made the statement that we're not going to increase the tariff rates and we're going to be discussing.
07:50And, again, I think this could be a foot forward in terms of, again, mending the relationship.
07:59But I don't see, personally, I don't see ASEAN as a block negotiating with the Trump administration.
08:09I do think that it's going to be bilateral talks with each ASEAN countries.
08:15And, again, this is how we've been, even with the EU.
08:19But, again, theoretically, it would be easier if all of us, we have, you know, a single voice on each product line that has the tariff increases.
08:30But, again, as you mentioned before, the tariff increase is not to ASEAN as a block.
08:36It's like two different countries.
08:38So, again, it has to be negotiated at the national level with the Trump administration.
08:45I think, again, diplomatic ties have to be kept and have to be mended.
08:55And, again, as a small open economy, we might want to have the U.S. as an ally.
09:03But I do feel that on our side, we do need to look inwards to see what kind of cooperation can lead to a win-win situation and not just, you know, opening up our doors just for the sake of U.S. demands without looking into our own interests and our own social well-being.
09:25So, again, let's see.
09:26So, again, let's see.
09:27Let's see.
09:28Let's see.
09:29Let's see.