Trade Barriers and Restrictions in Malaysia

dish out Barriers and Restrictions in MalaysiaIntroductionEvery kingdoms and regions urinate its dole come out barriers and restriction including Malaysia as easily. Trade barriers be the restrictions set by organisation on international mete out and national hatful. For instance, customs duties, present moment and exportation taxes, minute licenses, export licenses, subsidies, importation quota, workmanship restriction, and etc. The purpose of having trade barriers and restriction instead of free trade system basically is because political sympathies need to control the cost of equitables and operate trading in and out the ground. Governance over the goods and services price are critical collectable to it will potently affect the specific nations scotch efficiency much(prenominal)(prenominal) as gross domestic returnion index, in serious issue may affect depreciation on the nations fiscal currency and withaltually lead to bankruptcy. Besides, reducing the t rade barriers and restrictions would sport an absolute advantage which is annex market opportunities and oversea investiture allowed to improve the economic harvest-feast.Malaysia is a founding member of the World Trade Organization (WTO) since 1957 until today, by active participations in WTO negotiations, Malaysia carry ons to en trustworthy that trade regulations and trade measure that are negotiated are fair and provide the flexibility for Malaysia to continue its outgrowth constitution. As refer to WTOs trade policy survey report Malaysias edition year 2014, Malaysias trade policy is focused to become a self-reliant and industrialized nation by year 2020. Various bleak trade- relate laws hold up entered into force the Quarantine and reappraisal Service Act, the Strategic Trade Act, the Competition Act, and the Price Control and Anti-profiteering Act. Besides, Malaysia has sign-language(a) and ratified the Trade Preferential System of the Organization of the Islami c collection (TPS-OIC) and the Developing Eight Preferential Tariff Arrangement (D8-PTA).In Malaysia, import prohibitions and restrictions are mostly for national security, religious and environmental reasons. For instance, prohibition import on drugs and firearms, imposed high taxes on tobacco and alcohol products. trade taxes or restrictions are withal applied on certain goods such as timber and crude palm oil which to discourage exports due to prevent exploitation and product availability concerns. Export and import licensing and/or permit must obtain from assigned body which butt be non- authorities or government agencies. For instance, all goods from Israel or to Israel must have modified permit from government body to proceed.Other than licensing, the Halal standards requirement is pregnant for doing occupancy in Malaysia due to Malaysia is a Muslim predominate unpolished. whole meat, attend toed meat products, poultry, and egg products, domestically produced or t rade, must buzz off halal certified from the Department of Islamic Development Malaysia (JAKIM) or every external halal certified body recognized by JAKIM forward to importation or distribution in Malaysia. JAKIM recognizes the qualified Islamic transcription in the exporting state/economy for monitoring the halal process in the slaughterhouse and issuing halal certificates for products exported to Malaysia.Are trade barriers or restrictions always justified? Based on some of the case in Malaysia, we know that the trade barriers or restriction is justified. This case can be seen in services barriers which is in telecommunication service. The market of telecommunication in Malaysia have been regulated by the Malaysian Communications and Multimedia missionary station (MCMC), pursuant to the Broadcasting Act of 1998. However, Telekom Malaysia on the provision of fixed-line and cellular services was abolished in 1994 with the licensing of several competitor but the community have passive remained the dominant provider of fixed-line services which estimated 90% of share in the market. In the year of 2005, the market of fixed-line have declining with 17 telephones for every 100 people. However, the cellular services have continued growth rapidly. At work, Telekom Malaysia is one of the lead story expeditious operators and has shifted the bulk of the company revenue base from fixed to mobile services. Telekom Malaysia have been awarded third-generation (3G) spectrum licences. Once there is more people using cellular services, it will help in increase of Gross Domestic result (gross domestic product) and will help the economics of the Malaysia to be growth. At last, Malaysia have clear the licence to Telekom Malaysia.Other than that, Malaysian requirement for the licensing and operation of pose selling. However, the direct selling company must include 30% of Bumiputera integrity. In addition, Malaysian government have approved a new guidelines on irrel evant Participation in the Distributive Trade Services which is amended the 1995 guidelines. This is where the contrasted distributor or operators of hypermarket must have 30% of their shareholding allocated to bumiputera partners. It is also new reported that have been con faithfuled that the government is considering imposing minimum contain requirement which need 30% of all goods on shelves must be from Bumiputera companies. This is because retail is the biggest contributor to Gross National Income among the 12 National key. This have shown that the economics of Malaysia have contribute RM100.6 billion in 2010 and RM114.4 billion in 2011. Therefore, this have shown that the economics of Malaysian have increase of having foreign distributor in Malaysia. The foreign distributor in Malaysia such as ford (France), Tesco (UK), Giant (Hong Kong, China), and Makro (Netherlands).Nevertheless, the insurance policy policy industry have remain dominated by the foreign providers which particular in life insurance. In the insurance industry, the financial Sector Master Plan have been recommended in phased of liberalisation which including increase caps on foreign equity, reinsurance industry have fully open to foreign competitors, and lifting restriction on employment of expatriate specialists. The 15 foreign firm that are active in Malaysia have hold about 40% of the equity and 50% of the assets in the market. This is because they dominate the fast- growth life insurance market. As in part of the 1997 WTO Financial Services Agreement, the existing foreign shareholders who have the original owner of locally corporate insurance have been agreed by Malaysia to increase their shareholding to 51%.However, the new entry by foreign companies and aggregate foreign shareholding may not exceed 30% although this limit has been subject to negotiation. The leading foreign insurance company in Malaysia such as Great Eastern disembodied spirit Assurance (Singapore), America n International Assurance (United States), and ING Insurance (Netherlands). Other significant firms include Kurnia and Hong Leong (both of Malaysia), Allianz (Ger umpteen), and prudent Assurance (United Kingdom).In conclusion, trade barrier and restriction of a country was based on itself a country statement set up the compliance condition upon the country physical body issues by the government for shelter and prevented to the conflict between people to people, people to business, business to business and business to government due to each of social unfairness and disrespect even unethical issues. The domestic barriers and restrict of issues derive social living such s race, religion, demography ratio allocation, ethics issues, and also balance of humankind living. For instance, all the Malaysia distributes channel cannot distribute those non-halal basic need food and product to Islamic store. This is an understanding of restriction of Islamic faith and also in respect of other wise religion belonging. Therefore, in the lives of the cabaret, the government has to set up the rules and regulation which is trade barriers and restriction by harmonise to variability issues of society in regularise to guide the society harmony and peaceful lives.Moreover, in sight of Malaysias international foreign trade by through import and export. The country trade condition has set up according to Malaysia business scale and social development are such as issues related to economic development, restrict the tendency of business corruption, cheating on workmanship and material and licensing and certificate of the product. The trade restriction of a country is substantial guide the import and export process make sure its security and transparent follows with criteria of international trade policy. Therefore, the Malaysia government oblige in the controlling of supervising in the import and export process.Otherwise, it is also related to gross domestic product and GNP econ omy condition where it is the import and export can be affect the gross domestic product and GNP status. For instance, when import is higher than last year outcome, it may cause the GDP decline, but reverse of when the import has dispirit than last year outcome, it might lead the good signings in the GDP because the local production and domestic consumption have strongly signified the economy is on track and healthy economies. Besides that, for an fount of GNP, when the GNP is higher that mean of foreign capacity investment at the local is popular and being invested by foreign by enforce development a part of the economy. This is good status it means the country has been rapidly developing to the next train of another international development country. Contrary, when the GNP is lower that means the foreign capacity investment is lower and its unable to lead the economy surfing on country development. Therefore, the government has measured the trade restriction and barriers contro lling economy of the Malays in order to lead the economy in balance allocation and stability to growth.In Malaysia, the mobile sector is known as one of the fastest growing sectors within the telecommunications industry. According to the star newspaper, undimmed phones penetration in Malaysia has increase from 47% in year 2012 to 63% in 2014. Results shows that penetrations on smart phones has highly support the growth of mobile telecommunication sector. Telekom Malaysias info and broadband services is their key driver for growth, as mentioned in Malaysian Economic Outlook 2014, Malaysian Institute of Economic Research (MIER) 2014 GDP growth outlook of 5.5% with expected measures to rein in the budget deficit, tighter monetary conditions and enhanced downside risk. In order to satisfy the demand of bandwidth, more character reference broadband services packaged are to be offered as well as the proliferation of smart devices and usage of applications. On the other hand, providing mobility solutions is also important from a customer experience. Telekom Malaysia will need to improve their services to welcome the expectation of business segment users as their brand promise of Life and Business Made Easier.Retail from foreign country may have increase the economy of Malaysia. However, the equity of 30% Bumiputera share is not good enough. As other race of Malaysian are also contributing to the countrys economy, government of Malaysia should include the consideration of increase the equity to 30% and above which includes Malaysians not counting races. This is because by giving the homogeneous chances to other citizens of Malaysia will increase the number of talents and experts. There are many well-known professionals choose to get out of Malaysia because of not having the equal opportunity as bumiputera to expand their business in retail sector. In other words, it will provide more job opportunity for Malaysians. Other than that, by having more retails from fo reign country will increase the price of imported products when tariff is charged, as trade barriers forces consumers to pay more when import items are taxed. By promoting entrepreneur or starting own business locally will provide more selections to the economy as they will be an increase of GDP and having more jobs opportunity will boost the GNI.As there are too many insurance company that is dominant by foreign providers. Malaysia can encourage more local company to build up insurance company. At the same time, local insurance company such as Hong Leong. They can look into creating more variety of insurance packages other than life insurance. This enables the options to be open. Government of Malaysia can also promotes more about insurance to create awareness. As there are many in the society these days does not aware of the grandness of insurance in terms of emergency needs. For instance if one admitted into infirmary after a major accident or an unexpected checkup emergency, on e may not need to have a guerilla thought about paying the large some of bills as the health care expenses today is relatively high.Besides that, for a country to increase GDP and increase of economy growth if the quality of human capital is change by discipline. Therefore, Malaysia should aim to increase the quality of its workforce by increasing educational and vocational training opportunities and retraining those who need to take up work in new industries. Improvements in physical bag and the level of technology in use also are contributors to growth. Hence, having the improvement of education we will increase the quality of work produce and it will be beneficial to the economy in Malaysia. In addition to this, the institutional infrastructure of the country in areas such as law, banking and government institutions is essential to GDP growth.An enlightened in-migration policy that attracts highly trained personnel from abroad may increase the quality of the countrys workforc e. Where more delicate people may be brought into the workforce, either by policies to reduce unemployment, immigration or population growth combined with adequate education, GNP growth may be encouraged.