US agricultural products tax exemption finalised based on mutual interest - Tengku Zafrul

KUALA LUMPUR: The sales tax exemption on imported United States (US) agricultural products is the result of negotiations finalised based on mutual interest, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

AI Brief

Malaysia's tariff exemption led to reduced US duties, but future exemptions depend on beneficial negotiations.
Global trade shifts are sidelining WTO norms, with the US pushing a new trade order based on geopolitical interests.
Malaysia's rubber glove industry faces rising costs and falling competitiveness, prompting calls for holistic solutions.

He said the exemption was one of the discussion outcomes that had led to a tariff reduction against Malaysia.

"Therefore, any tax exemption consideration for other countries is subject to negotiations based on requests and counter-offers from the respective countries, provided that it brings benefits and advantages to Malaysia," he said during the winding-up session of the 13th Malaysia Plan (13MP) motion at the Dewan Rakyat sitting today.

Tengku Zafrul said the current trade situation is unprecedented in any country, and Malaysia is not alone in facing circumstances where multilateral trade principles have had to sideline the World Trade Organization (WTO) to protect the respective country's economic and political interests.

According to him, the measures taken by the US aim to establish a new world trade order based on current geopolitical and geoeconomic agreements, while its compatibility with WTO rules depends on the specific design and implementation.

"MITI will comply with various international trade regulations currently in force, and the ministry will study this issue in more detail and will discuss the matter (discrimination) with the Finance Ministry," he said.

Nevertheless, he said the government will continue to uphold the principles of fair and equitable trade without discrimination against any country, including trading partners with whom Malaysia has free trade agreements.

On the tariffs imposed on the rubber glove industry, Tengku Zafrul said the sector had already been impacted earlier due to higher production costs compared to other countries, particularly China, which has been actively investing post-COVID-19 pandemic.

The main issue faced is not just the implementation of tariffs, but also productivity, he said.

"Therefore, we need to look at this matter holistically, because even without tariffs, the competitiveness of the local industry is decreasing compared to neighboring countries that have increased investment in this sector," he added.

-- BERNAMA