Malaysian trade policy and the 2001 WTO trade policy review

The Trade Policy Review: Malaysia 2001 (henceforth referred to as the TPR 2001) provides a comprehensive survey of trade policy making in Malaysia during 1997-2001 in the context of changes in overall economic policy and institutional developments. This is a highly timely publication. It will be valued by the trade policy analysts not only for the purpose of assessing Malaysia's performance in meeting commitments under the WTO Agreement, but also as an essential reference for studying the implications of Malaysia's unorthodox policy response to the recent financial crisis for her long-term commitment to maintaining an open trade and investment policy regimes. The purpose of this paper is to survey recent developments in Malaysian trade policy from a historical perspective, using the 2002 TPR as a reference point. It begins with an overview of Malaysia's economic performance during the post-independence era, paying attention to the underlying political economy (Section 2). This section aims to supplement the background discussion in the TPR 2001 on the economic environment and trade policy regimes (Chapters 1 and 2) in providing a framework for assessing recent policy trends. Section 3 sketches the main facets of the current trade policy regime, with emphasis on policy shifts following the onset of the financial crisis. Section 4 provides a critical evaluation of the TPR 2001 in terms of the purpose of the TPRM as set out in Annex 3 of the Marrakesh Agreement (WTO, 1995). The final section presents concluding remarks.