Malaysia is working to reduce the cost of compliance for exporters and importers by 25% using database from the United Nations Conference on Trade and Development (UNCTAD) that identifies and compiles non-tariff measures (NTMs), said a senior consultant of the Malaysia Productivity Corporation (MPC).
Megat Akbarruddin Megat Ismail said the country is helping exporters and importers by taking the scissors to unnecessary red tape and streamlining the regulatory burden with the help of an UNCTAD database.
NTMs—non-tariff measures, or regulations on goods including certifications and permits—can place a brake on trade, and UNCTAD has created advanced solutions to help developing countries understand and streamline them, including its TRAINS (Trade Analysis Information System) database showing all-known NTMs in the world and what exporters/importers must do to comply with them.
Ismail said the Malaysian government had tasked his agency with identifying regulations in order to reduce compliance costs by 25%.
He said he was asked to take a “guillotine approach” to non-tariff measures by determining if each regulation was legal, necessary or efficient, with a focus on old rules which were no longer relevant. The work revealed that there were more than 5,000 non-tariff measures on the books in Malaysia.
“This was an extensive and tedious effort involving 18 ministries covering products ranging from pesticides, drugs, animals, foods, a whole lot of NTMs,” Ismail said. “This involved many stakeholders including the industrial sector.”
MPC, a statutory body under Malaysia’s Ministry of International Trade and Industry, used UNCTAD’s global TRAINS database to identify and locate the measures across the 18 Malaysian ministries and try to understand their purpose.
The NTM data for countries in the Association of Southeast Asian Nations (ASEAN) were collected jointly and are currently being updated by the Economic Research Institute for ASEAN and East Asia (ERIA) and UNCTAD, together with respective governments.
“We classified the NTMs using the UNCTAD system, so we now have a baseline for NTMs in Malaysia,” Ismail said. “Each ministry had an NTMs working group with technical experts from industry and academia.”
The work revealed that the ministries of health and agriculture between them accounted for about 80% of all non-tariff measures in Malaysia, Ismail said.
“Moving forward, we want to establish a central database for NTMs in Malaysia, and of course we will work with UNCTAD,” he said. “We hope this will improve productivity in Malaysia.”