By TMR / Graphic By TMR
The Ministry of International Trade and Industry (MITI) has set up a task force to monitor and assess the impact of the US-China tariff spat and warned of the “vicious protectionist cycle” that is creeping into global markets.
The ministry said the task force would formulate strategies to mitigate the impact of trade protectionism against Malaysia.
“The task force will also act as a focal point for stakeholders to present their views, comments and feedback,” MITI said in a statement.
Washington and Beijing are on a trade war path, threatening tariffs hikes and other levies for goods from each country.
The US-China trade spat had sent equity markets and the yuan plummeting as Beijing threatened for an equally painful retaliation over
Washington’s decision. Global markets are also worried as the world’s two largest economies’ spat would harm growth, especially exporting and emerging economies.
The US and China are Malaysia’s biggest trading partners. Any slowdown in both economies will impact the country’s exports.
“It is a real concern that, in recent months, we have seen the spectre of protectionism on the rise,” it said.
“Trade conflict is never a beneficial move for any country, simply because trade restrictions and retaliatory measures would hurt everyone, especially small countries,” MITI said.
The ministry said the US and China conflict had not only affected both countries, but had sparked retaliatory measures by many other aggrieved countries — including the European Union, Turkey and Canada.
“Looking at this upsetting trend, a vicious protectionist cycle will ensue and pose a threat to world trade,” MITI said.
Malaysia wants countries to halt the spread of protectionism, and instead, be actively engaged in finding amicable solutions and resolving trade issues through multilateral dialogue such as the World Trade Organisation.
“The Malaysian government will continue to work with all countries to ensure that protectionism is not the preferred path in any country’s policy formulation.
“Malaysia will also highlight our concerns at the Asean and Asia-Pacific Economic Cooperation fora,” MITI said. — TMR