4 Asian Tigers

201
Economic Growth
and International
Trade
Japan and Malaysia
Analysis of the various impacts of free trade and discovering
examples of each of the economies under review and their
relative success, we have come to the conclusion that “Free
Trade” is one of the best available solutions to get ourselves out
of the chaotic mess that we find ourselves in and there is a lot
we can learn from our Asian counterparts on how they have
used this weapon up their arsenal to establish themselves on
the world stage.
Submitted To: Mr. Akhtar Lodhi

Submitted By: Muhammad Saiq Lakhani
Ali Bilawal Khan
Faizan Shahzad
5/23/2010
Economic Growth and International Trade
Table of Contents
S.No. Contents Page #

1 Introduction 8
2 Benefits of Free Trade 9
3 Terms-of-Trade Effect of Growth 11
Effect of Economic Growth on

4 11
International Trade
5 Arguments against Free Trade 12
6 Impact of Free Trade on the World 13
7 Free Trade Agreements (FTAs) 19
Specific Advantages of promoting

8 20
FTAs
Points to bear in mind in

9 20
promoting FTAs
10 JAPAN
11 Introduction 21
12 Motivations for Free Trade 22
13 Japanese Growth 23
14 Challenges 24
15 MALAYSIA
16 Introduction 37
17 Statistics of Malaysian Economy 37
18 Tiger Economy 38
19 External Trade 39
20 Free Trade Efforts 40
21 Major Imports and Exports 41
22 Export Commodities 41
23 Exports Partners 42
2
24 Import Commodities 42
25 Import Partners 42
26 Trade Relations with U.S. 43
27 Trade with U.S. 43
28 Top Exports to U.S. 43
Fastest Growing Malaysian

29 44
Exports
30 Top Imports from U.S. 44
Fastest Growing Malaysian

31 45
Imports
32 Comparative Trade Advantages 45
33 Challenges 45
34 Conclusion 46
35 References 44
3
ACKNOWLEDGEMENT
First of all, we would like to thank Allah Almighty for giving us the opportunity to
study in such a prestigious institution and under the guidance of a brilliant
faculty.
We would also like to thank our “Global Economic Environment” teacher, Mr.
Akhtar Lodhi, for his continued guidance and support for our topic and not least
through out the semester.
We would also like to thank our families for bearing with us when we devote
ourselves to the project and become unavailable to them in the process.
4
PREFACE
This report is primarily based on exploring the pros and cons of free trade by
analyzing the impacts of free trade on Asian power house i.e. Japan as a bench
mark for Asia.
Moreover, this topic is also being viewed from the developing countries
perspective including the analysis of the economies of Asian Tigers with
particular emphasis on Malaysia and Taiwan.
This report is aimed to enhance the understandings of the various impacts of

free trade and the relative success of the economies under study.
5
RESEARCH POINT
In today’s era of fierce competition, there is very little margin of error when it
comes to formulating economic policies. If the policy frame work is not setup
correctly, there is little chance the economies would survive. This is evident
from the innumerable impacts of free trade on the Asian power house Japan and
the developing economies of the Asian Tigers.
The appropriate frame work and policies of an economy becomes even more
important in the case of our country where there is acute shortage of natural
resources and potential export bonanzas.
Therefore, our research is aimed to promote ‘better understanding’ of the

various impacts that free trade can have, their different implications, and to find
out what lessons can we learn from the economies under review.
6
THESIS SENTENCE
After a thorough analysis of the various impacts of free trade and discovering
examples of each of the economies under review and their relative success, we
have come to the conclusion that “Free Trade” is one of the best available
solutions to get ourselves out of the chaotic mess that we find ourselves in and
there is a lot we can learn from our Asian counterparts on how they have used
this weapon up their arsenal to establish themselves on the world stage.
7
INTRODUCTION
The act of opening up economies is known as "free trade" or "trade

liberalization." It usually benefits the larger, wealthier countries whose big
companies are looking to expand and sell their goods abroad. In the one sector
where developing countries have the most to gain - agricultural goods -
wealthier countries maintain the highest level of "protection" of their own
markets.
Globalization has made the world a much smaller place. Global trade refers to
the act of buying and selling goods and services between countries. Today
these goods and services can travel further and faster so that - for instance -
products from all over the world can be found at your corner shop. This can be
anything from fruits and vegetables, to cars, banking services, clothing, and
bottled water.
The scale and pace of this kind of trade has only increased over time, and has
become a very powerful tool. International trade is considered a prime driver of
how well a country develops, and affects very much how well the economies of
different countries are doing.
The act of opening up economies is known as "free trade" or "trade

liberalization." Trade liberalization means opening up markets by bringing down
trade barriers such as tariffs. Doing this allows goods and services from
everywhere to compete with domestic products and services but in practice the
set-up of global trade rules and the way they are administered by the World
Trade Organization, works best for those countries who are already rich, and
increases the gap between them and poorer countries who are already
struggling to compete. The part of the problem is that trade is not always equal.
It is not just a tool - it can also be a weapon. When countries put restrictions,
such as tariffs, on goods from other countries, imported goods become more
expensive and less competitive than goods from their own country. Another
thing that can be done is subsidizing domestic businesses. This means that
8
governments give money or other forms of support to local or domestic

businesses, to make sure that they are cheaper over imported products and
services. This can allow unsuccessful and inefficient businesses to do well, since
they receive all kinds of government support. And while these businesses
continue to grow, smaller or local producers, especially in many poorer
countries - those that need support the most - are being destroyed.
Any measure like this is called "protectionist," since it has the effect of closing
off a country's markets to goods from other countries. Many wealthy countries
in Europe, as well as the US and Japan use these tactics to support their own
domestic economies, making it impossible for smaller, or less developed
countries to gain a foothold in the global marketplace. As they go about
protecting and closing off their own markets, many of these very same
countries are creating double standards, by forcing other countries to open up
their markets.
Free trade is a complex concept-it can at least be classified according to the

geographic areas in which it applies, and for whom it applies. Small world's
networks modeling have demonstrated that preferred locations have a
clustering and concatenation effect such that location confers advantages that
aren't a consequence of better business intelligence or invention. In global trade
with trans-nationally assembled products the local and small business perhaps
has a permanent disadvantage and the global business the preferred location.
Free trade disadvantages nations and good citizens and promotes the trans-
national and irresponsible capitalist class without regard to the environment's
harm or the reduction in the quality of life for the populace in some cases-for
the quest for a pecuniary sort of profit in business may regard government as a
hindrance and the best interests of a nation and its people as concepts of a
leftist nature.
BENEFITS OF FREE TRADE

9
The Theory of Comparative Advantag

This explains that by specializing in goods where countries have a lower
opportunity cost, there can be an increase in economic welfare for all countries.
Reducing Tariff Barriers Leads To Trade Creation
Trade creation occurs when consumption switches from high cost producers to
low cost producers
Increased Exports
As well as benefits for consumers importing goods, firms exporting goods where
the UK has a comparative advantage will also see a big improvement in
economic welfare. Lower tariffs on UK exports will enable a higher quantity of
exports boosting UK jobs and economic growth.
Economies of Scale:
If countries can specialize in certain goods they can benefit from economies of
scale and lower average costs, this is especially true in industries with high fixed
costs or that require high levels of investment. The benefits of economies of
scale will ultimately lead to lower prices for consumers.
Increased Competition.
With more trade domestic firms will face more competition from abroad
therefore there will be more incentives to cut costs and increase efficiency. It
may prevent domestic monopolies from charging too high prices.
Trade is an Engine of Growth
World trade has increased by an average of 7% since the 1945, causing this to
be one of the big contributors to economic growth.
Make Use of Surplus Raw Materials
Middle Eastern counties such as Qatar are very rich in reserves of oil but without
trade there would be not much benefit in having so much oil. Japan on the other
hand has very few raw material without trade it would be very poor.
Tariffs May Encourage Inefficiency
If an economy protects its domestic industry by increasing tariffs industries may
not have any incentives to cut costs.
10
TERMS- OF- TRADE EFFECT OF GROWTH
The terms of trade have an inverse relationship with the volume of trade and
are by no means beneficial for the growth and development of international
trade or local economy for that matter
EFFECT OF ECONOMIC GROWTH ON INTERNATIONAL

TRADE
11
ARGUMENTS AGAINST FREE TRADE
Infant Industry Argument:

If developing countries have industries that are relatively new, then at the
moment these industries would struggle against international competition.
However if they invested in the industry then in the future they may be able to
gain Comparative Advantage. This shows that comparative advantage can
change over time. Therefore protection would allow them to progress and gain
experience to enable them to be able to compete in the future.
The Senile Industry Argument:
If industries are declining and inefficient they may require large investment to
make them efficient again. Protection for these industries would act as an
incentive to for firms to invest and reinvent themselves. However protectionism
could also be an excuse for protecting inefficient firms
To Diversify The Economy:
Many developing countries rely on producing primary products in which
they currently have a comparative advantage. However relying on agricultural
products has several disadvantages
12
• Prices can fluctuate due to environmental factors

• Goods have a low income elasticity of demand. Therefore with economic
growth demand will only increase a little
Raise revenue for the govt.
Import taxes can be used to raise money for the govt however this will
only be a small amount of money
Help the Balance of Payments
Reducing imports can help the current account. However in the long term this is
likely to lead to retaliation
Cultural Identity
This is not really an economic argument but more political and cultural. Many
countries wish to protect their countries from what they see as an
Americanization or commercialization of their countries
Protection against Dumping

The EU sold a lot of its food surplus from the CAP at very low prices on the world
market. This caused problems for world farmers because they saw a big fall in
their market prices
Environmental Factors
It is argued that free trade can harm the environment because LDC may use up
natural reserves of raw materials to export. Also countries with strict pollution
controls may find consumers import the goods from other countries where
legislation is lax and pollution allowed. However supporters of free trade would
argue that it is up to individual countries to create environmental legislation.
IMPACT OF FREE TRADE ON THE WORLD
The free market has been lauded as a hallmark of a democratic and free
society. G-8 countries convene every year, discovering ways to spread the good
news of this economic gospel. Domestically, the free market promises that the
good life could be held by all if one would just work hard enough at his dream.
Yet not all seems to be rosy with this dream. On an international and domestic
13
level, the free market has not given the liberation it has promised. In some
ways, it has only cemented the inequality already there.
This same economic story could be told in Indonesia, where the Chinese only
account for three percent of the population yet control seventy percent of the
economy. Liberation of Indonesia in 1998, which the US hailed as a grand
celebration for democracy and free markets, only served to spark the violence
in Indonesia that still continues until this day. One way to explain this
phenomenon is that since the Indonesian natives were never accorded dignity,
they used their initial days of freedom to express the violence that had been
brewing for so long, much the same way an adolescence rebels when he finds
freedom from an oppressive family. Yet all the violence and all the rhetoric of
freedom spinning have still not given either the Filipinos or the Indonesians
economic destiny. Global financiers still hold prime real estate and control the
markets within the region.
On the American domestic front, much of the same reality takes place as
overseas. Companies feel that they are generous when they start out paying a
dollar or two above minimum wage, saying that teenagers who live at home
take many of these jobs. While this is true, many of these teenagers are not
saving up for a car as much as needing the job to help subsidize their families.
And many more of these people who live at minimum wage are not teenagers
without children, but teenagers and adults with dependent children to support.
Generally speaking, three hundred dollars a week before taxes does not provide
for the necessities of life in any part of the country; very few regions of have
living wage laws. And while people like Bill O'Reilly legitimately claim to pay a
higher amount of taxes when they file to the government, the working poor are
subject to the same sales tax that the affluent are. A man making $100,000 a
year may congratulate himself on being frugal by buying shampoo at the bulk
discount store, but the same two dollar shampoo may be a "splurge" for the
man on minimum wage because he can afford nothing more. Both pay the same
amount in sales tax, regardless of who can afford it more.
14
The answer to the free market problem is not necessarily to destroy it and
replace it with socialism. Switching economic styles may just shift the same
problem into different squares; the economic oppression may just go from an
individual entrepreneur to the government itself, accomplishing nothing. Adding
to this, the rich, even in a socialist economy have the money to lobby the
government, much like is under capitalism, so then all has changed is the
semantics.
What needs to be done is to introduce a sense of fairness and morality to the

global market, and a reality check that recognizes where the free market
exacerbates the innate prejudices already present. Throwing a few dollars at the
problem and declaring elections will do little to change the climate when greed
rules the marketplace. In the case of the international market, those who
employ natives need to be more generous in their application of economics, for
example, making sure that their employees are treated with respect. Those who
are doing international business would need to see the people they are
employing as equal human beings who have just as much standing as they do in
the human scheme of things, and not as a lesser racial or ethnic group.
In the case of the domestic market, much of the same principle applies.
Those who are in the highest corporate echelons need to reprioritize what it
means to be successful, and be willing to divert some of the profits from making
their corporation bigger to the coffers of their employees. Middle class
consumers may become more conscientious in their buying as some of the cost
is diverted to them, perhaps limiting resources exploited for consumer
purposes, but if one considers his fellow man to be his brother, a higher price
that makes sure his brother is fed well will not be as bothersome.
An exact distribution of moneys is not necessary, and may not even be feasible
without major outside control factors, illogical to employ in a free society. But a
decent living wage for all people is only moral. In this respect, when the lessons
of fairness and regard of others as equal human beings worthy of dignity takes
place, perhaps the golden dream of free market can work its wonders.
15
Free trade needs to be placed within a rational context regarding to what ends it
serves and how well it serves those ends. Free trade isn't the same in all times
and places. If the Kennedy's or the Bushes of the world war one and two eras
freely traded with the Nazis of Germany that would have been a disadvantage
to the national interests of the people of the United States that opposed fascism
in Europe, while trading with Germany today is more of an advantage for
Americans because BMW will produce a better electric car than Chevy next year
very most likely, and quiting reliance on fossil fuels for transportation is a way
to decrease trade deficits and keep cash in the United States for investment
here. Free trade and capitalism cannot replace democracy and good
government of the people, by the people and for the people, yet if a
government does support and reinforce a national democracy free trade can be
one way of creating comparative advantage internationally and of course
domestically.
Free trade does not develop on an even field globally. Free trade, free speech
and other civil rights develop at a differential rate. The founders would not have
demonstrated a fascist's disregard for democracy within secure boundaries as
do the corporatist spawn bought and paid for in the U.S. Congress. Sycophantic
stooges of international stooges are to rave, collectivist and hip to enjoy a
nation and democracy responsibly and will seal their own probable national
doom as have many prior civilizations and nations sated with gluttony and
dulled too much for rational political intelligence. 'Talk' radio is itself a spoiler
for corporatist power advancing corrupted ideas to be able to add the
conservatives to the liberals in the globalist, collectivist's pockets.
Capitalism is fine when democracy still exists as a rational government

defending a nation's vital public interests, but when corporations and corporate
values dwarf and purchase the government irrational profit motives replaces
government and national interests dry up deleteriously replaced by ad hoc elite
class collectivists exploiting the world like crazed thirsty camels chasing water
holes in a broadening period of global warming.
16
IMPLEMENTATION OF FREE TRADE
The biggest misunderstanding underlying the concept of "free trade" is that free
trade has to somehow be implemented or instituted, usually by the state. This is
the polar opposite of the truth: free trade is the natural state of humanity. Free
trade can only be taken away or diminished; it cannot be somehow enhanced or
magnified.
We are born on this earth to engage in free trade and exchange. The ignorance
of this basic fact is evident in the belief that states or nations must go through
some great process or sign elaborate treaties and documents to institute free
trade. This is equivalent to some government declaring that all citizens now
have the right to "free air". Treaties and documents seek to control and limit
trade, not to enhance it.
In collusion with these misunderstandings is the idea that "nations" engage in

free trade. Again, this is as far from reality as is possible. The idea that large
17
"corporations" engage in and promote free trade is connected to this same

principle. Multinational corporations usually engage in controlled and planned
trade immediately after the signing of such documents. Free trade agreements
are almost always promoted to encourage controlled trade and benefit
multinational corporations.
True free trade is simply unbridled and consentual exchange between two or
more humans. This can involve their time as labor or some product of their
labor. This type of free trade or exchange has probably been going on since day
one. No documents or treaties are necessary to complete this simple and
natural transaction. The world didn't somehow become complicated and
therefore necessitate copious paperwork to ensure free trade. Paperwork,
documents or treaties are always limitations on what humans do naturally on
the earth, engage in exchange. Free trade is defined fundamentally as
unrestrained exchange free of force, either internal force within the exchange or
external force. If we accept this definition, then any treaty, agreement or
document is an "outside force" limiting the scope or "freedom" of the exchange
or trade.
Promotion of free trade is always an oxymoron. Free trade cannot be

"promoted", as it already exists in our natural state. However, controlled and
forced trade certainly can be promoted in many ways. As mentioned, treaties
and documents seek to control and promote certain types of exchange in order
to benefit some and disadvantage others. This is always a loss of overall
exchange freedom, not a gain. To understand this, we must clearly view the
fundamentals of trade or exchange. All exchange and trade originates locally.
We trade first with those closest to us. It is free economic principles that govern
this. It always takes more energy to trade with those further away. Because of
this, products that are further away must have more value than comparable
local products. The cost of transport must be accounted for. If this principle of
locality is allowed to freely develop, exchange and distribution of products
would organize balancing ease of production and distance from markets.
18
Every product would be produced and distributed in its most efficient manner. If
the cost of transport justified the greater ease of producing apples twenty miles
from their final market instead of five miles, this would occur. If it were
somehow justified to produce, pack and ship an item overseas and transport the
products on a boat to some distant and strange foreign land, this would also
occur. But, this transport over great distances must also be examined for its role
in a true free trade.
Free trade to actual is "free" must also be free of subsidy or coercive promotion.
Subsidy is the forced collection of funds through taxation and the insertions of
those same funds into economic transactions. This can take the form of actual
payment or some tax break. A tax break has virtually the same effect as a
delayed payment. Price can be supplement or discounted through subsidy.
Whatever form it takes, it violates the freedom of the taxpayer, who if given the
choice would most likely not partake in the trade or transaction and violates
freedom of trade by advantaging one party and disadvantaging another.
However, the vilest and most unrecognized form of subsidy limit freedom of
trade is that of transportation. As we mentioned, free trade organizes itself
naturally based on locality. Any forced collective input into transportation
destroys this basic principle. Whenever a road or bridge is built out of public
funding, freedom of trade is thwarted. It is true that public transportation
infrastructure promotes a form of trade. It, much like trade agreements and
other subsidies, promote "controlled" trade. Trade becomes based on proximity
not to local consumers, but to public transportation. Access to highways,
publicly built airports and ports becomes more important than what products
are needed locally. In fact, local demands are put aside to satisfy foreign
markets. We are all aware of local products being unavailable while the shelves
are stocked with far away items produced thousands of miles away. This is not
an example of free trade but rather controlled and subsidized trade.
In doesn't take a genius to realize that something is amiss when locally

produced lettuce sells for twice what a head grown in South America and
19
transported by truck, airplane and again by truck to our local shelves. The
true costs, transportation and otherwise, have been socialized and the result
cannot be referred to as "free trade". All this simply points out the fact that
trade has become a "commodity", much like everything else. Trade or the rights
to trade is bought and sold, molded and determined by agreements, laws and
subsidy.
The heart of trade, the product, takes a back seat to the requirements and
restrictions of the transaction. The foundation of free trade, locality, becomes
subordinate to the political "position" of the trade partners. What was originally
free and available to all of us, the free exchange of products and labor with
others, has become marginalized and distributed by those in control of trade to
those they seek to advantage. It seems the more any concept related to
freedom is espoused upon and pronounced loudly publicly, the less there really
is of it!
FREE TRADE AGREEMENTS (FTAs)
Amid the advance of economic globalization, it is important to maintain and

strengthen the free trade system. While the World Trade Organization continues
to play an important role in this effort, free trade agreements (FTAs) offer a
means of strengthening partnerships in areas not covered by the WTO and
achieving liberalization beyond levels attainable under the WTO. Thus, entering
into FTAs is a highly useful way of broadening the scope of Japan's economic
relationships with other countries.
The European Union and the United States have pursued policies oriented both
toward negotiations under the WTO and the creation of large-scale regional
trade frameworks. The current round of WTO negotiations could be the last
multilateral trade negotiations prior to the creation of these large-scale
integrated regional frameworks. It is necessary for Japan as well to address not
20
only WTO negotiations but also FTA trends in strengthening its economic
relationships with other countries.
SPECIFIC ADVANTAGES OF PROMOTING FTAs
Economic Advantages
FTAs lead to the expansion of import and export markets, the conversion to
more efficient industrial structures, and the improvement of the competitive
environment. In addition, FTAs help reduce the likelihood of economic frictions
becoming political issues, and help expand and harmonize existing trade-related
regulations and systems.
Political and Diplomatic Advantages
FTAs increase Japan's bargaining power in WTO negotiations, and the results of
FTA negotiations could influence and speed up WTO negotiations. The
deepening of economic interdependence gives rise to a sense of political trust
among countries that are parties to these agreements, expanding Japan's global
diplomatic influence and interests.
POINTS TO BEAR IN MIND IN PROMOTING FTAs:

Conformity with the WTO Agreements
Three points must be ascertained. First, the duties and other regulations of
commerce should not be higher or more restrictive than the corresponding
duties and other regulations of commerce prior to the formation of the FTA.
Second, they must eliminate duties and other restrictive regulations of
commerce with respect to substantially all the trade. Third, they must ensure
completion of RTAs within a 10-year period, at least in principle. The reference
to "substantially all the trade" implies that countries must achieve a standard of
liberalization that compares favorably to international standards in terms of
trade volume (based on the figures reported, the NAFTA average is 99%, while
the average for the FTA between Mexico and the EU is 97%).
Impact on Domestic Industries
21
A country cannot secure the advantages of FTAs without enduring some pain
arising from the opening of its markets, but this should be regarded as a
process that is necessary for raising the level of Japan's industrial structures.
Unavoidable issues will emerge concerning various areas of regulatory control,
including movement of natural persons, as well as the opening of markets and
the implementation of structural reforms in the agricultural sector. With due
respect for political sensitivities, unless a stance is taken linking FTAs to
economic reforms in a country, it will not succeed in making them a means of
improving the international competitiveness of itself as a whole.
JAPAN (THE ASIAN POWER HOUSE)
INTRODUCTION
Japan’s trade policy has historically centered on multilateral negotiations and

dispute resolution mechanisms. The rules of the General Agreement on Tariffs
and Trade (GATT) and the World Trade Organization (WTO) have provided Tokyo
an ability to interact with its trade partners on an equal basis. Given its global
trade interests, a contentious bilateral past with the United States, and historic
legacy with Asian countries, particularly Korea and China, reliance on the
multilateral system has helped promote Japan’s trade interests. Over the past
five years, Japan has shifted course somewhat by pursuing negotiations in the
WTO but by also seeking free trade agreements (FTAs) and Economic
Partnership Agreements (EPAs) with mostly Asian countries. An FTA is an
agreement between two countries or regional groupings to eliminate tariffs and
other trade barriers, while an EPA goes further by also attempting to facilitate
the free movement of people and capital among the partners to an agreement.
Nonmembers find their exports discriminated against. As a practical matter,
officials at Japan’s Ministry of Economy, Trade, and Industry (METI) acknowledge
that there is little difference between an FTA and EPA. METI, however, prefers
the EPA label based on the view that it does less to provoke domestic political
opposition than the “free trade” moniker. The pursuit of FTAs is occurring
22
worldwide with nearly 300 estimated to be currently in effect. The United States
has an extensive FTA program and agenda, and has FTAs in effect with two
Asian-Pacific countries — Singapore and Australia. Europe has been pursuing a
similar course for years. China and six ASEAN states (Thailand, Malaysia,
Indonesia, Philippines, Singapore, and Brunei) are in the process of establishing
an FTA by 2010. Now Japan is trying to catch up.
Economists still disagree about the merits of negotiating FTAs on the grounds
that discrimination may undermine the multilateral trading system while others
believe that FTAs promote multilateral deals in the long run. The concern is that
FTAs could lead to a “spaghetti bowl” of overlapping conflicting trading
partnerships each with its own set of rules at the expense of a more unified and
non-discriminatory set of multilateral rules. But domestic support in Japan for an
FTA program appears strong. Prime Minister Koizumi is firmly behind the
approach, as well as the ruling LDP-Komeito coalition. While the Democratic
Party, the major opposition party, supports the general thrust of the policy,
some members maintain that the United States and China should be considered
as prospective FTA partners. Given its own aggressive FTA program, the United
States is hardly in a position to criticize Japan’s new policy orientation. But it has
considerable interest in whether Japan’s policy evolves in a manner that is
supportive of U.S. interests in Asia — which include promoting a stable Balance
of power and insuring that U.S. trade and investment interests are not
discriminated against in the region.
MOTIVATIONS FOR FREE TRADE

Japan’s FTA program has been motivated by a combination of economic and
political objectives. The most important entail avoidance of becoming isolated
as other major trading countries actively pursue FTAs, energizing domestic
economic activity, and promoting Japanese influence in Asia. Japan’s concern
about the possible emergence of economic blocs in the Americas and in Europe
goes back to the early 1990s. In 1994 the United States entered into the North
America Free Trade Agreement (NAFTA) and announced plans to create a Free
23
Trade Area of the Americas. Europe at the same time was busy entering into
preferential trade agreements and subsequently has come to conduct trade
relations on a multilateral or non-discriminatory basis with only a handful of
trading partners, including Japan and the United States. In 1999 the collapse of
multilateral trade negotiations at the WTO Ministerial in Seattle shook Japanese
confidence in the future of multilateralism. China’s decision in 2001 to negotiate
an FTA with ASEAN countries was also a seminal event, providing more
ammunition for those in Japan that were advocating a change of policy course.
The case for developing an FTA program was also driven by Asian economic
trends and opportunities. METI officials see East Asia as the fastest growing
region in the world and a region that is increasingly vital to Japan’s economic
future.8 FTAs and EPAs are viewed as one way to deepen economic ties with
East Asia and facilitate a new division of labor and production sharing. The
experience of the European Union has demonstrated that, as institutional
integration develops, so too does intra-regional division of labor that leads to a
more effective production network and to more efficient industrial structures. As
a result, METI maintains that both individual parties to an FTA, as well as the
region as a whole, can enjoy more robust economic growth powered by an
expansion of exports and imports. Reform-minded METI officials also hope that
an aggressive FTA-EPA program will serve as a force for promoting domestic
agricultural reforms. By entering into negotiations with trading partners that
continue to demand liberalization of Japan’s protected agricultural sector, it is
hoped that domestic support for programs that might aid farmers transition to a
less protected environment would be proposed and implemented. Finally, many
decision makers see FTAs providing Japan with varied political and diplomatic
advantages. These ranges from increasing Japan’s bargaining power in WTO
negotiations to helping Japan better compete with China for influence in Asia.
Under the view that FTAs symbolize special relationships based on political
trust, Japan hopes to bolster its diplomatic influence on a range of political and
security issues.
JAPANESE GROWTH
24
More than a decade ago, there was concern in the United States that Japan was
an economic threat because its economy was too strong. Subsequently, U.S.
policymakers have come to believe that Japan is more of a problem when its
economy is weak. A lackluster growth position in Japan not only affects U.S.-
Japan trade and financial ties adversely, but also undermines growth of the East
Asian economy. Moreover, an economically strong Japan is needed to serve as a
counterweight to a rising China. Despite regaining a good deal of financial
stability in recent years, Japan’s economy remains weak. With growth
projections of no more than 1.3%-1.6% over the next five years, Japan will not
be in a position to play much of a locomotive role either for the United States or
the region. This assessment is not likely to be altered by the estimated weak
impact of Japan’s FTA program on growth. Lagging China in FTAs with Asian
countries, as well in other trade and investment linkages, Japan currently cannot
be said to be moving rapidly to establish itself as a credible counterweight to a
rising China.
CHALLENGES
Japan’s ability to promote its economic interests through an aggressive FTA/EPA
program is constrained by protection of its agricultural sector and rigid
immigration policies. While the FTA/EPA negotiations themselves provide
pressures for more open policies, the ministries charged with these portfolios
(Agriculture and Justice, respectively) have not yet advanced effective reform
policies that would make a substantial difference.
Agriculture:
Agriculture accounts for only 1.3% of Japan’s GDP and 4.6% of its total
employment, but remains heavily supported and protected from import
competition. According to the OECD, support to producers as a percent of gross
receipts was 58% in 2002-04, down from 61% in 1986-1988, but still almost
twice the OECD average. Rice, wheat, other grains, meat, sugars, and dairy are
25
the most heavily supported commodities. Tariff-rate quotas are employed to

shield these commodities from international competition, resulting in food prices
that in Tokyo are on average 130% higher than the rest of the world. Many in
Japan believe that support for agricultural protection will disappear over time.
They cite the declining share of the population engaged in agriculture and the
high percentage of farmers (60%) who are over 65 years old and who derive the
majority of their income from non-agricultural activities. In the process, the hold
of the agricultural lobby is said to be slipping as evidenced by the slippage of
the LDP in the 2004 Upper House election.33 The LDP derives most of its
support from rural areas, in part, due to Japan’s disproportionate electoral
districting system; each rural vote is worth an estimated 2 urban votes.
However, policy reforms to help move Japan away from considerable
agricultural protection have been slow to materialize. While the Ministry of
Agriculture, Forestry, and Fisheries has released papers that have raised the
idea that Japan should stop wasting resources on crops that can be imported
more cheaply, little follow-up has occurred. These reports advocate
consideration of policies that would increase competition in the sector by
encouraging new entrants and providing direct compensation to farmers
through tax incentives in lieu of price controls and high tariffs. In large measure,
this is due to opposition from influential members of the LDP’s “farm tribe.” In
the absence of a substantive reform plan to make Japan’s farm sector more
efficient, agriculture is bound to continue to be a major stumbling block for
concluding economically meaningful FTAs/EPAs.
Immigration
Among industrial nations, Japan maintains the tightest policy towards accepting
foreign workers and remains extremely cautious about changing course.
However, due to a declining birthrate and an aging workforce, Japan’s decision-
makers are under increased pressure to accept more foreign workers to keep
the economy from stagnating. The demands of FTA negotiating partners such as
the Philippines and Thailand to liberalize Japan’s labor market prohibitions have
brought added pressures and debate about a more open door policy. A 1999
26
government employment plan called for Japan to promote foreign employment

in “specialized and technical areas,” but a “careful approach based on national
consensus” towards manual workers. Despite the needs in certain sectors to
accept more foreign workers, such as nurses and care providers, public support
is lacking. Concerns about increased crime rates, the social costs of accepting
more foreigners, and an adverse impact on Japanese homogeneity tend to
dominate, along with the resistance of labor unions. In addition, neither the LDP
nor the Democratic Party stands clearly in favor of liberalizing immigration. The
significance of the immigration issue transcends the problems it creates for
Japan reaching closure on FTA negotiations with its Asian partners, such as
Thailand and the Philippines. The continuation of exclusionary immigration
policies may also undercut Japan’s ambition to play a leading role in a more
integrated and interdependent Asian economy.
27
28
The Share of Asian Economies in Japanese Trade
The Structure of Japanese Exports to Asia
The Structure of Japanese Imports from Asia
29
30
The Impact of Trade Liberalization among Japan, China and ASEAN

Countries
31
32
33
34
35
36
MALAYSIA
INTRODUCTION
37
Malaysia is a growing and relatively open state-oriented market economy. The

state plays a significant but declining role in guiding economic activity through
macroeconomic plans. In 2007, the economy of Malaysia was the 3rd largest
economy in South East Asia and 29th largest economy in the
world by purchasing power parity with gross domestic product for 2007
estimated to be $357.9 billion with a growth rate of 5% to 7% since 2007. In
2009, the nominal GDP was US$207,400 billion, and the nominal per capital GDP
was US$8,100.
The Southeast Asian nation experienced an economic boom and underwent

rapid development during the late 20th century and has a GDP per capita of
$14,800, being considered a newly industrialized country. On the income
distribution, there are 5.8 million households in 2007. Of that, 8.6% have an
monthly income below RM1,000, 29.4% had between RM1,000 and RM2,000,
while 19.8% earned between RM2,001 and RM3,000; 12.9% of the households
earned between RM3,001 and RM4,000 and 8.6% between RM4,001 and
RM5,000. Finally, around 15.8% of the households have an income of between
RM 5,001 and RM 10,000 and 4.9% have an income of RM 10,000 and above.
As one of three countries that control the Strait of Malacca, international trade
plays a large role in its economy. At one time, it was the largest producer
of tin, rubber and palm oil in the world. Manufacturing has a large influence in
the country's economy.
STATISTICS OF MALAYSIAN ECONOMY
GDP $381.1 Billion (2009)

GDP GROWTH -2.2% (2009)
GDP PER CAPITA $14,800 (2009)
GDP BY SECTOR Agriculture (10.1%); Industry (42.3%); Services (47.6%)
(2009)
INFLATION (CPI) 0.4% (2009)
POPULATION BELOW 3.5% (2007)
POVERTY LINE
LABOR FORCE BY Agriculture (13%); Industry (36%); Services (51%) (2007)
OCCUPATION
UNEMPLOYMENT RATE 5% (2009)
INDUSTRIES Rubber and palm oil processing and manufacturing, light
manufacturing industry, electronics, tin mining and
smelting, logging and processing timber, tourism,
petroleum production and refining, logging
EXPORTS IN VALUE $156.4 Billion (2009)
38
MAJOR EXPORTS Electronic equipment, petroleum and liquefied natural gas,

wood and wood products, palm oil, rubber, textiles,
chemicals
MAJOR EXPORT PARTNERS Singapore 13.9%, China 12.2%, United
States 10.9%, Japan 9.8%, Thailand5.4%, Hong Kong 5.2%
(2009 est.)
IMPORTS IN VALUE $119.5 billion (2009 est.)
MAJOR IMPORTS Electronics, machinery, petroleum products, plastics,
vehicles, iron and steel products, chemicals
MAJOR IMPORT PARTNERS China 13.9%, Japan 12.5%, Singapore11.1%, Thailand 6%,
Indonesia 5.3%, South Korea 4.6%, Tawian4.2%,
Germany 4.2% (2009 est.)
TIGER ECONOMY
Macro-Economic Trend
This is a chart of trend of gross domestic product of Malaysia at market
prices estimated by the International Monetary Fund with figures in millions of
Malaysian Ringgit.
GDP Exchange Inflation Index Per Capita Income

Year
(in millions) (1 USD to MYR) (2000=100) (as % of USA)
1980 54,285 2.17 51 14.78
1985 78,890 2.48 64 11.44
1990 119,082 2.70 70 10.47
1995 222,473 2.50 85 15.69
2000 343,216 3.80 100 11.47
2005 494,544 3.78 109 12.67
For purchasing power parity comparisons, the US Dollar is exchanged at 1.70

Ringgit only. Average wages in 2007 hover around $30–37 per day.
From 1988 to 1997, the economy experienced a period of broad diversification

and sustained rapid growth averaging 9% annually.
By 1999, nominal per capita GDP had reached $3,238. New foreign and
domestic investment played a significant role in the transformation of Malaysia's
economy. Manufacturing grew from 13.9% of GDP in 1970 to 30% in 1999,
while agriculture and mining which together had accounted for 42.7% of GDP in
1970, dropped to 9.3% and 7.3%, respectively, in 1999. Manufacturing
accounted for 30% of GDP (1999). Major products include electronic
39
components – Malaysia is one of the world's largest exporters of semiconductor

devices – electrical goods and appliances.
Foreign funds were attracted to invest making the local money market and
bourse liquid. This created opportunity for local businesses to raise capital on
the KLSE, and carry out infrastructure development in areas like
telecommunications, highways and power generation to meet bottlenecks
caused by rapid industrialization. An intense labor shortage created
employment for millions of foreign workers. Subsequent events show that more
than 50% were illegal.
The influx of foreign investment led to the KLSE Composite index trading above
1,300 in 1994 and the Ringgit trading above 2.5 in 1997. At various times the
KLSE was the most active exchange in the world, with trading volume exceeding
even the NYSE. The stock market capitalization of listed companies in Malaysia
was valued at $181,236 million in 2005 by the World Bank.
Concerns were raised during the time about the sustainability of the rapid
growth and the ballooning current account. The mainstream opinion prevalent
at that time was that the deficit was temporary and would reverse once
imported equipment started producing for export. In spite of that, measures
were taken to moderate growth especially when it threatened to overheat into
the double digits. The main target was asset prices, and restrictions were
further tightened on foreign ownership of local assets. Exposure of local banks
to real estate loans were also capped at 20%.
As was widely expected, the current account deficit did narrow steadily, year to
year, from 9% to 5% of GDP.
Malaysia has the largest operational stock of industrial robots in the Muslim
world.
EXTERNAL TRADE
40
Malaysia is an important trading partner for the United States. In 1999, two-way
bilateral trade between the U.S. and Malaysia totaled U.S. $30.5 billion, with
U.S. exports to Malaysia totaling U.S. $9.1 billion and U.S. imports from Malaysia
increasing to U.S. $21.4 billion. Malaysia was the United States' 10th-largest
trading partner and its 12th-largest export market. During the first half of 2000,
U.S. exports totaled U.S. $5 billion, while U.S. imports from Malaysia reached
U.S. $11.6 billion.
The Malaysian Government encourages Foreign Direct Investment (FDI).

According to Malaysian statistics, in 1999, the U.S. ranked first among all
countries in approved FDI in Malaysia's manufacturing sector with approved new
manufacturing investments totaling RM5.2 billion (US$1.37 billion). Principal
U.S. investment approved by the Malaysian Investment Development
Authority (MIDA) was concentrated in the chemicals, electronics, and electrical
sectors. The cumulative value of U.S. private investment in Malaysia exceeded
$10 billion, 60% of which is in the oil and gas and petrochemical sectors with
the rest in manufacturing, especially semiconductors and other electronic
products.
FREE TRADE EFFORTS

Malaysia is the founding member of the ASEAN Free Trade Area which was
established in 1992 to promote trade among ASEAN members. Most tariffs
among the first generation member states were scrapped in 2007. ASEAN itself
is increasingly playing a large role in free trade negotiation on behalf of its
members. ASEAN as a group hopes to establish a free trade agreement with
the European Union by 2009.
41
The Malaysian Government is negotiating free trade deals

with Australia, Chile and India, but has suspended negotiation of free trade deal
with United States indefinitely after eight rounds of negotiation. Officials have
expressed desire for free trade agreements their ASEAN
members Singapore and Thailand. The Malaysian Trade Ministry released a
statement in Vietnam saying that the FTA "has the potential to increase trade,
investment cross flows and economic cooperation between the two countries.
The agreement would also serve to make Chile a gateway for Malaysia's exports
to the Latin American market."
Malaysia signed a Japan-Malaysia Economic Partnership

Agreement with Japan on 13 December 2005. This leads to a Free trade
agreement which was in effect from 13 July 2006 and expected to be fully
realized in 2016. The agreement itself is an extension of an FTA between ASEAN
and Japan, which is called Asean-Japan Comprehensive Economic Partnership.
On 8 November 2007, Malaysian and Pakistan signed a bilateral Free Trade

Agreement which will come in force on 1 January 2008. Malaysia will cut tariffs
on 140 lines while Pakistan will cut 124 lines. Most tariffs and duty is expected
to be eliminated by 2012.
Other 'economic areas' showing an interest in establishing free-trade
agreements with Malaysia are the European Union and Hong Kong. However,
before any talks can be initiated regarding new FTAs, Joint Economic Co-
operation deals need to be concluded. International Trade and Industry
Minister, Tan Sri Muhyiddin Yassin has expressed the hope that talks will be
concluded by the end of 2008.
MAJOR IMPORTS AND EXPORTS
Southeast Asia, particularly Malaysia, has been a trade hub for centuries. Since
the beginning of history, Malacca has served as a fundamental regional
commercial center for Chinese, Indian, Arab and Malay merchants for trade of
precious goods. Today, Malaysia shares healthy trade relations with a number of
countries, specifically the US. The country is associated with trade
organizations, such as APEC, ASEAN and WTO. The ASEAN Free Trade Area that
was established for trade promotion among ASEAN members also has Malaysia
42
as its founding member. Malaysia has also signed Free Trade Agreements with
countries including Japan, Pakistan, China and New Zealand.
Malaysia was once the world’s largest producer of tin, rubber and palm oil. Its
manufacturing sector has a crucial role in its economic growth. The export
industry was hit hard during the late 2000 economic recession drastically
dropping to 78% i.e. FDI to RM4.2 billion in the first two quarters of 2009. Total
exports fell down to $156.4 billion in 2009 from $198.7 billion in 2008. The
imports also reduced from 154.7 billion in 2008 to $119.5 billion 2009.
EXPORT COMMODITIES
• Electronic equipment
• Petroleum and liquefied natural gas
• Wood and wood products
• Palm oil
• Rubber
• Textiles
• Chemicals
EXPORT PARTNERS
43
IMPORT COMMODITIES
• Electronics
• Machinery
• Petroleum products
• Plastics
• Vehicles
• Iron and steel products
• Chemicals
IMPORT PARTNERS
TRADE RELATIONSHIP WITH U.S.

Malaysia Leads as High-Tech Products Exporter of Computers, computer
accessories and telecommunications equipment account for 52% of Malaysian
exports while semiconductors which generate 47% of sales to America.
Malaysia’s Gross Domestic Product (GDP) was an estimated US$222.2 billion in

2008, making Malaysia the world’s 39th richest country.
With a population of 25.7 million Malaysians who enjoyed an average GDP of

$15,200 per person last year, Malaysia placed 74th among other nations in
terms of GDP per capita.
As the world’s 21st biggest exporting nation, Malaysia shipped $198.9 billion
worth of exports in 2008. Malaysian exports include electronic equipment,
petroleum, liquefied natural gas, wood, rubber and textiles. Based on 2008
statistics, Malaysia’s largest export clients were Singapore (15.6%), the United
States (12.9%), China (12.5%), Japan (9.6%) and Thailand (4.1%).
44
According to the CIA World Factbook, Malaysia imported $154.7 billion worth of
foreign goods last year. Major commodities imported into Malaysia include
machinery, petroleum products, plastics, vehicles, iron and steel products and
chemicals. Leading suppliers to Malaysia were Singapore (23%), China (12.7%),
Japan (9.8%), the United States (7.8%), Thailand (5.7%) and South Korea
(4.3%).
In total, Malaysia’s international trade amounted to $353.6 billion or 159.1% in

relation to its overall GDP. This compares with roughly 25% for the U.S. and 60%
for Canada.
TRADE WITH THE U.S.

Last year, Malaysian exports to America fell 5.8% to $30.7 billion. Over that
same period, Malaysia bought $12.9 billion worth of U.S. imports – an increase
of 10.9%.
After subtracting imports from exports, one can quickly calculate Malaysia’s
trade surplus with the U.S. to equal a healthy $17.8 billion in 2008.
The lists below present the top 10 exports and imports that American and
Malaysian enterprises exchanged in 2008. The fastest-growing trade product
categories are also listed.
TOP EXPORTS TO AMERICA

Malaysia’s top 3 exports were hi-tech products that represented 51.8% of
Malaysian exports to the U.S. last year. In total, the following 10 Malaysian
exports generated 77.1% of the total value of shipments from Malaysia to
America in 2008.
1. Computers … US$6.7 billion, down 17.2% from 2007 (21.9% of US imports

from Malaysia)
2. Computer accessories and parts … $4.8 billion, down 14.4% (15.6%)
3. Telecommunications equipment … $4.4 billion, down 1.2% (14.3%)
4. Semiconductors … $2.9 billion, up 2% (9.6%)
5. Food oils and oilseeds … $1.2 billion, up 76.7% (3.9%)
6. Other household goods including clocks … $964.8 million, down 21.8%
(3.1%)
7. Other scientific, medical and hospital equipment … $899.5 million, up
19.4% (2.9%)
8. Household items including baskets and furniture … $710.5 million, down
8.2% (2.3%)
9. Stereo equipment including radios … $566.1 million, down 6.3% (1.8%)
10. Video equipment (DVD players, VCRs, TV receivers) … $516.6
million, up 12.3% (1.7%).
45
FASTEST-GROWING MALAYSIAN EXPORTS TO THE

U.S.
Malaysian exported tin had the most dramatic increase in sales to the U.S.,
while 7 other product categories showed impressive triple-digit gains.
1. Tin … US$34.9 million, up 1,881% from 2007

2. Oilfield and drilling equipment … $14.1 million, up 990.4%
3. Feedstuff and food grains … $21.2 million, up 183.3%
4. Crude oil… $63.2 million, up 169.8%
5. Synthetics (cork, gums, resins, rubber, wood)… $6.8 million, up 162.4%
6. Vegetables and preparations … $6.4 million, up 153.4%
7. Paper and paper products … $9.7 million, up 137%
8. Miscellaneous non-ferrous metals … $12.6 million, up 121.6%
9. Agricultural machinery and equipment … $2.7 million, up 91.4%
10. Fertilizers and pesticides … $43.2 million, up 87.1%.
TOP IMPORTS FROM AMERICA

Semiconductors, steelmaking and plastic materials illustrate the fact that many
of America’s exports to Malaysia are source inputs for Malaysian manufacturers.
The following top 10 exports from America to Malaysia accounted for 74.6% of
Malaysia overall imports from the U.S.
1. Semiconductors … US$6.1 billion, up 21.7% from 2007 (47.3% of US

exports to Malaysia)
2. Computer accessories … $586.7 million, up 7.4% (4.5%)
3. Steelmaking materials … $525.6 million, up 45.4% (4.1%)
4. Other industrial machines … $421.8 million, down 20.3% (3.3%)
5. Electric apparatus … $421 million, down 8.5% (3.3%)
6. Telecommunications equipment… $416.7 million, down 13.2% (3.2%)
7. Measuring, testing and control instruments … $369.8 million, up 29.9%
(2.9%)
8. Civilian aircraft… $346.8 million, down 31.6% (2.7%)
9. Generators and accessories … $245.5 million, up 98.6% (1.9%)
10. Plastic materials … $163.5 million, up 5.7% (1.3%).
FASTEST-GROWING MALAYSIAN IMPORTS FROM THE

U.S.
The top 10 list of Malaysian growth imports were for relatively small dollar
amounts. Three of these import categories were up by triple-digits while the
remaining 7 product categories had double-digit gains.
1. Artillery, guns, missiles and tanks … US$28.6 million, up 653.1% from

2007
46
2. Food oils and oilseeds … $8.4 million, up 553.9%

3. Other iron and steel products … $27.3 million, up 111.7%
4. Generators and accessories … $245.5 million, up 98.6%
5. Chemical fertilizers… $22 million, up 97.3%
6. Marine engines and parts … $34.1 million, up 84.7%
7. Trucks, buses and special purpose vehicles … $2.3 million, up 79.3%
8. Textile and sewing machines … $6.3 million, up 69.2%
9. Unmanufactured agriculture industry products … $27.1 million, up 67.4%
10. Unmanufactured tobacco … $20.9 million, up 66%.
COMPARATIVE TRADE ADVANTAGES

During 2008, Malaysia exported $11.5 billion worth of computers and
accessories to the U.S. while importing $715 million of those same product
categories from America.
These Malaysian-American trade statistics show that Malaysia has a

comparative advantage over the U.S. in the trade of computers and accessories
between the 2 nations.
On the other hand, America exported $6.1 billion worth of cornputers to

Malaysia in 2008 compared with $2.9 billion in Malaysian semiconductors
imported into the U.S.
That the U.S. shipped to Malaysia over twice the value of imported Malaysian
semiconductors clearly shows that America has a comparative advantage in
trading semiconductors with Malaysia.
CHALLENGES
According to Deputy Prime Minister of Malaysia, the country should
diversify trade pattern and explore China's sectors.
With reference to an excerpt from the article published in KUALA LUMPUR, May
22 (Bernama) –
Malaysia should diversify its trade pattern and explore emerging sectors in
China which have high potential for future growth, according to Deputy Prime
Minister Tan Sri Muhyiddin Yassin.
"Currently, most of our bilateral trade comprises electronics and electrical
products, palm oil and chemicals. Clearly, we can do much more to diversify the
pattern," he said.
Muhyiddin said with the move towards the Asean-China Free Trade Area,
Malaysia could and should significantly diversify and broaden opportunities for
trade and investment with China.
47
CONCLUSION
After a thorough analysis of the various impacts of free trade and discovering
examples of each of the economies under review and their relative success, we
have come to the conclusion that “Free Trade” is one of the best available
solutions to get ourselves out of the chaotic mess that we find ourselves in and
there is a lot we can learn from our Asian counterparts on how they have used
this weapon up their arsenal to establish themselves on the world stage.
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• Latest statistics from the US Census Bureau- Foreign Trade Statistics and
CIA World Factbook as of the date of article publication.
• http://www.bernama.com/bernama/v5/newsbusiness.php?id=500392
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4 Asian Tigers

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4 Asian Tigers

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Submitted To: Mr. Akhtar Lodhi

S.No. Contents Page #

2 Benefits of Free Trade 9

3 Terms-of-Trade Effect of Growth 11

Effect of Economic Growth on

5 Arguments against Free Trade 12

6 Impact of Free Trade on the World 13

7 Free Trade Agreements (FTAs) 19

Specific Advantages of promoting

Points to bear in mind in

12 Motivations for Free Trade 22

17 Statistics of Malaysian Economy 37

20 Free Trade Efforts 40

21 Major Imports and Exports 41

26 Trade Relations with U.S. 43

27 Trade with U.S. 43

28 Top Exports to U.S. 43

Fastest Growing Malaysian

30 Top Imports from U.S. 44

Fastest Growing Malaysian

32 Comparative Trade Advantages 45

This report is aimed to enhance the understandings of the various impacts of

Therefore, our research is aimed to promote ‘better understanding’ of the

The act of opening up economies is known as "free trade" or "trade

The act of opening up economies is known as "free trade" or "trade

governments give money or other forms of support to local or domestic

Free trade is a complex concept-it can at least be classified according to the

BENEFITS OF FREE TRADE

The Theory of Comparative Advantag

TERMS- OF- TRADE EFFECT OF GROWTH

EFFECT OF ECONOMIC GROWTH ON INTERNATIONAL

ARGUMENTS AGAINST FREE TRADE

Infant Industry Argument:

• Prices can fluctuate due to environmental factors

Protection against Dumping

IMPACT OF FREE TRADE ON THE WORLD

What needs to be done is to introduce a sense of fairness and morality to the

Capitalism is fine when democracy still exists as a rational government

IMPLEMENTATION OF FREE TRADE

In collusion with these misunderstandings is the idea that "nations" engage in

"corporations" engage in and promote free trade is connected to this same

Promotion of free trade is always an oxymoron. Free trade cannot be

In doesn't take a genius to realize that something is amiss when locally

FREE TRADE AGREEMENTS (FTAs)

Amid the advance of economic globalization, it is important to maintain and

SPECIFIC ADVANTAGES OF PROMOTING FTAs

Political and Diplomatic Advantages

POINTS TO BEAR IN MIND IN PROMOTING FTAs:

Impact on Domestic Industries

JAPAN (THE ASIAN POWER HOUSE)

Japan’s trade policy has historically centered on multilateral negotiations and

MOTIVATIONS FOR FREE TRADE

the most heavily supported commodities. Tariff-rate quotas are employed to

government employment plan called for Japan to promote foreign employment

The Share of Asian Economies in Japanese Trade

The Structure of Japanese Exports to Asia

The Structure of Japanese Imports from Asia

The Impact of Trade Liberalization among Japan, China and ASEAN

Malaysia is a growing and relatively open state-oriented market economy. The

The Southeast Asian nation experienced an economic boom and underwent

STATISTICS OF MALAYSIAN ECONOMY

GDP $381.1 Billion (2009)