LIBERALISATION IN SERVICES SECTOR. Outline. Overview of Malaysia’s Services Industry Modes of Supply Liberalisation of the Services Sector Malaysia’s Position in AFAS, WTO, FTAs Issues pertaining to Services. Overview of Malaysia’s Services Industry.
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Overview of Malaysia’s Services Industry
Modes of Supply
Liberalisation of the Services Sector
Malaysia’s Position in AFAS, WTO, FTAs
Issues pertaining to Services
The Services Sector has been targeted as the new engine of growth under IMP3.
Total share of services in Malaysia’s GDP has grown by 9.7 per cent to 53.6 per cent in 2007 (Non-Government 46.7%) from 52.0 per cent in 2006 (Non-Government 45.3 %).
IMP3 targets an increase in the GDP contribution from 50.5 per cent in 2005 to 59.7 per cent by 2020 to be achieved through:
an annual average investment of RM45.8 billion; and
an annual average growth of 7.5 per cent during the period.
*Based on DOS and covered 3 categories: travel, transport and others.
In the Trade in Goods, liberalisation is undertaken through:
reduction in tariffs; and
disbandment of Non-Tariff Barriers (NTBs).
In the services sector, liberalisation is undertaken through four modes of supply:
Liberalisation in the services sector is currently being undertaken in:
ASEAN: through the ASEAN Framework Agreement on Services – AFAS (full liberalisation to be undertaken by 2015 and logistics 2013);
WTO: through progressive liberalisation (General Agreement on Trade in Services -GATS);
bilateral and regional FTAs: through progressive liberalisation and binding of commitments in GATS.
Strengthen domestic regulations
For non-regulated sectors, self-regulation is advised or if required, to advise the Government on regulatory requirements
Review regulations that impede services exports
Identify issues that impede the growth and development of services sub-sectors. Issues can be addressed in the MSDC for long-term competitiveness
Propose incentives that can assist the industry to become more competitive. Incentives are currently available through MATRADE and SMIDEC
Undertake mergers and acquisitions to strengthen the industry
Pursue MRAs with trading countries, in particular within ASEAN and FTA partner countries
Build local capacity and identify niche markets in areas where we have comparative advantage
Explore market access opportunities abroad through partnerships
- to enhance and strengthen cooperationamong service suppliers in ASEAN;
- progressively liberalise trade in services among ASEAN countries through reduction/elimination of restrictions.
- First Round (1996-1998):
1st Package – 1997; 2nd Package – 1998.
- Second Round (1999-2001): 3rd Package.
- Third Round (2002-2004): 4th Package.
- Fourth Round (2005-2007):
5th Package – 2006; 6th Package – 2007.
- Members to bind existing autonomous liberalisation
- foreign equity ownership of at least 51%
- progressive liberalisation of services sectors
- market opening in sectors where they
have export interest