Digital Free Trade Zone details expected next month
KUALA LUMPUR: Malaysia is expected to announce details of its planned Digital Free Trade Zone in April, as it seeks to boost the country’s burgeoning e-commerce sector.
The Digital Free Trade Zone, a brain child of Prime Minister Datuk Seri Najib Tun Razak and watched over by Alibaba founder Jack Ma, will among other things, knock down tariffs imposed on items being shipped into the country that are priced over RM500.
International Trade and Industry Minister II Datuk Seri Ong Ka Chuan said the challenge now would be to get other countries Malaysia commonly did e-commerce deals with to get onboard with its Digital Free Trade Zone.
“This is a free trade agreement, we want to liberalise e-commerce because at the moment we only have a very basic policy.
“For instance any item traded through e-commerce will be held at Customs if it is over RM500.
“We want to do away with tariff barriers but not only our country has to do this, we have to talk to all other countries so that Malaysian products can go there and their products can come into our country freely,” he said.
Najib, in November, appointed Ma as Malaysia’s digital economy adviser during an official visit to China, to formulate an attractive package for the Digital Free-Trade Zone to encourage more people to join the country’s e-commerce sector.
Ong said e-commerce currently contributes a measly 8.8% to the country’s annual gross domestic product (GDP). China’s Internet economy accounts for 20% of the People’s Republic’s GDP.
“There is big potential in this,” Ong said.
Separately, Ong announced that Malaysia was expected to finalise free trade talks with the European Union (EU) by the end of this year.
Talks which stalled in 2010, picked up late 2016 following the Brexit vote.
Ong said Malaysia was under pressure to wrap up negotiations with its second largest source of foreign direct investment, after neighbours Singapore and Vietnam beat the country to the punch with their own FTAs with the EU.
“We have to be really aggressive because we have to compete with Vietnam and Singapore who have already concluded their talks.
“We need to be active in concluding this,” he said.
Trade between Malaysia and the EU stood at RM166.8bil (35.4 billion euros) in 2016.