Malaysia’s agricultural trade in the post-WTO era

This paper analyzed Malaysia’s trade in agricultural products for the 1985–2004 period. Comparative analysis between two periods, 1985–1995 and 1996–2004 was used in evaluating the effects of the trade liberalization initiatives of the World Trade Organization (WTO) and ASEAN on Malaysia’s agricultural trade. Results of the analysis showed no distinct differences in the pattern and composition of products traded between the two periods. The effect on the overall balance of agricultural trade was positive with the Balance of Trade (BOT) increasing by almost 2 folds between the periods. However, this increase in surplus was attributed to increase in the exports of vegetable oils in which the significant component was palm oil. Malaysia’s BOT in the other product categories was worse off. The paper concluded that more likely than not, the enhancement in the international trade of agricultural products for Malaysia resulted from a combination of “traditional” pull and supply-push economic factors such as rising incomes, changing tastes and preferences, increase in population as well as technological advancements rather than trade liberalization per se.