Malaysia’s trade surplus with US declines due to rising imports, says Matrade
NEW YORK: Malaysia’s trade surplus with the US is declining following rising imports from the world’s biggest economy, says the New York office of the Malaysia External Trade Development Corporation (Matrade).
It said the US-Malaysia bilateral trade totalled US$40 billion (RM121.18 billion) last year, with Malaysia’s exports amounting to US$26 billion (RM78.767 billion), while imports worth US$14 billion (RM42.413 b illion), resulting US$12 billion (RM36.36 billion) in trade surplus.
Malaysia’s exports rose by 11.3 per cent, but imports posted a strong growth of 34 per cent, said Matrade commissioner in New York, Wan Latiff Wan Musa.
He said Malaysia’s exports in the first quarter of this year posted a modest 1.2 per cent growth while imports grew by 22 per cent in the same period.
“However, we still maintain US$2.5 billion (RM7.576 billion) trade surplus in the first quarter of 2011,” said Wan Latiff in an interview with Bernama at his New York office.
Taking stock of the post-recession economic situation in the US, Wan Latiff said he had discerned signs of economic slowdown.
“What is particularly worrisome is the fact that unemployment has risen again to 9.1 per cent, according to the latest data available after having declined to 8.9 per cent in the past few months,” he said.
Rising unemployment, which would usually curb consumer spending, could also affect imports from Malaysia, he said.
“We are closely monitoring the situation …our major exports to the United States are still electrical and electronics products.
The employment situation, usually has an impact on demand for such products.
“Indeed, there is a debate on whether the economy will relapse into a recession though many believe there will be an economic slowdown, but what is encouraging for us is that exports of palm oil, chemicals, scientific equipment and rubber products are still strong.
“We’ve seen a drop only in electrical and electronics products, particularly computer-related components,” he said.
Wan Latiff was very happy with initiatives taken by Prime Minister Datuk Seri Najib Tun Razak to intensify political and economic ties with the US.
He said the initiatives had imbibed new momentum to bilateral economic and trading relations with the US.
“The US has been an important trading partner of Malaysia and Najib’s initiatives have helped revive two-way economic and trading ties.
“We are also looking at the high-value automotive sector; aerospace; biotechnology; and business outsourcing services such as the IT services in healthcare; banking; and insurance,” he said, adding that he was unperturbed by the competition from other countries, particularly China.
“Malaysia is perceived by US importers as a good and reliable supplier of goods and services.
However, there is pressure on prices and Malaysia has to be competitive to assert its position in the US market.
“This is a challenge for Malaysia to reinvent itself and project its attributes as a good and reliable supplier,” he said, alluding to the fact that Malaysia was also engaged in research and development initiatives offering innovative products and new technologies,” he said.
Malaysia had also emerged as a major supplier of solar panels, currently being manufactured in the country.
“This industry will grow and replace the labour-intensive industries,” he said.
Wan Latiff also said the New York office would send an American delegation to a trade and investment exhibition in Kuala Lumpur in November.
A buyers’ group was also sent in April to the Malaysia International Halal Showcase (Mihas), an international halal products exhibition in Kuala Lumpur, he added.
Meanwhile, Wan Latiff, who had served three-and-a-half-years as the Malaysian trade commissioner in New York, would be on transfer to the Matrade headquarters in Kuala Lumpur this mid-July.
He would be succeeded by Mustafa Abdul Aziz from Matrade headquarters.
To note, Mustafa had served at Matrade offices in Paris, Dubai and Tokyo. — Bernama