M'SIA'S TRADE SURPLUS WITH US DECLINING DUE TO RISING IMPORTS - MATRADE

By Manik Mehta

NEW YORK, June 22 (Bernama) -- Malaysia’s trade surplus with the United
States 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 US-Malaysia bilateral trade totalled US$40 billion last year, with
Malaysia’s exports amounting to US$26 billion, while imports worth
US$14 billion, resulting US$12 billion in trade surplus.

Malaysia’s exports rose by 11.3 per cent but imports posted a strong growth
of 34 per cent, says 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 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 United States,
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 usually curbs 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 the initiatives taken by Prime Minister 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 has also emerged as a major supplier of solar panels which are
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 MIHAS, an international halal
products exhibition, in Kuala Lumpur, he added.

Meanwhile, Wan Latiff, who has served three-and-a-half-years as the
Malaysian trade commissioner in New York, is on transfer to the Matrade
headquarters in Kuala Lumpur in mid-July.

He will be succeeded by Mustafa Abdul Aziz from Matrade headquarters.
Mustafa had served at Matrade offices in Paris, Dubai and Tokyo.

-- BERNAMA