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This paper explores the impact of non-tariff measures (NTMs) on Malaysian exports to the major traditional markets of the European Union (EU), Japan and the Association of Southeast Asian Nations (ASEAN), spanning the period 2000-2013. The empirical findings reveal the presence of a dual effect of NTMs on Malaysian exports; The NTMs can facilitate trade or restrict it. From the Malaysian experience in the trade of broad categories of products, NTMs appear to have a beneficial impact on industrial exports but not on agricultural exports. Similarly, positive effects of NTMs are noted in Malaysia’s trade with ASEAN and Japan but not with the EU. A possible reason why NTMs act as a catalyst for trade is that its high export concentration in both products and markets results in an “offensive” approach that ensures sustained market access in major importing countries. The findings of the paper are therefore relevant to the current national policy debate on market access in traditional markets and for policy considerations in negotiating comprehensive bilateral free trade agreements (FTAs), specifically the ongoing Malaysia-EU FTA.
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