Malaysian Trade With OIC Countries Up 24.6% In 2021

MALAYSIA’S trade with the Organisation of Islamic Cooperation (OIC) countries has slightly recovered with double digits growth at 24.6% to US$20.81 billion (RM88.1 billion) from January to May 2021. It was US$16.66 billion in the same period last year.

Exports registered US$10.49 billion between January and May this year, a 26.1% increase from US$8.32 billion in the same period in 2020 while imports rose 23.6% to US$10.32 billion from US$8.34 billion.

“This is a good sign of recovery in tandem with the global recovery,” the Malaysia External Trade Development Corp exports promotion and market access division senior director Abu Bakar Koyakutty said at the e-press conference of the Malaysia Showcase Hybrid yesterday.

In terms of trade, Malaysia’s top five key markets in OIC are Indonesia, Saudi Arabia, United Arab Emirates, Turkey, and Bangladesh.

Malaysia is currently setting its sights to explore the halal corridors with Turkey to enhance bilateral market access.

The recent signing of the joint declaration on the expansion of the Malaysia-Turkey Free Trade Agreement (MTFTA) signals the commitment between the two nations to boost post-pandemic recovery and economic growth.

Apart from that, the participation of Malaysia’s Halal Showcase at the 8th OIC Halal Expo 2021 in Istanbul is also a step to build and foster a strong relationship among businesses from both countries.

Abu Bakar said Malaysia’s bilateral trade with Turkey has steadily improved in recent years with total trade expanding from US$2.11 billion in 2019 to US$2.30 billion last year.

From the period of January to May 2021, total trade climbed 79.4% to US$1.63 billion from US$440 million previously.

He said among the products with growing buying interest from the Turkish market are palm oil, oleochemicals (derivatives of palm oil), rubber gloves, cocoa-based products, and food ingredients.

The MTFTA was signed on Apr 17, 2014, in Ankara and came into effect on Aug 1, 2015.

Both Malaysia and Turkey have eliminated and bound duties on 70% of the tariff lines upon entry into force of the MTFTA.

Malaysian exports continued to gain preferential market access and remain competitive in the Turkish market.

The MTFTA will be realized over a period of eight years. After eight years, duties will be further reduced or eliminated on almost 86% of tariff lines.

“A total of 13,515 FTAs from Malaysian exporters were approved last year. I think exporters from both countries should fully leverage this because this is the way forward.

“I think they (Turkish companies) are currently reviewing some of the FTAs to make it more comprehensive to cover some of the sectors that have not been covered,” said Abu Bakar.

The Turkish Independent Industrialists and Businessmen’s Association deputy president Mustafa Ayedemir said it is a great opportunity for Malaysia and Turkey to form partnerships to look for a way out of the Covid-19 pandemic that has been affecting businesses worldwide.

“There are many small and medium businesses in Turkey that are looking for partners in Malaysia to gain some market share in ASEAN and are offering offices, network, and customer base to do business.

“I would like to encourage that partnerships can be established through platforms such as the OIC Halal Expo,” he added.

Trade Among OIC

Top Exporters/Importers in OIC Countries

Trade among OIC member countries has been a topic of interest among researchers, and policymakers in these countries. They need to adopt similar trade policies among themselves so that they can reduce their dependence on other countries.