UPM Institutional Repository

The impact of various trade arrangements on Malaysia's bilateral trade costs


Tan, Jiunn Woei and Lee, Chin and Mohamed, Azali and Ismail, Normaz Wana (2018) The impact of various trade arrangements on Malaysia's bilateral trade costs. Jurnal Ekonomi Malaysia, 52 (2). pp. 69-79. ISSN 0126-1962


The benefits of trade agreements on trade activities are notably acknowledged but the impact on bilateral trade costs remains obscure and have to be further examined. First, this study will construct the micro measure of bilateral trade cost, and then the constructed trade costs will be utilized to estimate the impact of trade arrangements on trade costs for Malaysia and her trading partners for the year 2002-2012. The results show that all four types of trade arrangements, namely the Multilateral Trade Arrangement (MTA), Regional Trade Arrangement (RTA), Bilateral Free trade Arrangement (BFTA) and bilateral trade Arrangement (BTA) have lowered trade costs. In addition, the different types of trade arrangements result in a variation of trade costs, where regional trade arrangements are expected to reduce bilateral trade costs the most. However empirical result shows otherwise where BFTA gave the highest reduction in trade costs for Malaysia. As to date, the number of BFTA that has been signed is far behind BTA. It is recommended that Malaysia realign its focus towards BFTA with the hope that Malaysia and her trading partners will experience a greater reduction of trade costs in the coming years.

Download File

Text (Abstract)
The impact of various trade arrangements on Malaysia's bilateral trade costs.pdf

Download (35kB) | Preview
Official URL or Download Paper: http://www.ukm.my/fep/jem/content/2018-2.html

Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Institute of Agricultural and Food Policy Studies
DOI Number: https://doi.org/10.17576/JEM-2018-5202-6
Publisher: Penerbit Universiti Kebangsaan Malaysia
Keywords: Trade costs; Trade arrangement
Depositing User: Nabilah Mustapa
Date Deposited: 12 Nov 2019 06:36
Last Modified: 12 Nov 2019 06:36
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.17576/JEM-2018-5202-6
URI: http://psasir.upm.edu.my/id/eprint/16043
Statistic Details: View Download Statistic

Actions (login required)

View Item View Item