General Seafood Trade Policy

Seafood is an area of focus in the national food policy. The government has placed emphasis on reducing the import bill of food products by increasing local food production.

The fisheries sector is expected to play an important role in reducing the country's food import bill by increasing fish production especially through aquaculture. The government has set a new target for aquaculture production at 600 000 MT by 2010 from the current production of around 200 000 MT. The government has allocated RM 160 million (US$ 43 million) for fisheries development in 2006 especially for the development of cage culture, hatchery, deepsea fishing and ornamental fish culture.

Malaysian External Trade and Development Authority ( MATRADE )

MATRADE has started promoting seafood products in the global market actively and has included seafood in its promotion calendar for the past one or two years. It has actively participated in the Brussels Seafood Show and Boston Seafood Show by offering government subsidy called Market Development Grant for participating companies. LKIM is also participating in the West Coast Seafood Exhibition and China Seafood Show this year in order to promote Malaysian seafood products.

The government has also decided to establish an Agriculture Attache in the Malaysian embassies in selected countries in an attempt to continuously promote the country's agriculture products including seafood products.

Trade Liberalization : As a trading nation, Malaysia is a strong supporter of trade liberalization including for fish and fishery products through multilateral, regional and bilateral trade arrangements. Seafood trade is considered to be liberal with minimum or zero import tariffs and non-tariff barriers (see WTO and bilateral trade section below).

Halal Product : As a Muslim country Malaysia which has a strong political background is likely to be a centre of halal food producer in the region and in the world. Halal certification system in Malaysia is well established and well recognized by buyers especially in the middle eastern countries

Free trade policy

Several agencies are involved in the exports/imports certification of fishery products. Even though, the European Union (EU) has acknowledged the Ministry of Health as a competent authority, there are other agencies also involved.
Ministry of Health Competent Authority for inspection of fish and fishery products exported/imported from/to Malaysia. Mostly involved in product quality certification and jointly HACCP certification of processing plants.
Fisheries Development Authority of Malaysia : Issuing export/import licence; physical and document inspection for fishery products exported/imported from/into Malaysia; exports/imports data collection.
Department of Fisheries Dealing mainly with the trade of live fish products, particularly for non-food live fish (for aquaculture and aquarium fish).In every entry/exit point, enforcement officers from MOH, LKIM, DOF and Customs conduct joint inspection/checking.

There are several sources of trade data for fishery products available in Malaysia.

MATRADE on-line database

Trade database by HS and SITC codes are available at the Business Information Centre, MATRADE. Nine (9) digit HS code for individual product (export/import from and into Malaysia) can be retrieved from the database both in terms of quantity and value. The data available up to date.In addition to that, global trade data from individual countries can also be accessed through a database called World Atlas at the business centre. Products are grouped by 9 or 10 digit HS codes.

LKIM Trade Data

LKIM also compiles export/import data of fishery products from and into Malaysia collected from its fish inspection centers. The database, only covers West (Peninsular) Malaysia, while Sabah and Sarawak (East Malaysia) is not covered yet by the system.  LKIM has a real time data on trade, landing and price information through its "lkanonline" information system

Only data on fish price is available (accessible) freely, while trade and landing data are restricted (accessible only by access code).

Department of Fisheries

Department of Fisheries publishes elaborate fish production and trade statistics annually.

Asean Free Trade Area (AFTA)

Under AFTA, ASEAN member countries, including Malaysia, have committed to reduce/eliminate tariffs on produce traded within the regional block and eliminate non-tariff barriers. Tariff reduction is undertaken through the Common Effective Preferential Tariff Scheme (CEPT) that include four categories of products namely: Inclusion List (Reduced tariff product list); Temporary Exclusion List; Sensitive and Highly Sensitive List; and General Exception List.

Most of processed agriculture and fishery products are included in the Inclusion List. Malaysia together with Brunei, Indonesia, the Philippines, Singapore and Thailand have reduced import tariffs of these products up to maximum 5% since 2003 and will be eliminated completely by 2010.

Malaysia has transferred 10 116 products into the Inclusion List since 1993 with most of the fishery products (fresh and frozen products) having zero (0%) import tariffs. Exporters/importers only have to pay a physical inspection cost of RM 0.05/kg of imported products to the government (LKIM). There is no restriction on quantity with minimum barriers to trade in importation of fishery products into Malaysia.

In addition to tariff reduction/elimination, some measures have been/are being established to reduce unnecessary technical barriers such as: harmonization of standards and conformance measures, simplification and harmonization of customs procedures and facilitating of the flow of goods across borders.

By value more than 30% of export of fishery products from Malaysia is destined to ASEAN member countries, while almost 90% of imports of fishery products (quantity) originates from ASEAN member countries. In this regard, Malaysia has significant interest in the liberalization of trade in fishery products within ASEAN.

 Bilateral Free Trade Agreement (FTA)

Currently, Malaysia is negotiating Free Trade Agreements (FTAs) with Japan, India, Pakistan, Australia and New Zealand.  So far, Malaysia has not signed any FTA, but the FTA with Japan is expected to be signed soon. Recently, Pakistan and Malaysia signed a MOU on an Early Harvest Programme that will be effective from January 2006.

Malaysia gives high priority for inclusion of manufacturing goods and palm oil in the FTA and less attention is given to fishery products as they have been liberalized (low or zero tariffs).

At the regional level, together with ASEAN, FTAs with the following countries are negotiated: China, Australia, New Zealand, India, Japan and South Korea.  ASEAN-China Free Trade Area (ACFTA) has come into effect on 1 July 2005, that also includes fish products. Under ACFTA, Malaysia also participates in an Early Harvest Programme (EHP) whereby elimination of tariffs on a list of agreed products will begin on 1 January 2006. Malaysia offers 590 products under the EHP.

List of Free Trade Agreements (FTAs)

Malaysia and WTO

The Ministry on International Trade and Industry ( MITI ) coordinates WTO matters. The government has established the National Committee on Multilateral Trade Negotiation (MTN) headed by the MITI to facilitate the internal consultative process and formulation of a national position on trade related issues in the WTO. To assist MITI, 11 working groups are formed namely working groups on: Agriculture; Services; Non-agriculture products; Trade and Environment; TRIPs; WRO Rules; Investment; Competition Policy; Government Procurement; Trade Facilitation and E-Commerce. The MOH and Ministry of Agriculture and Agrobased Industry (MOA) are the SPS focal points.

Malaysia's commitments for trade liberalization through reduction of tariffs and non-tariff barriers are generally greater than other developing countries. For example, the average bound tariff rate for Malaysia is 14.5% which is lower than Thailand (25.7%), the Philippines (25.6%), India (49.8%) or Mexico (34.9%). About 65% of the country's tariff lines (7 197 products) is covered under the binding commitments of MFN principle, consisting of 1 297 agriculture products and 5 900 of non-agricultural products. Tariffs on most of the fishery products are very low or duty free. Only tariffs for processed ready-to-eat products such as canned seafood and dried seafood are higher. However, the bulk of canned and dried seafood is imported from Asean countries which have lower tariffs under the Asean Free Trade Area (AFTA).

In trade negotiations, fishery products are considered to be less important due to the following reasons:

Trade in fishery products is already liberal (low or zero tariffs with minimum non-tariff barrier).

Malaysia imports more than what its exports in term of quantity to feed domestic market and for reprocessing industry.

The bulk of the fish trade (import) is within ASEAN countries which are subject to lower duty (if any).

At WTO level, SPS agreement has high relevance to the country's fisheries sector, especially in live fish trade and its monitoring programme. The Department of Fisheries is the focal point for the implementation of related SPS measures.

More info on Malaysia and WTO