Tan Sri Mohd Sidek Hassan

At Your Servicesurplus totalled RM6.7bil, as exports increased by 42.2% to RM71.8bil in 2008 fromRM50.5bil in 2005. Malaysian exporters are beginning to realise the importanceof FTAs and the benefits they bestow. But this has not assuaged critics who arguethat domestic industries and service providers face increased competition fromthe concessions accorded to countries under such agreements.There is no doubt, however, that properly-negotiated FTAs benefit participatingcountries over the longer term. In the short term, some companies may find thatthey have to work harder and become more efficient to stay competitive. Butthis is an acceptable challenge, given that concessions accorded under FTAs arenormally granted in stages over a period of time, sometimes as long as 10 years.This gives domestic producers ample time to adapt their production processesto meet the increased competition in the domestic market.The end result – low tariffs for bothexporters and importers – is a win-winoutcome for all parties. Exporters will haveimproved access to the markets of Malaysia’sFTA partners, and local producers will findthat their lower cost structure will makethem more competitive in the internationalmarket.FTAs also aim to create a conduciveenvironment for investments by providingprotection to investment and enhancingMalaysia’s standing as an attractiveinvestment destination.They also provide a platform to address technical regulations and standards suchas those applied on agricultural products for health and safety reasons. The need to146