Nikkei Asian Review (11/10/2018) - KUALA LUMPUR -- Malaysia is counting on free trade agreements to avoid being subject to anti-circumvention probes, as U.S. and Chinese companies relocate production to the country to stay away from the impact of the ongoing trade war, a senior government official said.

In a recent written interview with the Nikkei Asian Review, Minister of International Trade and Industry Darell Leiking said that companies from the two countries will inevitably try to avoid the impact by producing in low-tariff and low-cost locales such as Malaysia, Thailand and Vietnam.

"This, however, could potentially result in Malaysia [being] targeted as a country circumventing tariffs against China or U.S. and subject to some costly anti-circumvention investigations," said Leiking, who was appointed to the post in July by Prime Minister Mahathir Mohamad.

Recent trade data suggests there has so far been only limited impact from the escalating trade tensions between the two major economies, but it is expected to increase. The administration of U.S. President Donald Trump imposed a third round of import duties on some $200 billion worth of Chinese goods, forcing Beijing to retaliate in kind.

In response, Malaysia will pursue FTA negotiations, because exporters have to stipulate the country of origin of their products. Malaysia has implemented 13 FTAs and is negotiating four more, including with the Regional Comprehensive Economic Partnership.

KUALA LUMPUR -- Malaysia is counting on free trade agreements to avoid being subject to anti-circumvention probes, as U.S. and Chinese companies relocate production to the country to stay away from the impact of the ongoing trade war, a senior government official said.

In a recent written interview with the Nikkei Asian Review, Minister of International Trade and Industry Darell Leiking said that companies from the two countries will inevitably try to avoid the impact by producing in low-tariff and low-cost locales such as Malaysia, Thailand and Vietnam.

"This, however, could potentially result in Malaysia [being] targeted as a country circumventing tariffs against China or U.S. and subject to some costly anti-circumvention investigations," said Leiking, who was appointed to the post in July by Prime Minister Mahathir Mohamad.

Recent trade data suggests there has so far been only limited impact from the escalating trade tensions between the two major economies, but it is expected to increase. The administration of U.S. President Donald Trump imposed a third round of import duties on some $200 billion worth of Chinese goods, forcing Beijing to retaliate in kind.

In response, Malaysia will pursue FTA negotiations, because exporters have to stipulate the country of origin of their products. Malaysia has implemented 13 FTAs and is negotiating four more, including with the Regional Comprehensive Economic Partnership.

Read more at https://asia.nikkei.com/Economy/Trade-War/Malaysia-fears-tariff-dodging-probes-amid-US-China-trade-war