Microsoft Word jsg report final doc

Partnership between ASEAN and Japan, as well as between ASEAN and 
China have been signed. 
(4) 
Along with these regional approaches, the bilateral approach for economic 
partnership is becoming important. While acknowledging the current depth 
of economic integration, further intensification is required to accelerate 
bilateral relationship in line with the move for greater economic integration 
in Asia. There is much room for further improvement of the bilateral 
relationship between Japan and Malaysia. The prospective bilateral 
economic partnership agreement (EPA) would be an effective instrument to 
strengthen the competitiveness of both countries. 
(5) 
A Japanese expert estimated the macroeconomic impact of bilateral EPA 
between Japan and Malaysia as follows: 
(a) 
Japanese real GDP would increase by 0.08 per cent (3,404 million 
US Dollar). In contrast, Malaysian real GDP would increase by 5.07 
per cent (5,379 million US Dollar). Macroeconomic gains in terms of 
rate of the increase are much more significant in Malaysia. As the 
volume of the real GDP of Japan is so large, the differences in those 
gains between the two countries may not be so large. 
(b) 
The changes in trade volume would be 0.29 per cent for export and 
0.60 per cent for import in Japan and 5.31 per cent for export and 
5.24 per cent for import in Malaysia. 
(6) 
Malaysian academicians pointed out that: 
(a) Estimates of the impact of trade liberalization calculated from the 
GTAP model must be considered with care because of limitations on 
assumptions, structural framework and data. These estimates of 
impact of EPA between Japan and Malaysia are only indication of 
possible effects of a closer economic partnership. 

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(b) The structure of Malaysian exports to Japan has not changed 
significantly. The bilateral EPA between Japan and Malaysia should 
provide an opportunity to accelerate the upgrading of Malaysian 
exports. 
(c) 
Even though Japan has a more liberal tariff regime, tariff levels are 
still high for agriculture products, textiles and clothing and leather, 
footwear and travel goods and the reduction of these tariff rates 
would help Malaysia to export higher value added goods. In addition, 
the prevalence of non-tariff measures adds costs to exporters. To 
overcome this, there is a need for higher technical assistance and 
capacity building efforts. 
(d) Malaysia still has persistent services account deficits and thus 
services sector liberalization should be handled carefully. 
(7)
In summary, academicians from Japan and Malaysia shared the view that 
both countries would gain economic benefits from trade liberalization 
between the two countries. They also acknowledged that to improve 
welfare, concrete and mutually beneficial cooperation and capacity building 
initiatives need to be given due attention.