Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : MEXICO CITY
Tarikh/Date : 18/09/91
Tajuk/Title : MEXICAN BUSINESSMEN
Let me say how happy I am to be in Mexico as a guest of
your Government. This visit has given me the opportunity to
meet with your political, business and industry leaders and
exchange views on matters of common interest. I wish to
thank the organiser for the initiative to hold this function
and to allow me to address this distinguished audience of
Mexican business and industry leaders who wish to expand and
develop bilateral trade and economic relationship between
our two countries.
2. As you know economic relations between our two coun-
tries have always been friendly and cordial. Over the
years, bilateral economic ties have shown encouraging im-
provement. Mexico is the third largest trading partner of
Malaysia in Latin America after Argentina and Brazil.
Malaysia's total trade with Mexico has expanded from US$9.40
million in 1985 to US$69.70 million in 1990. In this trade
expansion, I am delighted to note that trade has diversified
from primary commodities to include manufactured products
such as radio broadcast receivers, telecommunication equip-
ment and iron and steel products, a testimony to the wisdom
and practicality promoting South-South economic interaction.
3. Malaysia has an open economy in which international
trade has always played an important role. Malaysia main-
tains commercial contacts with all the countries of the
world and goods as well as currency have always been al-
lowed to flow freely across its borders. In all these it
has been consistent, eschewing radical switches.
4. In 1990, Malaysia with a population of about 18 million
exported US$29.4 billion worth of goods while total imports
amounted to US$29.3 billion. Malaysia's trade with Mexico
amounting to US$69.7 million represents about 0.12 percent
of total trade. Therefore there is much room for improve-
ment to the existing flow of trade between both countries.
5. Accordingly, I have brought with me a large trade de-
legation comprising the captains of trade and industry in
Malaysia to meet with their counterparts in Mexico to estab-
lish contacts and discuss serious business.
6. The opportunities for the expansion of two-way trade
and economic cooperation are immense as both our countries
share the same policies to promote economic development and
achieve rapid economic growth and in this process both coun-
tries have achieved commendable success.
7. The Malaysian economy grew at an average rate of 6.3
percent per annum in the last decade. Growth was even
faster in the past 3 years averaging about 9.0 percent per
annum.
8. In our economic development programme for this decade
the Malaysian economy is projected to grow by 7% per annum.
Exports is expected to increase from US$29.4 billion today
to US$94.7 billion by the end of the decade. Imports of
such items as machinery and transport equipment, minerals,
agricultural raw materials and intermediate products to meet
the needs of the industrial sector as well as food and con-
sumer goods for the country's growing population will grow
in tandem with increasing exports. Imports are projected to
grow from US$29.3 billion today to US$89.3 billion by the
year 2000.
9. There will therefore be a lot of opportunities for the
imports of Mexican products into Malaysia more so because of
a positive desire on the part of Malaysia to diversify its
sources and reduce its dependence on its traditional trading
partners.
10. At the same time, Mexico with its large population and
expanding economy is a country with potential for import of
a variety of Malaysian goods. The quality of our products
is high and generally meet international standards as well
as being competitively priced. However, the Pacific Ocean
is a big expanse of water and transportation cost will add
to the prices of Malaysian goods. The landed costs of
Malaysia's exports will obviously have to be competitive to
be able to break into the Mexican market. This is where we
need to look into making shipping less expensive through
special carriers, and regulated frequencies. Links too will
have to be established. Close sharing of revenue and opera-
tion will reduce initial loses. Malaysia Airlines is a me-
dium size operator which has been consistently profitable
and believes in cooperation rather than cut-throat competi-
tion.
11. Mexico is also an ideal location for siting re-
distribution centres for Malaysian products to the regional
market, including North and Central America. On the other
hand, Malaysia is also ideal as a re-distribution centre for
Mexican goods to East and Southeast Asia. Our traders must
study this cost-cutting approach very seriously.
12. The manufacturing sector in Malaysia has been identi-
fied to be the engine of growth. It is expected to contrib-
ute 37.2% to the GDP by the year 2000 as compared with 27%
today.
13. In the development of the manufacturing sector,
Malaysia maintains an open door and a liberal policy towards
foreign investment. Mexican investors are welcome to avail
themselves of the opportunities and incentives in the manu-
facturing sector.
14. Malaysia is situated in the heart of the dynamic Asso-
ciation of South East Asia Nations (ASEAN) and East Asian
region and it certainly is an ideal location for off-shore
manufacturing operations for distribution to the local and
regional market.
15. It is therefore important for Mexican businessmen to
visit Malaysia and look at the opportunities that we have.
Malaysia is a warm and hospitable country and we have always
welcomed foreigners. It would be useful if Mexico could
consider increasing her promotional efforts in the region
through participation in trade fairs and the dispatch of
trade missions, and the organisation of food, cultural and
trade promotional events in Malaysia such as a Mexican Week.
For whatever promotional work undertaken in Malaysia, you
can be rest assured that all the cooperation required will
be given by government and the private sector to ensure its
success.
16. Malaysian entrepreneurs have also developed competence
and expertise in certain sectors such as in plantation and
mining, certain sectors of the manufacturing industry par-
ticularly those involving rubber, palm oil and textile pro-
ducts. In the services sector, such as engineering
consultancy, construction and tourism, Malaysians will be
looking for opportunities in Mexico, preferably in cooper-
ation with local entrepreneurs.
17. Malaysia, as a trading nation, strongly supports a more
liberal international trading environment. In this regard,
our commitment is reflected in our efforts to liberalise
further our import regime consistent with international re-
quirements. Liberalisation inter-alia would take on the
form of tariff reduction and deregulation.
18. Malaysia participates actively in the Uruguay Round of
Trade Negotiations along with like minded countries such as
Mexico. I am happy to note that we share similar percep-
tions concerning international trade, namely that an open
and more liberal trading environment would be beneficial to
growth in trade and would certainly benefit countries like
us. Therefore, we share common concern to expedite the
Uruguay Round of Trade Negotiations to a successful com-
pletion.
19. I wish to congratulate Mexico for its positive contrib-
ution to trade liberalisation by restructuring its import
regime to be consistent with GATT when she joined GATT three
years ago. Such courageous and radical measures could only
take place when a government has a clear vision of the fu-
ture and confidence in the management of the economy. It is
an example which others should follow.
20. This would facilitate import and would certainly bene-
fit countries such as Malaysia which has the products and
the desire to expand trade with Mexico.
21. As trade and foreign investment contribute substan-
tially to economic growth, Malaysia attaches much importance
to strengthening linkages with her trading partners through
bilateral, regional and multilateral effort. One major ini-
tiative is regional economic cooperation through ASEAN which
was established in 1967. Over the years ASEAN has achieved
strong economic growth rates and has established strong eco-
nomic linkages with countries in the East Asian crescent.
22. In this regard we are confident that countries in this
region are ready to strengthen regional economic cooperation
further and should therefore support our proposal for the
East Asia Economic Group (EAEG). The EAEG will be a loose
consultative forum whose main task would be to defend free
trade during international trade conferences. It would be
GATT consistent. The EAEG can also help the member states
to develop through investments and trade and so contribute
to regional prosperity.
23. I believe Mexico shares the same sentiments. In
Mexico's external relationship she maintains strong links
with countries in the region such as the USA and Canada.
Therefore, I understand the merits of the proposal to estab-
lish the North American Free Trade Agreement to promote eco-
nomic cooperation in the North American continent. I hope
that the participating countries of NAFTA will ensure that
it is consistent with GATT and would be outward looking to
ensure that international trade will also benefit from the
Association. While there may be short-term gains from
closed trading arrangements, in the long run deprivation of
markets in the rest of the world will negate early gains.
24. In her effort to promote regional cooperation, I hope
therefore that Mexico would approach it with a wider per-
spective in view. New and dynamic markets are developing in
many parts of the world and they can absorb a lot of Mexican
exports to enrich Mexico.
25. With the visit of the Malaysian delegation to Mexico I
am certain that there will be better understanding of the
opportunities available in both countries which can contrib-
ute towards further economic interaction and the enhancement
of South-South cooperation through diversification of mar-
kets and sources.
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