International trade has been a significant character to most of the countries in recent years. Moreover, the international trade is developing rapidly by improving the techniques of production, transportation system and outsourcing of manufacturing and services.
If a country has a strong international trade, their economy may become booming. According to the Economic Complexity Index, the export of Malaysia is the 18th largest in the world. Malaysia exported $250 Billion and imported $167 Billion in the year 2016, this indicates a positive trade balance of $83 Billion.
The first advantage of international trade in Malaysia is it can change the consumption pattern of consumers. Without the international trade, Malaysia is a single and closed country. Therefore, Malaysia’s citizens only can consume the domestic products and services. In the event, the domestic products and services may not satisfied their needs due to the poor quality.
After the occurrence of international trade, Malaysia started to import the foreign products and also attract many foreign companies to invest. This gives the citizen more choice when consuming. They can purchase the foreign products but not only the domestic products. Besides that, Malaysia introduces the products that they are no expert at producing to their citizens while they export those products that they are expert at producing.
As a result, Malaysia earns more profits and foster the economic growth by exporting the unique products. Another advantage is the producers in Malaysia may improve the quality of products through international trade. The external competition which brings by the international trade has affected the Malaysia’s domestic market. Therefore, the government has imposed more taxes on importing to prevent the foreign products monopolize the domestic market. Although the price of foreign products is higher than the domestic products, many consumers still prefer to the foreign products such as Nike and Adidas because they have a better quality.
The producers notice about this so they started to import the advanced technology and high quality of raw materials in order to increase the competition. This helps them to improve the product’s quality as well as product’s efficiency. Based on the research, Malaysia imported about 400 million US dollars in the machine tools.
The government has implemented the zero-tariff policy on imported machines to foster importing. As a result, Malaysia has obtained the large economic of scale. The last advantage of international trade in Malaysia is mobility of resources will become greater. The resources may include labours, products and also capital.
The most important source of international trade in Malaysia’s higher education is student mobility. According to the study, Malaysia has about 25-30 thousand students go abroad to further studies in the recent years. Malaysia can take the advantages from the students as they will bring the new knowledges and skills when they return from foreign country. Malaysia can learn the technology from other countries to improve themselves and help in the economic growth. High skilled workers also one of the resources that Malaysia needs as they have a great power and they will bring advantages towards the economy of a country.