Research Proposal: Competition for Car manufacturers in Malaysia with respect to WTO Liberalization Policy



Table of Content

Introduction1

Background of the Study2

The Government's Policy on the Automotive Industry, Malaysia3

Spare the Rod of Competition, Spoil the Industry6

The Privatization Decision8

Lessons for and from Malaysia9

Research and Development10

Trade Policy: Theory and Practice12

The Policy of Liberalization: The Implementation of WTO commitments14

Problem Statement16

Thesis Statement17

Purpose of the Study17

Aims and Objectives18

Hypotheses18

Research Questions19

Significance of the Study19

Limitations20

Ethical Considerations22

Reliability and Validity23

Generalizability24

Rationale25

Outline25

Chapter no 1:25

Chapter no 2:25

Chapter no 3:26

Chapter no 4:26

Chapter no 5:26

References27

Research Proposal: Competition for Car manufacturers in Malaysia with respect to WTO Liberalization Policy

Introduction

Over the last couple of decades Asia Pacific Economic Cooperation (APEC) has been actively involved in liberalization of trade and investment in Asian Pacific region. Although, APEC has been voluntarily involved in market liberalization; however, international organizations like World Trade Organization (WTO) and Association of South-East Asian Nations (ASEAN) exert external pressure on domestic economies to facilitate trade liberalization. In this regard, different countries have devised various policies to liberalize as well as protect their domestic markets in different industries. However, automotive industry is one sector which has had the highest degree of attention in respect of liberalization. The rationale behind governments providing much higher attention to automotive industry in the wake of liberalization of market lies in the fact that it provides the most significant contribution to GNP, technological advancements, provision of employment, and in attracting the highest percentage of investment at national and international level (Artuc, 2009, pp 67-89).

During the review period, Malaysia has adopted measures specified in different planes, as the Ninth Malaysia Plan (2006 - 2010) and the third Industrial Master Plan (2006 - 2020), to guide the country towards global competitiveness and make an economy with higher value added and knowledge-based. Malaysia aims to increase the share of services sector in GDP to 60% by 2020, to establish a knowledge-based economy that relies less on exports of manufactured goods.

The manufacturing sector in Malaysia is relatively open to trade and foreign investment has the average tariff for manufactured goods were 8.7% in 2009 and a foreign equity of 100% is generally allowed. However, one notable exception is the automobile sector, which has long been protected from foreign competition through tariffs and nontariff measures. Although the sector has managed to capture a large share of the domestic market, exports are modest, indicating a lack of competitiveness outside. Nevertheless, it appears that the sector continues to be protected; particularly, in response to an economic downturn following the global crisis, discounts are given to buyers who replace their vehicles over ten years by vehicles national brands.

The service sector represents the largest share of GDP. Unlike the manufacturing sector (with the notable exception of cars), services are relatively closed to international competition, restrictions on FDI constituting major obstacles (Rodrik, 2010, 1457-1494).

Background of the Study

Malaysia Automotive industry is a rapidly developing industry, which covers the action from the automobile industry to the automotive business dealing with foreign countries. The Malaysian Automotive industry has been one of the main exporters and ...