Abstract :
Malaysian seafood exports to the EU faced blanket ban in 2008. The European Union is known to have the most stringent regulations with regard to food safety and standards. This has caused significant impact on the fisheries industry in Malaysia because the ED is the principal export market for the Malaysian seafood products and the fisheries sector is the second most important foreign exchange earner of the country. This industry employs about 10,000 workforce who are directly involved in the industry in addition to 50,000 others who are indirectly employed in the sector. As of January 2009, Malaysia lost about RMl.5 billion as a result of this ban. The objective of this paper is to evaluate the implications of the ED s restriction on Malaysian seafood industry. The findings show that the impact is significant especially in terms of border rejection rates, cost of compliance and upgrading the facilities, lost of employment and adjustment costs. Technical and financial assistance from the government are crucial for the industry in coping with the moving targets of safety requirements imposed by the EU. Other incentives such as tax exemption, soft-loan facilities, subsidised rate for electricity and energy, support in the form of trade promotion and enhancing trade with other Muslim countries especially the Gulf States are deemed important to assist the industry.
