Following the release of the Cost-Benefits Analysis (CBA) on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) by PricewaterhouseCoopers (PWC), the Small and Medium Enterprises Association of Malaysia (SAMENTA) again calls for Malaysia to ratify the CPTPP as soon as possible.
2. While Malaysia is among the initial signatories of the Agreement, we have not been able to benefit from the preferential tariff rates and treatment accorded by the Agreement until we ratify the same. As the CBA has indicated, our ratification of the CPTPP would conservatively increase our GDP by 1.9% as opposed to not ratifying the CPTPP. In the event that China and UK join the CPTPP, our GDP could gain 4.2% versus the baseline. These are strong numbers and we will be shooting ourselves in the foot if we do not join the trade pact when China and UK are eager to do so.
3. CPTPP is a high quality multilateral trade agreement and addresses long-standing trade issues such as non-tariff barriers (NTBs). SMEs in particular are more susceptible to NTBs, and our ability to compete fairly is impeded without a trade agreement that addresses such issues.
4. The various lockdowns as a result of the pandemic and the current severe labour shortage have resulted in severe disruption to our participation in the global supply chains. We will need all the support to reaffirm our position within these global supply chains. Our early ratification of the CPTPP will be a strong assurance to our trading partners that Malaysia is serious about business and is supportive of a fair, transparent trade regime.
5. While we are eager to see an early ratification of the Agreement, SAMENTA again calls upon the government to help our SMEs be prepared for the increased compliance especially in the areas of environmental and labour standards. SMEs understand that these, as part of the environmental, social and governance (ESG) drive, are fast becoming global standards. However, when compared to advanced economies such as Canada, our SMEs readiness are varied. Furthermore, the disparity in environmental and labour standards between the participating economies could create an unfair playing ground for participants, specially the SMEs.
6. As the oldest SME association in the country, SAMENTA looks forward to working with the government, including MITI and SME Corp to ensure our SMEs are ready and able to benefit from the CPTPP.
