The Regional Comprehensive Economic Partnership (RCEP) Agreement came into force on January 1 and for Malaysia, this Agreement came into force on March 18.
As Malaysia only enforced the Agreement last March, it is currently too early to assess the impact of RCEP on the country’s trade.
However, according to a study released by the United Nations Conference on Trade and Development or UNCTAD with permission, which was published on December 15, 2021 titled A New Center of Gravity: The Regional Comprehensive Economic Partnership and Its Trade Effects, Malaysia is expected to receive the greatest benefit among Asean countries this Agreement in terms of exports, with a projected increase in export value of US$200 million or RM837.2 million, through the elimination and reduction of tariffs for trade goods and the improvement of export and import facilities among RCEP countries.
In order to enable exporters or importers to obtain benefits in the form of exemptions or reductions in import duties from a free trade agreement or with permission, free trade agreement (FTA), they need to have a Preferential Certificate of Import or with permission, Preferential Certificate of Origin (PCO). PCO is an international trade document that aims to prove that the exported or imported goods meet the conditions specified in the rules of origin or with permission, rules of origin (ROO) of an FTA. This includes as confirmation on behalf of the Customs country of the importing country to grant tariff concessions under the relevant FTA.
According to data obtained from the beginning of the enforcement of the RCEP Agreement in March until 30 June 2022, a total of 73 certificates of exportation have been issued with an export value of RM31.9 million for the export of goods under the RCEP Agreement. For the month of June, the highest export value was recorded at RM21.5 million.
Looking at Malaysia’s foreign trade performance until the middle of this year, the country continues to maintain an encouraging performance. In April, national trade recorded RM231.44 billion with exports amounting to RM127.49 billion. Trade performance continued to increase where in May, national trade recorded RM228.37 billion, while exports recorded RM120.49 billion.
While in June, the country recorded the highest value for trade, export, and import this year, where trade increased 43.4% to RM270.39 billion compared to the same period last year.
