The Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM) views positively Malaysia’s impending ratification of the CPTPP, citing the partnership will offer immense opportunities for Malaysia to expand goods and services as well as secure new investment.
ACCCIM states in conjunction with the Government’s timeline to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the third quarter of 2022, Ministry of International Trade and Industry (MITI) has released the Cost and Benefit Analysis (CBA) report by PwC.
The report has concluded that the benefits outweigh costs for the local business environment while the Government will amend the necessary legislation and regulations.
In a recent statement, ACCCIM said amidst considerable uncertainties in the global economy post the COVID-19 pandemic and the inward-looking tendencies, the CPTPP coupled with the implementation of RCEP can reinforce Malaysia’s expansion and diversification of trade, strengthening economic recovery post the COVID 19 pandemic.
It believes Malaysia’s commitment in adopting the high standards of CPTPP will increase Malaysia’s attractiveness as an investment destination for companies looking to diversify their supply chains, opening up market access for goods and services as well as digital products.
In addition, the Malaysian Government has secured specific carve-outs and side letters that will allow Malaysia to sufficiently retain its policy freedom in some areas of concerned such as Government procurement and state-owned enterprises.
For the Intellectual Property Rights, the CPTPP allows the parties to adopt necessary measures to protect public health to alleviate concern over high cost of medicine.
CPTPP is a multilateral free trade agreement comprising 11 countries spreading across Asia and American Continent which provides a market over 500 million people; a combined nominal GDP of US$11.7 trillion (12.2% of global GDP) and total trade of US$6.6 trillion (14.7% of world trade).
ACCCIM President, Tan Sri Dato’ Low Kian Chuan said: “The chamber has been a strong advocate of an open, effective, inclusive and rule-based trading system to boost global trade.”
The Chamber cited that with the four features of CPTPP; which are Competitiveness, Access to new markets, Market transparency and stability, and Reduce barrier to trade will allow Malaysian businesses to compete and access to key markets in Canada, Peru and Mexico in addition to seven of the eleven CPTPP members are intersection economies also belonging to the RCEP.
The 10 CPTPP partners accounted for 29.0% of Malaysia’s total exports and 22.9% of total imports in 2021. They accounted for 31.2% of Malaysia’s electronics and electrical products exports. Malaysia would also gain access to new markets such as Canada, Mexico and Peru (1.5% of total exports and 1.1% of total external trade in 2021), of whom Malaysia does not have an FTA with these three countries.
For instance, tariffs for electronics and electrical products will be reduced from the current maximum of 9%-20% based on the tariff elimination schedule for respective countries namely, Canada, Peru and Mexico. Through the CPTPP, these tariffs will be eliminated by 2028.
In this regard, ACCCIM urges businesses, especially SMEs and domestic service providers to continue strengthen their competitiveness and improve product quality as well as marketing strategies. This is to enhance SMEs supply chain resilience, advancing their integration in global supply chains and facilitating e-commerce.
Tan Sri Dato’ Low said that the chamber is committed to working collectively with Ministry of International Trade and Industry (MITI) as well as with the private sector to provide for an enabling trade and investment environment for green products, biomedical, biomass, technology and knowledge-based manufacturing and services.
