Malaysia-Australia Business Council has welcomed the release of the Malaysian Government’s cost-benefit analysis of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The analysis makes clear that CPTPP’s new and expanded market access and associated economic opportunities will bring significant benefits to Malaysian businesses and the economy. This includes boosting GDP by 1.9 per cent in 2030 and bringing an additional investment of USD 112.3 billion to Malaysia over the period of 2021 to 2030. Accordingly, Australia urges the Malaysian Government to ratify the CPTPP as soon as possible.
CPTPP is a modern trade agreement that brings together 11 countries on both sides of the Pacific, including Malaysia and Australia. It is one of the most comprehensive trade deals ever concluded and includes an agreement to eliminate 98 per cent of tariffs for 11 countries with a combined GDP worth nearly MYR 50 trillion – 12.9 per cent of the global economy – and a combined population of over 500 million people.
Since early 2019, businesses from eight CPTPP members, including Australia, have enjoyed new or expanded access to key export markets. Regrettably, businesses in Malaysia have not been able to enjoy these benefits as yet. The COVID-19 pandemic hit the Malaysian economy hard, with the closure of many SMEs and increased unemployment. As it strongly recovers and rebuilds from the economic impacts of COVID-19, Malaysia needs to find new export markets and attract more investments.
Increased trade and investment would mean more opportunities for businesses, including SMEs, to create more and better-paid jobs for Malaysians. CPTPP gave Australia its first-ever trade agreements with Canada and Mexico and would do the same for Malaysia. The CPTPP would also give Malaysia its first trade agreement with Peru and – if accession discussions are completed – with the United Kingdom. Australian exporters have already benefited from five rounds of tariff cuts since the entry into force of the CPTPP on 30 December 2018. It is time for Malaysia to also share in these benefits. CPTPP is also about more than opening new markets. Australia and Malaysia already have other free trade agreements, but CPTPP will reduce barriers to two-way trade even further, providing new opportunities for businesses and greater choices for consumers in both countries.
Unlike any free trade agreement between just two countries, the CPTPP rules for which products qualify or better access will apply to goods made with inputs from other CPTPP members. For example, products made in Malaysia with Australian inputs will get better access to major markets like Japan than they do under current agreements.
CPTPP members are more attractive destinations for potential foreign investors and there is a risk Malaysia will miss out on investments if it does not ratify. Two of Malaysia’s regional competitors, Singapore and Vietnam are already benefiting from CPTPP membership, including through improved investment flows. CPTPP would not only benefit MABC members but also other Malaysian businesses and workers.