Trans-Pacific Partnership Agreement to benefit E&E sector’s trade

Malaysia has been pegged as among the top E&E manufacturer worldwide, with the E&E industry accounting for almost six per cent of the Malaysian economy.

The E&E manufacturers in the country have continued to moveup the value chain to produce higher value-added products which include intensification of research and development efforts and outsource non-core activities domestically.

According to Pricewatercoopers (PwC) in its report ‘Study on potential economic impact of TPPA on the malaysian economy and selected key economic sectors’ dated December 2015, Malaysia accounted for 2.8 per cent of the world’s E&E exports in 2014, positioning Malaysia as the 11th largest E&E exporter globally.

“Among the TPPA countries, Malaysia is the fifth largest E&E exporter, after the US, Singapore, Japan and Mexico. Vietnam is positioned closely behind Malaysia, with its global ranking improving from 34th position in 2010 to 12th position in 2014,” it noted.

The report also highlighted that TPPA countries account for about 40.9 per cent of Malaysia’s E&E exports in 2014, making the agreement essential to the development of the industry.

The Malaysian American Electronics Industry (MAEI), a subcommittee of the American Malaysian Chamber of Commerce (AMCHAM), had also pointed out that the TPPA is important for Malaysia’s E&E industry to elevate its competitiveness, increase export market share, and create a more vibrant ecosystem.

“Malaysia’s participation in TPPA are expected to increase E&E exports from US government procurement market and reduction or removal of tariff lines in seven TPPA member countries, namely Australia, Canada, Mexico, New Zealand, Peru, the US and Vietnam.

“TPPA will allow Malaysian E&E and other companies in the supply chain in Malaysia to enjoy lower tariffs and have better access to US government procurement.

“With TPPA, stronger trade secret protection will be strengthened and higher standards of labour practices will be implemented by companies in Malaysia, it will enhance Malaysia as a choice location for investment.

“Thus, it will attract high value high technology manufacturing and Design and Development (D&D) investments and expansion,” said Datuk Wong Siew Hai, chairman of MAEI, in a statement.