CPTPP will give M’sia a regional competitive edge
KUALA LUMPUR: The recently signed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to give Malaysia a competitive edge in the region and build investor confidence.
The Federation of Malaysian Manufacturers (FMM) said the agreement promises a degree of transparency and predictability in investment rules, tariff concessions and avenue to address non-tariff barriers for local manufacturers.
“The CPTPP is expected to diversify Malaysian manufactured product exports. For example, over 80 per cent of Malaysian exports of automotive parts, particularly rubber components, are expected to enjoy duty free access immediately.
“This will help Malaysian parts and components manufacturers to export to global original equipment manufacturers (OEMs) located in CPTPP countries like Mexico and become part of the global supply chain,” the FMM told Bernama.
The federation said tariff concessions agreed to by each CPTPP country would boost exports for the electrical and electronics (E&E) industry
The CPTPP is expected to diversify Malaysian manufactured product exports. For example, over 80 per cent of Malaysian exports of automotive parts, particularly rubber components, are expected to enjoy duty free access immediately. FMM
which has been a key contributor to Malaysia’s export earnings.
It said export growth into other countries such as Canada and the Latin American countries, particularly Mexico.
“These countries currently impose high tariffs for electrical appliances, telecommunication devices and consumer electronics.
“Malaysia is the market leader for rubber gloves in Canada, and second in Peru and Mexico after China. Latex goods, especially rubber gloves, remain the largest contributor to Malaysia’s export of rubber products.
“Given the continuous increase in demand of nitrile gloves in Canada, Malaysia’s participation in the CPTPP will give our glove manufacturers a competitive advantage over nonCPTPP countries such as China in such exports,” it added.
The FMM said manufacturers are also expected to benefit from a diversification of import sources of industrial inputs and components.
“The CPTPP allows for an increase in sources of imports of better quality raw materials from Japan and Mexico.It also provides alternative sources of imports for heavy machinery and equipment,” it said.
In terms of enhancing competitiveness and trade, the FMM said the agreement is also expected to open up another 10 per cent of duty free trade with new non-free trade agreement (FTA) markets, namely Canada, Mexico and Peru.
“Competition is not new to businesses in Malaysia and the country has concluded seven bilateral FTAs (Japan, Pakistan, New Zealand, India, Chile, Australia and Turkey) and five regional FTAs through Asean (Asean with China, Korea, Japan, India and Australia-New Zealand).
“Given that a majority of our trade is already covered by these FTAs, we are confident that our manufacturers are wellplaced to withstand the further opening of domestic markets,” it added.
The CPTPP, signed on March 8, 2018, is a new version of the Trans-Pacific Partnership (TPP) multilateral trade pact.
It comprises 11 member nations, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.