FMM: Expedite CPTPP, RCEP to assist recovery

KUALA

LUMPUR: The Federation of Malaysian Manufacturers (FMM) has called on the government to expedite the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Partnership Agreement (RCEP) to assist business recovery.

Its president, Tan Sri Soh Thian Lai, said the government needed to hasten the ratification process for RCEP to be implemented by this year to benefit businesses in this time of need in a bid to stabilise manufacturing activities and rebuild supply chain connectivity in the region.

Nevertheless, it commended the Ministry of International Trade and Industry on its commitment to complete domestic procedures for the ratification of RCEP by the first quarter of 2022.

“While we are aware that there is no deadline for Malaysia to complete the domestic process to enable the ratification of the CPTPP, FMM believes the ratification at the earliest date possible will greatly contribute to Malaysia’s post-pandemic recovery,” he said in a statement today.

FMM firmly believes that these regional trade agreements will greatly contribute to the manufacturers’ post-pandemic recovery and in creating resilient supply chains.

Once both agreements are ratified, manufacturers can expect to benefit from diversification of import sources of industrial inputs and components.

“The CPTPP eliminates tariffs on nearly 96 per cent of products entering the intra-regional trade and the RCEP will likely cover 90 per cent of these products,” Soh said.

He said, due to the Covid-19 pandemic, the manufacturing sector has been hit hard with a myriad of issues caused by disruptions in the supply chain which has severely impacted production and trade activities.

As such, he said the postpandemic trade recovery for local companies is going to be more about re-establishing critical supply chains and establishing new global value chains to boost economic growth.

“The further integration of regional economies under RCEP and CPTPP, in addition to providing Malaysian exporters with preferential access into growing markets across the Asia Pacific, allows for increase in imports of raw materials and natural-resource-based materials from Latin America and Canada,” he said.

Additionally, it will provide strategic near-shore options which would reduce costs and time for companies by allowing to import and export products anywhere within the East Asia region without meeting the separate requirements for each country.

Soh added that FMM welcomed the signing of both the CPTPP in 2018 and RCEP in 2020, while thanking the government for placing importance for Malaysia to participate in the regional trade agreements to open up new market opportunities for local manufacturers. — Bernama

The CPTPP eliminates tariffs on nearly 96 per cent of products entering the intra-regional trade and the RCEP will likely cover 90 per cent of these products.

Tan Sri Soh Thian Lai