The Borneo Post (Sabah)

FMM: Expedite CPTPP, RCEP to assist recovery



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

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