‘RCEP agreement crucial in improving market access for Malaysian companies’
KUALA LUMPUR: The signing of the Regional Comprehensive Economic Partnership ( RCEP) has been viewed positively by the Federation of Malaysian Manufacturers ( FMM) as the agreement could further improve market access for Malaysian businesses.
At the 37th Asean Summit and Related Summits, the 10 Asean countries as well as South Korea, China, Japan, Australia, and New Zealand formed the world’s largest trading bloc via the signing of the RCEP agreement.
The trade pact covers more than 2.2 billion people and accounts for more than a quarter of the world’s gross domestic product ( GDP) at 29 per cent.
“FMM is a strong advocate of RCEP as we have always maintained that it will contribute significantly to Malaysian companies to improve market access, participate in new value chains, increase economic activities and strengthen supply chain links across Asia Pacific.
“Although Malaysia has implemented regional Free Trade Agreements ( FTAs) with China, Korea, Japan, Australia and New Zealand through Asean, RCEP will see the integration of the Asean+1 FTAs into a single and more cohesive trade and investment
architecture in the region. Therefore, we greatly welcome the signing of RCEP which is very timely and fully supported by Malaysian businesses.
“We expect under the RCEP,
the existing Asean+1 FTAs will be streamlined and greater market access commitments will be made while gaps in the existing agreements will be reduced to create a highly competitive economic area,” FMM president Tan Sri Dato Soh Thian Lai commented.
“For Malaysian companies, beyond the lowering of trade barriers, RCEP is expected to attract foreign companies keen on entering into an integrated Asean market as the agreement will enhance transparency in trade and investment.
“The trade pact will also facilitate advanced technical cooperation through digitalisation and smart manufacturing which will assist Malaysian Small and Medium Enterprises (SMEs) in developing more innovative and competitive products to enable greater inclusion in global and regional supply chains,” he added.
He noted that the Covid-19 pandemic continues to exact a huge toll on countries across the region. To mitigate the economic challenges posed by Covid-19, he pointed out that it is imperative to stabilise the manufacturing activities while sustaining and diversifying supply chain connectivity across the region.
“In this regard, FMM believes that RCEP will contribute greatly to the country’s postpandemic recovery by creating resilient supply chains,” he said.
“Moving forward, it is important for Malaysia and its Asean counterparts to ensure ratification by all the signatories by early 2021 so that RCEP is able to come into force at the earliest date to benefit businesses in this unprecedented time of need,” he concluded.