Gaining market access and sources for raw material and labour are perhaps some of the benefits of the agreement, says economist
by FARA AISYAH / pic by BERNAMA
THE small and medium enterprises (SMEs) are expected to benefit from the larger market following the signing of Regional Comprehensive Economic Partnership (RCEP) agreement.
SME Association of Malaysia president Datuk Michael Kang said the agreement between 15 countries could give positive impacts to the SMEs which are currently struggling due to the Covid-19 pandemic.
“The market for Malaysian SMEs will now grow from 32 million populations to 2.6 billion populations.
“Local SMEs now have to be progressive and competitive by adapting to the technology,” he told The Malaysian Reserve yesterday.
He said the RCEP signing will definitely benefit Malaysian economy as one of the participating countries.
The association also lauded the government’s decision to participate in the RCEP agreement.
Bank Islam Malaysia Bhd chief Abdul Rashid said RCEP is a positive catalyst to the economy.
“Gaining market access and sources for raw material and labour are perhaps some of the benefits of RCEP.
“RCEP should be GDP accretive in the medium and long terms,” he said.
The Federation of Malaysian Manufacturers (FMM) believes that RCEP will contribute greatly to the country’s post-pandemic recovery by creating resilient supply chains.
“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 SMEs in developing more innovative and competitive products to enable greater inclusion in global and regional supply chains,” FMM president Tan Sri Soh Thian Lai said in a statement yesterday.
He added that 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.
International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali (picture) signed the RCEP agreement on behalf of the Malaysian government on Sunday.
He said the RCEP can be an economic recovery tool against Covid-19 which will help ensure opening of markets and uninterrupted supply chain.
“Service providers, including (those engaged in) e-commerce, will be able to enjoy greater market access in terms of cross-border supply and establish commercial presence in the RCEP markets,” he said.
RCEP will promote, facilitate and protect the investment climate of participating countries within the region.
“This also includes information exchange and promotion of transparency measures to facilitate business and investment within the RCEP area,” Azmin added.
Being the largest free trade agreement in the world, covering 15 countries with 2.2 billion or nearly a third (29.7%) of the world’s population, RCEP represents US$24.8 billion (RM102.18 billion) or almost a third (28.9%) of the world’s GDP based on World Bank’s 2018 data.