Hosted by MCCC, the hybrid event will flesh out key details of the world’s largest FTA covering 30% of world’s population and economy
by HABHAJAN SINGH
THE Regional Comprehensive Economic Partnership (RCEP) agreement will be a key topic at the 12th Malaysia-China Entrepreneurs Conference (MCEC) 2022 on next Thursday, Dec 15, a sure sign that Malaysian corporations and entrepreneurs are looking out for opportunities as they dust their plans post-Covid-19 pandemic.
Two ministers from the newly appointed federal government are expected to attend the one-day conference in Kuala Lumpur. Bank Negara Malaysia (BNM) former governor Tan Sri Muhammad Ibrahim will be delivering the keynote address.
Hosted by Malaysia-China Chamber of Commerce (MCCC), the hybrid event will flesh out the key details of RCEP, the world’s largest free trade agreement (FTA) covering 30% of the world’s population and economy.
“The agreement has not caught the attention of the business community as it should. It provides huge opportunities,” said seasoned banker and conference organising committee chairman Tan Kok Toon.
In March 2022, Malaysia became the 12th signatory country to implement the RCEP agreement, join ing Australia, Brunei, Cambodia, China, Japan, Laos, New Zealand, Singapore, South Korea, Thailand and Vietnam — all nations that have completed their respective ratification processes.
In a nutshell, RCEP streamlines and amalgamates the Asean FTAs with its dialogue partners (Asean + 1 FTAs) into a single regional trade agreement that can contribute to strengthening regional value chain actives in the region, as well make RCEP more user-friendly especially for small and medium enterprises (SMEs).
The RCEP negotiations were launched in November 2012 at the 21st Asean Summit in Phnom Penh, Cambodia, but the negotiations only formally started in 2013. Initially, RCEP was negotiated by 16 countries, consisting 10 Asean member states and the bloc’s FTA partners — Australia, China, India, Japan, Korea and New Zealand. At the 2019 Asean Summit, Indian Prime Minister Narendra Modi announced that India could not join the RCEP in its current form.
The objective of the RCEP agreement is to establish a modern, comprehensive, high-quality and mutually beneficial economic partnership that will facilitate the expansion of regional trade and investment and contribute to global economic growth and development. Accordingly, it will bring about market and employment opportunities to businesses and people in the region. The RCEP agreement will work alongside and support an open, inclusive and rules-based multilateral trading system, according to a document shared at Malaysia’s Ministry of International Trade and Industry website.
“Our members are keen to gain more details on the agreement. They are eager to take advantage of the opportunities that come with it,” said MCCC executive committee member Sean Lee who will moderate the session on the RCEP. Lee is a founder of a financial planning group and runs a family investment outfit.
Anecdotal reports suggest that the RCEP is already facilitating corporations and manufacturers to look for better opportunities in markets elsewhere.
RCEP, the Asia Pacific trade deal that covers 30% of global GDP, has reportedly given companies a new lifeline, with major Japanese apparel manufacturers shifting more of their overseas production from China to South-East Asia (SEA) in response to China’s rising labour costs and zero-Covid policy chipping away at its dominance.
Major apparel companies, such as Adastria Co Ltd, Aoyama Trading Co Ltd and suppliers of Uniqlo Co Ltd, are moving some of their production bases to RCEP member countries in SEA, taking advantage of reductions in or exemptions from textile import tariffs, according to a recent Nikkei report.
The report cited the example of Aoyama Trading, a major menswear company, which is expanding its product procurement from Indonesia and Vietnam.
MCCC president Loo Kok Seong said the conference aims to enhance the economic and trade exchanges between Malaysia and China, and expand bilateral and multilateral trade and investment opportunities.
Participants will also hear firsthand from representatives from Hainan Province, touted to be China’s emerging free trade port to rival Hong Kong.
China has designated the southern island province of Hainan as a free trade port and will offer tax and trade incentives to draw businesses and tourists, with an apparent goal of providing a mainland alternative to Hong Kong.
- This article first appeared in The Malaysian Reserve weekly print edition