THE Comprehensive and Progressive Agreement for The Trans-Pacific Partnership (CPTPP) offers better market access to Malaysian exporters, said the Federation of Malaysian Manufacturers (FMM).
FMM president Tan Sri Soh Thian Lai said the agreement offers deeper tariff concessions especially to the three new markets, namely Canada, Mexico and Peru. He said Malaysia previously had no free trade agreements (FTAs) with the three countries mentioned.
This is particularly important as under the CPTPP, Canada removes duties on 96.6% of its tariff lines; Mexico offers duty-free treatment on 80% of its tariff lines; and Peru eliminates duties on 86.2% of its tariff lines on Jan 1, 2023, he said in a recent statement.
Soh noted that there has been growing interest by companies when it comes to the application for the CPTPP.
He said a number of businesses have applied to the Ministry of International Trade and Industry (MITI) and the Royal Malaysian Customs Department to avail themselves of the tariff concessions under the CPTPP.
Soh said the applications now number in the hundreds and many of these applications are for exports to the three new markets.
“We believe the high take-up rate by Malaysian exporters in a matter of weeks since the implementation of the CPTPP reaffirms the findings of the Cost and Benefit Analysis (CBA) published by MITI on July 25, 2022, which states that Malaysia has strong export capabilities in sectors such as electrical and electronic, palm oil, chemicals, optical and scientific equipment and plastics, all of which will benefit from the market opening in Canada, Mexico and Peru.
“Together with the Regional Comprehensive Economic Partnership (RCEP) which was implemented on March 18, 2022, Malaysia’s implementation of the CPTPP will improve Malaysia’s competitiveness and attractiveness as an investment destination for global companies to use Malaysia as a gateway to both trade blocs,” Soh remarked.
The Malaysian government ratified the Regional Comprehensive Economic Partnership (RCEP) Agreement on March 18, 2022, and the CPTPP on Nov 29, 2022. It has also signed a Memorandum of Cooperation (MoC) with the US on May 11, 2022, to expand semiconductor supply chain resilience between the two nations. — TMR
- This article first appeared in The Malaysian Reserve weekly print edition