KUALA 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 needs to hasten the ratification process for the RCEP to be implemented by this year to help businesses stabilise manufacturing activities and rebuild supply-chain connectivity in the region.
Nevertheless, it commended the International Trade and Industry Ministry on its commitment to completing domestic procedures for the ratification of the 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 manufacturers’ post-pandemic recovery and 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% of products entering the intra-regional trade and the RCEP will likely cover 90% of these products,” Soh said.
He said due to the Covid-19 pandemic, the manufacturing sector has been hit hard by a myriad of issues caused by disruptions in the supply chain, which has severely impacted production and trade activities.
As such, he said the post-pandemic trade recovery for local companies will focus more on re-establishing critical supply chains and establishing new global value chains to boost economic growth.
“The further integration of regional economies under the RCEP and CPTPP, in addition to providing Malaysian exporters with preferential access into growing markets across the Asia Pacific, allows for an 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 cost and time for companies by allowing the import and export of products anywhere within the East Asia region without meeting the separate requirements for each country.
Soh added that FMM welcomes the signing of both the CPTPP in 2018 and RCEP last year, while thanking the government for placing importance on Malaysia participating in regional trade agreements to open up new market opportunities for local manufacturers. – Bernama, April 16, 2021
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