The Federation of Malaysian Manufacturers (FMM) said the agreement promised a degree of transparency and predictability in investment rules and tariff concessions, and an avenue to address non-tariff barriers for local manufacturers.
“The CPTPP is expected to diversify Malaysian manufactured product exports. For example, over 80% of Malaysian exports of automotive parts, particularly rubber components, are expected to enjoy duty-free access immediately.
“This will help Malaysian parts and components manufacturers to export to global original equipment manufacturers located in CPTPP countries like Mexico, and become part of the global supply chain,” FMM told Bernama today.
The federation said tariff concessions agreed on by each CPTPP country would boost exports for the electrical and electronics (E&E) industry, which has been a key contributor to Malaysia’s export earnings.
It also expected export growth to other countries such as Canada and Latin American countries, particularly Mexico.
“These countries currently impose high tariffs for electrical appliances, telecommunication devices and consumer electronics.
“Malaysia is the market leader for rubber gloves in Canada, and second in Peru and Mexico after China. Latex goods, especially rubber gloves, remain the largest contributor to Malaysia’s export of rubber products.
“Given the continuous increase in demand of nitrile gloves in Canada, Malaysia’s participation in the CPTPP will give our glove manufacturers a competitive advantage over non-CPTPP countries like China in such exports,” it added.
FMM said manufacturers were also expected to benefit from a diversification of import sources of industrial input and components.
“The CPTPP allows for an increase in sources of imports of better quality raw materials from Japan and Mexico. It also provides alternative sources of imports for heavy machinery and equipment,” it said.
In terms of enhancing competitiveness and trade, FMM said the agreement was expected to open up another 10% of duty-free trade with new non-free trade agreement (FTA) markets like Canada, Mexico and Peru.
“Competition is not new to businesses in Malaysia, and the country has concluded seven bilateral FTAs (with Japan, Pakistan, New Zealand, India, Chile, Australia and Turkey) and five regional FTAs through Asean (Asean with China, Korea, Japan, India and Australia-New Zealand).
“Given that a majority of our trade is already covered by these FTAs, we are confident that our manufacturers are well placed to withstand the further opening of domestic markets,” it added.
The CPTPP, signed on Mar 8, is a new version of the Trans-Pacific Partnership (TPP) multilateral trade pact.
It comprises 11 member nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.