MNZCC Encourages Malaysia to Accelerate Ratification of the CPTPP Agreement
CPTPP’s Focus On Expanding Open, Rules-Based Trade Is Needed Now More than Ever
The Malaysia New Zealand Chamber of Commerce (MNZCC) welcomes growing calls for Malaysia to accelerate its ratification of the CPTPP Agreement. As with others, it strongly encourages Malaysia to do so, to ensure the Malaysian people benefit from a robust economic recovery following the COVID-19 pandemic.
The MNZCC believes the CPTPP’s focus on expanding open, rules-based trade is needed now more than ever, as Malaysia and the region look to recover and recoup losses from the impacts of COVID-19. Once ratified by all members, the agreement will cover over 13 per cent of world GDP with a total value of approximately US$10.6 trillion. For Malaysia in particular, CPTPP eliminates tariffs on 96 per cent of its exports. This will provide significant growth opportunities for local businesses, increasing number and range of jobs available for Malaysians, and benefitting the economy overall.
New Zealand has already begun to see gains from ratifying the agreement in 2018. With the agreement having been fully implemented in just 7 economies, New Zealand’s two-way trade with the member countries rose from $NZ44.5bn in 2017 to NZ$50.6bn in 2020 – an increase of 13.7 per cent. New Zealand is also likely to benefit more in the coming years as a result of Peru’s implementation of the CPTPP on 19 September 2021. The total number of countries that have implemented the CPTPP now stands at eight. The CPTPP did more than just lowering tariffs; it also reduced the amount of time that exporters had to wait for their goods’ customs clearance, as well as lowering compliance costs and increasing predictability for our exporters.
The CPTPP has particular benefits for Small-to-medium sized enterprises (SMEs), that make up nearly half of the Malaysian economy, and who are often disproportionately impacted by non-tariff barriers. The CPTPP has a dedicated chapter designed to support the growth and development of smaller businesses, by ensuring their participation in, and ability to benefit from, the agreement.
This sits alongside a dedicated chapter on cooperation and capacity building that recognises the additional support required to allow such businesses to meaningfully engage in regional trade. Amongst other provisions, the chapter commits members to exploring capacity building opportunities for members to develop and enhance SME export counselling, assistance and training programmes. This is of particular importance to New Zealand and Malaysia where SMEs account for some 97 per cent and 98.5 per cent of all business respectively.
The MNZCC also believes the agreement will deliver benefits for the wider Malaysian workforce, through its world-leading provisions on labour and environmental standards. This will help to ensure high-quality jobs and economic growth that supports sustainable development for all.
The growing interest from a range of economies in joining the CPTPP is a testament to its importance. The UK formally requested to join in February 2021, and there has been heightened interest from the Republic of Korea, the Philippines, Taiwan and China. Any expansion to the agreement’s membership will bring additional benefits and new opportunities for any countries already part of the agreement.
The current CPTPP economies are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Viet Nam. Three economies, namely Malaysia, Chile and Brunei Darussalam have yet to ratify and implement the CPTPP.
It is indeed our hope that Malaysia will be the next country to ratify this Agreement, so that Malaysians too can benefit from the tremendous opportunities offered by the CPTPP.
