The Federation of Malaysian Manufacturers (FMM) has been a strong advocate of Trans Pacific Partnership Agreement (TPPA). We have always maintained that the TPPA will contribute significantly to improving market access, expanding exports, increasing economic activities and enhancing employment. We are therefore disappointed with the withdrawal of the Unites States from the TPPA on Monday after five long years of hard work to make the TPPA a reality.
As of now, Malaysia has concluded seven bilateral FTAs (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). The TPPA became one of the more important of new FTAs being negotiated which was expected to provide a competitive edge over our regional competitors and build investor confidence in Malaysia because it promised Malaysian companies and TPPA countries a degree of transparency and predictability in investment rules, tariff concessions and avenue to address non-tariff barriers.
We are therefore heartened to note that there is still communication among the 11 remaining countries to consider all available options to keep the TPPA alive including reformulating the agreement without the United States.
FMM is therefore hopeful of thepossibility of salvaging an APEC-wide agreement among the remaining members of the TPPA. As such, FMM will remain an active partner to the Government andwill continue to support with views and business inputs on the way forward in the crucial months to come.
The TPPA was expected to open up another 10% of Malaysia’s duty free trade with new non-FTA markets namely US, Canada, Mexico and Peru. Hence, our government must continue to engage these countries to strengthen our trade ties through bilateral trade agreements if the TPPA fails to materialise.
We also look forward with great anticipation to the successful conclusion of other important FTAs, especially the Regional Comprehensive Partnership Agreement (RCEP) currently being negotiated. We note that the RCEP negotiation has made significant progress and are very hopeful for a swift and successful conclusion of the RCEP by the end of this year. The European Union (EU) is Malaysia’s largest trading partner and second largest source of foreign direct investment. Although Malaysia had started negotiations on the Malaysia–EU Free Trade Agreement in 2010, negotiations were subsequently put on hold. Malaysian exporters to the EU are extremely interested to see the negotiations concluded, especiallyas Malaysia graduated from the list of countries that enjoy tariff reductions from the EU’s General System of Preferences (GSP) in 2014. We urge the Government to remain committed to the FTA and resume negotiations at the earliest opportunity. As an open economy dependent on trade and investment to sustain and grow the economy, increased market access for our products at preferential rates is always welcome.
January 25, 2017
YBhg Tan Sri Dr. Lim Wee Chai
President, Federation ofMalaysian Manufacturers