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Malaysia’s Tier 2 Watch List status boosts trade prospects, says FMM

FMM In The News: THE MALAYSIAN RESERVE, June 20, 2023 - THE Federation of Malaysian Manufacturers (FMM) has commended the recent elevation of Malaysia to the Tier 2 Watch List in the US Trafficking in Persons (TIP) Report 2023.

Its president Tan Sri Datuk Soh Thian Lai (picture) said the development, it said, is seen as a significant achievement that will benefit the country’s industries and improve their access to international markets, particularly for sectors facing stringent trade restrictions due to higher labour standards, including forced labour issues.

He said the upgrade in Malaysia’s ranking is particularly noteworthy, as it helps restore the reputation of Malaysian exporters, which was previously marred by the Tier 3 ranking on the TIP report.

It is important to note that forced labour is not a widespread issue across all industries and companies in the country.

He said the improved ranking and ongoing efforts to enhance Malaysia’s position in the TIP report are expected to facilitate negotiations for free trade agreements with the United States and other major trading partners that emphasise strict labour provisions.

Tai said the transition from the Tier 3 Watch List to the Tier 2 Watch List is a testament to the collaborative efforts of the government and industries in Malaysia.

“The Government has taken the matter very seriously and has, amongst others, launched the National Action Plan on Forced Labour to underscore its commitment to eliminate forced labour in the country by focusing on awareness, enforcement, labour migration as well as access to remedy and support services,” Tai said.

He added that industries, with the support of the government and trade associations, have also intensified their efforts to eliminate forced labour from their supply chains.

These proactive measures, he said, have contributed to the improvement in Malaysia’s ranking and have prevented any adverse impact on market access for Malaysian businesses.

“Moving forward, the concerted efforts to implement the National Action Plan on Forced Labour by all stakeholders must continue to ensure that the country progresses to a Tier 1 ranking in the coming years,” Tai concluded.

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