ACCCIM’s Press Statement on the Regional Comprehensive Economic Partnership (RCEP)
Tan Sri Datuk Ter Leong Yap, President of The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said the signing of the RCEP Agreement involving 15 countries, including 10 ASEAN members is a huge milestone in the world multilateral trading system that is expected to contribute significantly to the growth of regional and global economy. RCEP, tagged as the world’s biggest free-trade deal, if implemented swiftly and effectively will serve as an engine for economic recovery in post-COVID-19 new normal era.
Tan Sri Datuk Ter says that RCEP underscores the grouping’s commitment towards the adoption of a free and fair trade to fight the rising wave of protectionism. The trade deal, which offers a huge consumer market of 2.2 billion population (29.7% of the world’s population) and total GDP of around US$24.8 trillion (28.9% of global GDP) and has total trade of US$10.4 trillion, will help to expand intra-ASEAN trade with East Asian economic powerhouses, by promoting supply chains connectivity in the new normal era.
For Malaysia, RCEP will strengthen Malaysia’s position as the lowering of barriers, further streamlining of rules and regulations in trade facilitation will boost Malaysia’s trade with these countries, improve market access for goods and services, attract foreign companies keen on entering into a more integrated ASEAN. This will enhance transparency in trade and investment, as well as facilitate the greater inclusion of ASEAN’s small and medium-sized enterprises (SMEs) to global and regional supply chains. Increased connectivity also bodes well for domestic travel, tourism, hospitality and aviation industry.
With 58% of Malaysia’s external trade is within RCEP countries, and the agreement will provide Malaysian companies and consumers with increased commercial opportunities and partnerships. Companies specialising in industries like telecommunications, banking and finance, and consultancy will benefit from enhanced cooperation. Malaysian businesses will also enjoy better access to quality raw materials at competitive prices.
It is expected that better market access and trade facilitation will benefit the food and beverages industry, chemical and chemical products, rubber products, plastic products, machinery and equipment as well as electronics and electrical products. Textiles and wearing apparels will be dampened by low-cost competitors such as Vietnam while the timber and timber products industry too face competition from the participating countries.
Tan Sri Datuk Ter says that competition is inevitable in global trading market place, which is now being revolutionised by digital technology and e-commerce. It is therefore important that Malaysian manufacturers and SMEs must focus on maintaining products’ quality and standards as well as branding development to stay competitive in international markets. A healthy, competitive business environment can increase innovation, efficiency, and championship. Public delivery services need to be competitive in providing efficient, effective and conducive business environment to facilitate businesses thriving. Pending more details of the agreement to be announced, we can only comment based on the information we can gather so far at this stage.