Image credit: Nikkei Asia
PETALING JAYA: Malaysia’s decision to ratify two trade pacts has shown that the country is serious about business and that it supports a fair and transparent trade regime, according to the Small and Medium Enterprises Association of Malaysia (Samenta).
However, Samenta said, the government should help SMEs adapt to the expected higher standards of compliance, especially in the areas of environmental and labour standards, required under these trade agreements.
In a media release issued today to voice support for the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Samenta chairman William Ng said SMEs had considered both the pros and cons of ratifying the two regional agreements and concluded that the pros outweighed the cons.
Malaysian signed on to the CPTPP on Sept 30, making it the ninth of the 11 countries to ratify the agreement. On March 18, it became the 12th signatory to the RCEP.
Ng said that while both agreements opened up new markets to Malaysian businesses and addressed long-term trade issues such as non-tariff barriers, there were challenges that must be dealt with.
He said SMEs were more susceptible to such barriers and their ability to compete fairly could be impeded without a trade agreement that addressed such issues.
“As we emerge from the Covid-19 pandemic, we will need all the support to reaffirm our position within the global supply chains,” he said.
He said Malaysia’s ratification of the RCEP and CPTPP would help assure trading partners that the country was serious about business.
Ng said that while the CPTPP would bind Malaysia to certain procedures such as the investor-state dispute settlement, it was also reciprocal.
“This will serve to protect Malaysian investments in other participating economies,” he said.
On the matter of compliance, Ng said that while SMEs understood that there was already a drive to meet environmental, social and governance (ESG) standards, the readiness of Malaysian businesses varied.
He said the disparity in environmental and labour standards among the participating economies could tip the scale against some participants, particularly SMEs.
Source: https://www.freemalaysiatoday.com/category/business/2022/11/10/ratifying-trade-pacts-the-right-move-for-malaysia-says-sme-group/