PETALING JAYA: Two business groups appear to be looking forward to Malaysia’s signing of the Regional Comprehensive Economic Partnership (RCEP) agreement this Sunday.

Spokesmen for the Federation of Malaysian Manufacturers (FMM) and the SME Association of Malaysia told FMT their organisations would welcome the wave of new competition set to enter the market.

It would only serve to improve local businesses and the manufacturing industry, they said.

International Trade and Industry Minister Mohamed Azmin Ali said yesterday that eight years of talks had finally concluded, paving the way for the signing of the world’s largest trade deal.

The pact brings together all 10 Asean nations as well as China, Australia, New Zealand, Japan and South Korea.

FMM president Soh Thian Lai said the signing would “surely fulfil the wishes of the manufacturing sector” as it would give local manufacturers access to a wide market and compensate for the dip in domestic trade.

He said he wasn’t worried about the extra competition local manufacturing would face, as it would only force local producers to improve.

“Manufacturers are facing stiff competition anyway,” he said. “What’s most important is that exporters prepare to sharpen their competitive edge in order to manage export sales successfully.

“We must face up to the challenges by making Malaysian industries globally competitive.”

Michael Kang, president of the SME association, said the pact could only be a good thing for local businesses.

He said SMEs had already been leveraging regional trade agreements to boost profits and the expansion into new areas should promote further growth and help Malaysia establish itself as a regional hub for trade.

He added that the threat of competition was the price of establishing such a large free trade area.

“I think SMEs need to take some time to improve the way they operate by digitising their operations and making themselves more competitive,” he said. “They need to adopt new technologies and bring in new talent to make their companies more capable of challenging all the other countries in the RCEP.”