Malaysia is looking towards ratifying the Regional Comprehensive Economic Partnership (RCEP) agreement by the end of this year, the International Trade and Industry Ministry (MITI) deputy secretary-general (Industry) Datuk Seri Norazman Ayob said.
“We are looking towards ratifying the RCEP by the end of this year, if not, the latest is by the first quarter of next year,” he said in a webinar organised by the Associated Chinese Chamber of Commerce and Industry of Malaysia recently.
He said RCEP will come into force 60 days after Malaysia completes its domestic procedures and subsequently submits an instrument of ratification to Asean Secretariat.
For the RCEP to come into force, six Asean member states and three Asean free trade agreement partners would have to ratify the agreement.
On that, he said, the main benefit of the RCEP is wide market access and integration into the supply chain.
He remarked that market access is achieved primarily by enjoying lower import duties, however, import duty is only one element in terms of the competitiveness of the product.
“We also have to focus on other elements, for example, in terms of the quality of the product, the after-sales service and the technological advantage that the product holds over the competitors,” he said.
Norazman said small and medium enterprises (SMEs) must tap the opportunities in the RCEP and protect themselves against competition.
“The government, in particular, is very supportive of our industries and businesses. As far as SMEs are concerned, there are plenty of programmes and initiatives, not only by MITI, to help our SMEs.
“I hope the SMEs will continue to strive and constantly improve, as well as leverage the various initiatives and programmes that are available, including on digitalisation and adoption of IR4.0,” he said.
Malaysian Investment Development Authority (Mida) chairman Datuk Abdul Majid Ahmad Khan echoed what Norazman said, that the government is very conscious of building up the role of SMEs as they form about 97% of Malaysia’s industrial base.
“As far as Mida is concerned, we have created a lot of incentives and awareness so that SMEs can come forward. The sectors that we are encouraging now are automation, IR4.0 and digitalisation.
“I think we have better feedback now because when it was first introduced, most SMEs had different attitudes regarding the financial commitments and technology involved.
“After the Covid-19 pandemic hit, SMEs can see how e-commerce boosts businesses, so there is now a positive attitude. Mida is ready to assist and is open to further dialogue with the SMEs,” he stated.
On the wider economic context of the RCEP, Abdul Majid said the framework covers almost one-third of the world’s population and about one-third of its GDP, which means there are a lot of opportunities for businesses among the 15 countries.
“RCEP is an important catalyst for Malaysia to further strengthen its relationship with its neighbouring nations.
“As Malaysia is next to one of the world’s busiest shipping lanes and is competitive regional hub, it can offer the other 14 countries its strategic location as a gateway to Asean and beyond,” he said.
He shared that RCEP countries invested a total of RM104.6 billion in manufacturing projects from 2017-2020, creating 91,268 job opportunities in Malaysia.
“We can take advantage of what Malaysia has developed over the years — we have advanced manufacturing ecosystem, our supply chain linkages are very matured, our talented human capital are quite well-placed and most importantly, we have friendly business policies and good infrastructure, such as logistics, banking and telecommunication, as well as diversity of languages,” said Abdul Majid.
He further elaborated that there will be opportunities for homegrown companies to enhance the country’s supply chain, have access to regional markets, develop more innovative products, and most importantly, emerge in the international business platform.
“I think we want our local companies to be champions and play a leading role. I personally feel the next sector that Malaysian companies can go into the global market in a big way in the next few years is the electrical and electronics and semiconductor sector.
“We already have some players that are producing components. Maybe, they can follow the footsteps of rubber and rubber products where we produced a number of local champions,” he said.
He added that Mida is also encouraging the aerospace, halal, creative and agriculture (relating to smart farming) industries to be champions.
Source: https://themalaysianreserve.com/2021/03/29/miti-malaysia-to-ratify-rcep-by-year-end/