CPTPP Will Boost Malaysia’s Trade Industry

The Cabinet of Malaysia has agreed to ratify the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) on September 30, 2022. The CPTPP will come into force on November 29, 2022, sixty days after the ratification submission.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The purpose of the CPTPP is to facilitate trade and reduce trade barriers for CPTPP members’ countries.

The Malaysian Ministry of International Trade and Industry (MITI) said that tariffs will be eliminated for most exports to CPTPP member countries. Products that will receive duty-free treatment include automotive parts and components, plastic products, surgical gloves, rubber products, textiles and clothing, cocoa products and food items. Duties currently imposed on processed food and beverages will be eliminated by the year 2028 (Canada), 2032 (Mexico), 2038 (Japan) and 2033 (Peru).

As a result of the reduced trade barriers, Malaysia is expected to be more prominent as a global trading economy. The Cost Benefit Analysis (CBA) conducted for the CPTPP reported that Malaysia’s total trade is expected to increase to USD665.9 billion in 2030. Malaysia’s exports have also been estimated to reach USD354.7 billion in 2030.

Under the CPTPP, Malaysian exporters would be able to expand their businesses into new markets, such as Canada, Mexico and Peru. Consequently, the CPTPP will increase Malaysia’s competitiveness in the global market, elevating the country as a global trading hub.