Immediate tariff removal for 85% of rubber products under TPPA


A trader arranges natural rubber blocks at a shop in Pahang, outside Kuala Lumpur on January 12, 2016. Natural rubber is used extensively in many applications and products, either alone or in combination with other materials. In most of its useful forms, it has a large stretch ratio and high resilience, and is extremely waterproof. AFP PHOTO / MOHD RASFAN

KUALA LUMPUR: The Trans-Pacific Partnership Agreement (TPPA) is expected to result in immediate tariff elimination for about 85% of rubber products while tariffs on other rubber products will be phased out within 16 years from the implementation of the trade pact in 2018.

“Given the lower tariff barriers under the TPPA, the Malaysian rubber products industry will be more competitive in the TPP markets,” said Malaysian Rubber Export Promotion Council (MREPC) in a statement on Monday.

Therefore, it said, Malaysian companies should have advantages over closest rivals in Thailand, China, Indonesia, India and Sri Lanka in exporting products to major member countries such as the United States, Canada, Mexico, and Australia. 

The MREPC said in 2014, the total imports of rubber products (including tyres, gloves, footwear and industrial products) by the 12 TPP members were estimated at US$96bil (RM394bil) while world imports stood at US$269bil (RM1.1 trillion).

“The TPP countries have a sizeable demand for rubber products with imports into these countries currently accounting for approximately 36% of the world imports of rubber products, and Malaysia is among the top ten exporters of rubber products to TPP countries,” it said.

Meanwhile, the International Trade and Industry Ministry (Miti) excluded the possibility of other major rubber products exporting countries such as Thailand and Indonesia joining the TPP soon.

“It will not happen in the near future as the TPP cannot accept new members until the pact comes into force,” it said, adding that Malaysia would gain first mover advantage having signed the trade agreement in February.

New countries wishing to join the pact at the later stage would have to negotiate the terms with individual members of the TPP, he said.

On issues relating to labour and environmental regulations, Miti said certain policies were classified under domestic laws and procedures and therefore could not be applied in the TPPA.

“The TPPA will ensure that all member countries comply with international standards when it comes to labour and environment which encourages good governance with greater emphasis on transparency in businesses,” it said.

The statement also said the agreement would also safeguard local businesses, especially the small and medium enterprises. - Bernama


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