PETALING JAYA: Malaysia cannot afford to withdraw from the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP) free trade agreement, say business leaders.
Malaysian Consortium of Mid-Tier Companies (MCMTC) president Callum Chen said the group shared the same views as the Federation of Malaysian Manufacturers (FMM) and was against the call from certain parties urging the government to withdraw from the pact.
"Unlike other trade agreements, the CPTTP not only opens up trade but also brings about technical assistance and technological know-how transfer, which are critical for capacity-building for local businesses.
"Malaysia's recovery from the pandemic is already lagging behind our Asean neighbours. The delay in ratification has already caused Malaysia to lose ground regarding foreign direct investment (FDI).
"Vietnam, which signed earlier in January 2019, has become the springboard for Canada into the Asean market via the CPTPP. It could have been Malaysia," he said in a statement on Saturday (Dec 3).
On Nov 29, the FMM said in a statement that Malaysia would run the risk of being relegated to the sidelines if it withdrew from the CPTTP.
The MCMTC comprises mid-tier companies from all industries and are mostly exporters. Such companies form 1.7% of total companies in Malaysia, employ 16% of the total workforce and contribute 39.9% of Malaysia's gross domestic product (GDP).
Although Malaysia is a small country in terms of population and land area, Chen said that in terms of trade, we are ranked 25th in the world.
"We have become an integral part of the global supply chain. This did not happen by chance or overnight but through relentless efforts on the part of industries.
"While much has been said about the costs versus benefits of the CPTPP, trade and industry are the lifeblood of the nation.
"Simply put, any reversal will be disastrous," he added.
Chen also noted that the capable teams at the International Trade and Industry Ministry (Miti) and its agency – Malaysia External Trade Development Corp (Matrade), have worked hard with industries to ensure Malaysia is not left behind in the highly competitive and unpredictably volatile global scenario.
Chen said Malaysia should think again if it really wants to reverse from the global market of 508 million people, which is the combined population of the 11 CPTPP countries as of 2019, representing 6.6% of the world population, while the huge market generates a GDP of USD11.3 trillion (RM49.5 trillion) – 13% of the world GDP and 15% of total world trade.
"With the UK, China, Taipei and Ecuador added in, the eventually combined population will be two billion – 26% of the world population – with a GDP estimated at USD29 trillion (RM127 trillion), which is 33% of the world GDP, accounting for 32.8% of total world trade.
"The potential advantages of remaining in this market are clear," he said.
Other members of the CPTPP, which was originally called the Trans-Pacific Partnership Agreement, are Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore and Vietnam.
The 11 countries signed the deal in March 2018, and Malaysia is the ninth country to have ratified the CPTPP in October 2022. Brunei and Chile have yet to do so.
The agreement removes 95% of tariffs between its 11 members.