RCEP and CPTPP are useful for SMEs, but early support needed
The Small & Medium Enterprises Association (SAMENTA) Malaysia has reaffirmed its support for both The Regional Comprehensive Economic Partnership (RCEP) and The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in light of objections being raised by consumer groups.
“We have considered the pros and cons of Malaysia’s ratification of both regional agreements, and believe the pros outweigh the cons,” said SAMENTA chairman Datuk William Ng.
Both agreements open up new markets to Malaysian businesses and address long-standing trade issues such as non-tariff barriers (NTBs). SMEs in particular are more susceptible to NTBs, and our ability to compete fairly is impeded without a trade agreement that addresses such issues.
As we emerge from the Covid-19 pandemic Ng noted that SMEs will need all the support to reaffirm our position within the global supply chains. He said: “Our ratification of RCEP and CPTPP will be a strong assurance to our trading partners that Malaysia is serious about business and is supportive of a fair, transparent trade regime.
“It is true that CPTPP in particular will bind Malaysia to certain procedures such as investor-state dispute settlement (ISDS), but we must remember that this is reciprocal, and will serve to protect Malaysian investments in other participating economies.”
While SAMENTA is supportive of both trade agreements, Ng urged the government to quickly put in place training and capability building programmes to help SMEs adapt to the expected higher standards of compliance, especially in the areas of environmental and labour standards.
He explained that SMEs understand that these, as part of the environmental, social and governance (ESG) drive, are fast becoming global standards. However, when compared to advanced economies such as Canada, Malaysian SMEs’ readiness are varied.
Furthermore, the disparity in environmental and labour standards between the participating economies could create an unfair playing ground for participants, especially the SMEs.
Among the commitments made by CPTPP signatories such as Canada is the transfer of knowledge and specific programmes to address any gaps in readiness among SMEs to enter the Canadian markets and to compete fairly among the CPTPP economies.
Ng said SAMENTA looks forward to working with MITI and MEDAC to identify these gaps and help our SMEs seize the new opportunities presented by the new trade regime.
