Malaysia confident IPEF will strengthen Indo-Pacific economic cooperation, says PM
26 May 2022
Malaysia is confident that the Indo-Pacific Economic Framework (IPEF) will strengthen economic cooperation between countries in the Indo-Pacific and the ASEAN region, said Prime Minister Datuk Seri Ismail Sabri Yaakob.
During the question-and-answer session at the 27th International Conference on the Future of Asia, he said the new trade initiative provides a holistic structure to resolve trade issues with partner countries.
“Malaysia is ready to discuss relevant issues through the IPEF to ensure that the members can optimise the economic and strategic benefits as outlined in the framework,” he said, adding that the medical, electrical and electronics (E&E) sectors, as well as the digital economy are expected to benefit from the trade initiative.
The IPEF was launched on May 23 by US President Joe Biden in Tokyo during his visit to Japan.
Malaysia is one of the member countries of the new trade pact, which also comprises the US, Australia, Brunei, India, Indonesia, Japan, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam.
Ismail Sabri said Malaysia had been a long-time supporter of inclusion through regional economic integration, with the signing of bilateral and unilateral agreements.
“As a country that has an advantage in terms of resources as well as talent, Malaysia always takes the opportunity to expand trade and investment liberalisation,” he said.
He added that platforms such as the Regional Comprehensive Economic Partnership (RCEP) and the IPEF offer distinct advantages, with each one complementing the other, ultimately contributing to regional economic integration.
“The advantages offered by each pact differ for various sectors. Admittedly, some parties may stand to gain more benefits, depending on the economic landscape and the parties involved in the agreement,” he said.
Meanwhile, the prime minister added that Malaysia is expected to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) by year end.
Together with the RCEP, the CPTPP will create the space for the implementation of the Free Trade Area of the Asia-Pacific (FTAAP) initiative.
Ismail Sabri said Malaysia foresees exports of products such as E&E, optical and scientific equipment and chemicals to CPTPP markets to increase following the ratification of the trade pact.
“It can strengthen investors’ confidence and encourage more foreign investments, not only among CPTPP member countries but also non-CPTPP countries as they would want to take advantage of the tariff concessions offered through the agreement,” he said.
Meanwhile, the elimination of and reduction in tariffs for exports and imports of products will further facilitate the trade flow for products and services among RCEP member countries. It will also boost trade activities and cross-border investments, subsequently strengthening the regional value chain, Ismail Sabri said.
Sectors which are expected to benefit from the RCEP include telecommunications, finance and commodities such as oil palm-based products, rubber, timber and timber products such as furniture.