RCEP-CPTPP to boost Malaysia’s opportunities
29 Sep 2021
Malaysia remains an attractive destination for Australian investment despite the challenges brought by Covid-19, Australian High Commissioner Dr Justin Lee said.
Lee told The Malaysian Reserve (TMR) that swift ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) agreement would open up more business opportunities for Malaysia.
Lee said trade agreements are crucial to promoting Malaysia as an investment destination and helping businesses to grow and create new jobs.
Australia and Malaysia are among the countries that negotiated two key regional agreements — the CPTPP and RCEP.
“Australia ratified CPTPP in 2018 and is working to ratify RCEP. Malaysian ratification of these agreements would show the world that Malaysia is open for business,” he said.
Prior to this, Malaysia-Australia Business Council has urged the government to ratify the CPTPP as soon as possible.
MABC said in a statement that despite the signing for CPTPP in 2018, Malaysia has yet to ratify it, causing Malaysian businesses to lose its benefits, including new or expanded access to key export markets.
“CPTPP is also about more than opening new markets. Australia and Malaysia already have other free trade agreements, but CPTPP will reduce barriers to two-way trade even further, providing new opportunities for businesses and greater choice for consumers in both countries,” the council said.
Lee told TMR that Australian companies have made a wide range of high-tech investments in Malaysia, in sectors such as manufacturing, property, critical minerals, education and healthcare.
“We are thrilled that two of these Australian investors in Malaysia — BlueScope Steel Ltd and Lynas Rare Earths Ltd — are among the sponsors for Australia now Malaysia, a celebration of diversity, cooperation and cultural exchange between our two countries.
“Maintaining fair and predictable policies for investors will be crucial for Malaysia to attract and retain investment in the hightech industries of the future and prosper in an increasingly competitive region,” he told TMR.
Australia and Malaysia are key investment partners, with a two-way investment worth over RM90 billion at the end of 2020.
Echoing the same sentiment, Socio-economic Research Centre ED Lee Heng Guie said it is important for Malaysia to identify a clear set of national investment aspirations in terms of what it wants to offer investors and what the country seeks in return.
“The shaping of a good investment climate is augmented by better investment facilitation, predictable regulatory environment, as well as stable economic and political conditions.
“The fast rectification of RCEP and CPTPP are expected to increase Malaysia’s attractiveness as an investment destination for companies looking to diversify their supply chains, opening up market access for goods and services as well as digital products,” he told TMR.
Post-pandemic, he believed Malaysia needs to continue enhancing its good investment climate to rival our regional competitors in making Malaysia’s an attractive investment destination in the region.
“There remain many complexities and challenges ahead for Malaysia to remain on the investors’ radar to draw in high quality and technology-driven investments to help our country’s quest towards a developed high-income nation.
“The challenges are the regulatory burden, competitive investment incentives regime, the shortages of skilled workers, the level of technology adoption, and other related costs, risks and barriers to competition faced by the businesses,” he said.
However, Malay Economic Council senior fellow Ahmad Yazid Othman said the government must delay and ignore ratification of both agreements, and focus on bilateral trade goods only with all major economies.
“Logically we need more protectionism as part of our post-Covid policy measures,” he said.
“There is over-dependence on export-based foreign direct investment when we should be also promoting and incentivise direct domestic investment,” he added.
Source: The Malaysian Reserve