Taiwan can invest more in Malaysia as CPTPP member
19 Aug 2020
Taiwan sees itself increasing its investments in Malaysia upon being confirmed as a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement.
Taipei Economic and Cultural Office in the Malaysian capital said that Taiwan and Malaysia shared multiple economic and commercial interests.
“As more than 75 per cent of Taiwan’s exports to Malaysia are semi-finished products such as electrical components and mechanical parts, Taiwan’s inclusion in the CPTPP will be able to eliminate tariffs on importing goods and encourage more Taiwanese companies to choose Malaysia as their investment destination and Asean production base as they seek to expand into the region.”
The office noted that over the past decades, Taiwan had been one of Malaysia’s major trading partners.
In 2019, for instance, Taiwan was the 7th largest trading partner of Malaysia.
Taiwan is also a significant investor in Malaysia, ranked the fifth of foreign direct investment (FDI up to date, focusing mainly on manufacturing industries, especially in the electronic, biotechnology and high-technology related sectors.”
It also said Taiwan’s CPTPP membership may further extend all the benefits to Malaysia’s foreign trade and its employment accordingly.
CPTPP nations include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singaporeand Vietnam.
According to Taiwan’s Office of Trade Negotiations (OTN), Taiwan was well prepared to join the CPTPP as it had completed impact assessments, fulfilled numerous domestic outreach events to business associations, universities and legislative bodies, as well as accomplished many crucial law amendments.
It added that as a full member of the World Trade Organisation (WTO), under the title of “Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu”, Taiwan had been actively participating in all WTO-related activities and faithfully fulfilling its obligations in the multilateral trading system.
Taiwan also recognised the significance of a high-standard and comprehensive regional agreement, such as the CPTPP, that builds upon rights and obligations under the Marrakesh Agreement establishing the WTO.
Taiwan has close economic and trade relations with members of the CPTPP.
While 30 per cent of Taiwan’s imports come from CPTPP members, 20 per cent of Taiwan’s exports go to CPTPP members.
Japan, Singapore, Malaysia and Vietnam are Taiwan’s top 10 trading partners.
In terms of investment, 30 per cent of Taiwan’s total FDI came from CPTPP members, while more than half of its outbound investment (54 per cent) went to CPTPP members.
Taiwan is currently the 18th largest trading member of the WTO, and the seventh largest investor in Asia Pacific.
“Presently, the US-China trade war and the Covid-19 pandemic have caused tremendous changes in the global economic and trade environment. All economies must reconsider how to sustain global competitiveness and maintain employment in the future.
“At this critical moment when the global supply chain is undergoing restructuring, Taiwan needs the world, and the world also needs Taiwan as a leading player in the global value chain,” it stressed.
During the US-China trade tiff, Taiwan outperformed most countries in the world with growth rates of 2.7 per cent in 2019.
Under the outbreak of Covid-19 pandemic, Taiwan maintained 1.59 per cent growth rates in the first season of 2020.
If comparing with 11 members of CPTPP, Taiwan ranked the fifth largest economy, next to Japan, Canada, Australia, and Mexico.
Moreover, according to the WTO-OECD Trade in Value-Added database, Taiwan had the highest participation rate (67 per cent) in global value chains among current CPTPP members.