Azmin says Malaysia’s trade rose to RM21.5b in June 2022, highest since RCEP kicked in

KUALA LUMPUR, July 27 – While it is still too early to see the full benefits, Malaysia’s exports have already shown significant growth after the Regional Comprehensive Economic Partnership (RCEP) kicked in, International Trade and Industry Minister Datuk Seri Azmin Ali told Parliament today.

He said that since the inception of RCEP in March until the end of last month, a total of 73 preferential certificates of origin (PCO) have been approved, with an export value of RM31.9 billion for the export of goods under the trade deal.

"In June alone, we recorded the highest export value, at RM21.5 billion," he said in the Dewan Rakyat.

Azmin was responding to Penampang MP Datuk Ignatius Darell Leiking from Parti Warisan, who was also the previous international trade and industry minister, and had wanted to know the impact of RCEP on Malaysia's trade since it came into effect.

The senior minister said that Malaysia's external trading performance until mid-2022 continued to maintain a stimulating performance.

He said that in April, the country's trade registered RM231.44 billion, with exports amounting to RM127.49 billion.

"Trade performance continued to improve in May, with a value of RM228.37 billion, of which exports registered RM120.49 billion.

"Meanwhile, in June 2022, the country recorded the highest value of export and import trade this year, with trade increasing by 43.4 per cent to RM270.39 billion compared to the same period last year," he said.

RCEP came into force in Malaysia on March 18, which paved the way for the country to integrate into the world’s largest FTA that involves 15 countries, with a total population of more than 2.2 billion.

Anchored on the rules-based multilateral trading system, RCEP enables Malaysia to enjoy the global trade and investment ecosystem, benefiting from the eventual elimination of around 90 per cent of tariff among members.

Azmin also highlighted a report released by the United Nations Conference on Trade and Development (UNCTAD) last December that projected Malaysia as becoming the biggest beneficiary among Asean members in terms of imports and exports.

"Seeing that RCEP was only implemented in Malaysia on March 18, it is too soon to see the results of RCEP on the country's trade industry.

"However, based on a report by UNCTAD that was released on December 15, 2021 titled 'A New Centre of Gravity: The Regional Comprehensive Economic Partnership and its Trade Effects' Malaysia is slated to receive the biggest benefits among Asean countries in terms of exports," he said.

He said the report estimated exports in Malaysia to increase as much as US$200 million through the removal and reduction of tariffs for trade goods, as well as the upgrading of import and export infrastructure among RCEP countries.

The Gombak MP explained that in order for importers and exporters to gain the benefits in terms of exclusions and reduction of duty imports in a free trade agreement (FTA), they must have a PCO.

He said that the PCO is an international trade document to prove that the goods being imported or exported are aligned with the conditions set in the Rules of Origins in a FTA, and serves as confirmation for the Customs Department of the importing country to provide concessions under the relevant FTA.