KUALA LUMPUR, March 18 — The Regional Comprehensive Economic Partnership (RCEP) agreement would likely create a trade diversion with more countries shifting their sources to the Asia-Pacific region including Malaysia, amid stifle global economic growth and ongoing volatility due to the Russia-Ukraine geopolitical tensions.
Malaysia External Trade Development Corporation (Matrade) director of Asean and Oceania Raja Badrulnizam Raja Kamalzaman said RCEP would be more attractive for many countries such as those in the European Union to trade with more countries that are stable.
“We hope that trade will grow and we expect to receive more enquiries from countries that used to source from Ukraine and Russia, especially for commodities,” he told Bernama after the ‘China-Asean in RCEP Implementation: Are Businesses Ready for RCEP’ seminar today.
For Malaysia, he said it is important to position the country on the right path to leverage the benefits of RCEP despite the prevailing global volatility.
“Of course, the war will have some impact on trade but we are not overly exposed to Ukraine because our trade with that country is only about 0.2 per cent, but the impact will be felt in terms of commodity prices because Ukraine is one of the largest suppliers of commodities.
Raja Badrulnizam believed that Malaysia’s trade figures would increase tremendously with the RCEP trade pact coming into force for Malaysia, which will benefit the local small and medium enterprises more.
The RCEP agreement has come into force for Malaysia today, paving the way for the country to integrate into the world’s largest Free Trade Agreement (FTA) that involves 15 countries, with a total population of more than 2.2 billion.
“Even before RCEP, the trade figures for 2021 with FTA countries showed an increase of 25.3 per cent, with exports rising 24.1 per cent while imports grew about 26 per cent,” he explained.
On programmes related to RCEP, he said Matrade would undertake 53 per cent of its trade promotion export programme in RCEP countries throughout this year.
“We see the importance of undertaking programmes for RCEP as the agreement will also provide cross-border investment, besides trade with the Asean and FTA partners,” he said.
Some 14 programmes will be for trade affairs, eight programmes for export-related, five on international sourcing programme to bring buyers from RCEP countries into Malaysia, and two programmes on trade investment mission led by the minister, he said.
“With Malaysia’s coverage growing international now, RCEP agreement would be the catalyst for the country’s trade and investment to grow bigger in post-pandemic recovery.”
He said among the dimensions to pay attention to are some beneficiary sectors such as food and agribusiness, as well as electrical and electronics, trade liberalisation and facilitation, regional investment, and digital economy.
The RCEP was signed among 15 countries on Nov 15, 2020, after going through 31 rounds of negotiations over the past eight years.
The countries are Malaysia, Brunei, Singapore, Vietnam, Cambodia, Indonesia, Laos, Myanmar, the Philippines, Thailand, China, South Korea, Australia, Japan, and New Zealand.
Altogether, the countries account for nearly a third of the global population and world gross domestic product. — Bernama
