TPPA will boost exports for plastics manufacturers, says Malaysian association


Malaysia, which has had opposing opinions on whether or not the Trans-Pacific Partnership Agreement (TPPA) will give rise to a positive outcome for the country, against the opportunity to access larger markets, is expected to benefit from TPPA, according to the Malaysian Plastics Manufacturers Association (MPMA).

The association says it fully supports TPPA as it will open up wider export market potential for Malaysian plastics manufacturers, enhance employment, and improve competitiveness.

The TPPA creates a free market among the 12 member countries comprising Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

Lim Kok Boon, President of MPMA, said, “The TPPA will be a very important trade partnership for Malaysia.”

He added that recent cost-benefit analysis studies released by the International Trade and Industry Ministry (Miti), namely the National Interest Analysis (NIA) report by the Institute of Strategic and International Studies (Isis), and the ‘Study on Potential Economic Impact of TPPA on the Malaysian Economy and Selected Key Economic Sectors’ report by PricewaterhouseCoopers have shown favourable outcomes.

The studies projected that the TPPA will result in an increase of output for Malaysian products, amongst others, petroleum, chemical, rubber and plastic products. It will also have a positive impact on automotive parts and components as well as the electrical and electronics industries.

Given the relatively small domestic market, the Malaysian plastics industry relies heavily on exports. There are about 1,200 plastics manufacturing companies, employing a total workforce of about 80,000.

MPMA also believes that TPPA is expected to boost higher exports to the US.

In 2014, the Malaysian plastics industry registered a total turnover of RM19.37 billion, of which approximately 62% of the total plastic finished products manufactured in Malaysia worth RM11.94 billion, were exported.

Traditionally, the European Union, Japan, Australia and Singapore are Malaysia’s main export destinations, with exports to US flagging since the withdrawal of the General Scheme of Preferences (GSP) in the late 1990s.

“With the elimination in import tariff and non-tariff barriers, it will open up greater export opportunities to the US as well as to Canada and Mexico,” said Lim.

Additionally, the recently announced Special Reinvestment Allowance (SRA) in the country’s budget 2016 will further boost domestic investments in the plastics manufacturing sector, according to Lim.

“This is critical as the export market is very competitive, and it is essential that Malaysian plastic products are of consistent high quality and are competitively priced.”

In this regard, the SRA will facilitate the investment of machines with higher throughput and efficiency, as well as improved energy efficiency and labour-saving automation features. The SRA is, therefore, timely as it will augur well for our exports given the enlarged market access to the TPPA markets, adds Lim.

“Hence, based on the very favourable benefits that the Malaysian plastics industry would enjoy, we are of the considered view that the TPPA will indeed be good for our members in view of the huge market potential.”

Lim said given all the above advantages, MPMA looks forward to the government authorities concluding the signing of the TPPA as soon as possible.


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