Taiwan in CPTPP will also be a boon for Malaysia: Rep
PETALING JAYA: Tariff reduction under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is likely to bring the greatest benefit of trade liberalization between Malaysia and Taiwan, as there is currently no preferential trade agreement. between Malaysia and Taiwan, which is an obstacle to reducing the cost of goods, according to Anne Hung, representative of the Taipei Economic and Cultural Office in Malaysia (Photo).
Taiwan submitted its application for CPTPP membership on September 22, 2021 to the New Zealand government, which takes care of the paperwork.
âThe CPTPP’s provisions aimed at reducing and harmonizing non-tariff measures and customs facilitation will reduce the cost of trade in sectors important to Taiwan and Malaysia, including the manufacturing sector. Other provisions aim to facilitate trade in services and address other broader dimensions of trade such as competition, contribute to deepening economic relations in the future while having a lower impact in the immediate future. Hung told SunBiz.
Taiwan has applied to join the CPTPP under the name it uses at the World Trade Organization (WTO) – the separate customs territory of Taiwan, Penghu, Kinmen and Matsu.
âApplying for CPTPP membership is an important economic and trade policy that the Taiwanese government has been working on since 2016. Taiwan is monitoring the progress of the pact while preparing for CPTPP membership. Our government is working to make sure it is ready for membership; for example, we have adjusted the existing regulatory system to the same level as that specified in the CPTPP by reviewing and amending rules and regulations.
âTaiwan has done considerable preparatory work for membership over the past five years and our government agencies have communicated with national interest groups and stakeholders; thus, we obtained high level internal support to join the CPTPP. We have engaged in informal consultations and discussions with member countries. We are ready because we have amended all laws and obtained domestic support and consulted member countries informally to gain their support. We believe the time has come to submit the nomination.
She said Taiwan was very interested in joining CPTPP’s predecessor, the Trans-Pacific Partnership, which was signed in February 2016, with the United States as the main promoter, but never came into effect because Washington s ‘was withdrawn from the agreement in 2017.
Hung said joining the CPTPP is a long process and it means reaching consensus with existing members.
She said the next step for Taiwan is to consult with current members of the pact and address their bilateral concerns one by one until the CPTPP ministerial meeting for a consensus process to reach agreement on the request for Taiwan accession.
âA membership working group will be formed to start bilateral negotiations with member countries and the last step will be the ministerial meeting on the results of the negotiations and then finalization of the procedure. The negotiations will take from several months to several years and will usually end when all issues are resolved between member countries. The Taiwanese government will try to speed up the process. Since Taiwan’s laws and regulations have been changed, when our membership is accepted by all members, we will complete ratification by our parliament very soon.
âTaiwan enjoys great economic freedom and we rank sixth in the US Heritage Foundation’s 2021 Economic Freedom Index. As a member of the WTO since 2003, Taiwan has duly respected its rules and regulations and fulfilled its commitments. We have no compliance issues. Therefore, we are confident that the negotiations with CPTPP members will go smoothly when they start and that the negotiations will be based on the terms of mutual economic interests, âsaid Hung.
Taiwan has always been among Malaysia’s top 10 trading partners from 1995 to 2020. According to statistics from Malaysia External Trade Development Corp (Matrade), Taiwan is Malaysia’s fifth largest trading partner and bilateral trade volume in 2020 reached 22 billion US dollars (93.1 billion RM), despite the impact of the Covid-19 pandemic.
âThere are over 1,700 Taiwanese companies operating in Malaysia. Commercial relations are supported by strong industrial collaboration enabled by Taiwanese investments in Malaysia. Taiwanese companies have made cumulative investments amounting to US $ 13.8 billion in Malaysia, making it the eighth FDI in Malaysia.
Hung cited research by the local Institute for Democracy and Economic Affairs (Ideas) think tank on Taiwan joining the CPTPP that will increase Malaysia’s gross domestic product by 0.15% due to increased trade. on both sides.
This will boost employment (in Malaysia) where 20,000 jobs will be created. Taiwan’s membership in the CPTPP will also boost Malaysia’s manufactured exports, imports and overall production, reflecting a strengthening of industrial ties already in place.
âTaiwan is a strong partner in supporting and facilitating the transition of Malaysia’s Fourth Industrial Revolution (IR 4.0). Taiwan is one of the essential leaders in IR 4.0 technologies, it will be a strong partner for Malaysia in sectors focused on IR 4.0 such as big data, augmented reality, IoT, cybersecurity and others. Compared to the current CPTPP members, Taiwan is the largest contributor of intermediate goods and equipment in sectors focused on RI 4.0. It is the largest contributor for electronics and the third largest for chemicals and machinery.
“If Malaysia ratifies the CPTPP and Taiwan adheres to the trade pact, the sectors focused on RI 4.0 will become more efficient as Malaysian companies will have access to Taiwan’s export markets,” she said.
Regarding the impact of the trade war between the United States and China, Hung said that uncertainties caused by the trade dispute had resulted in an influx of Taiwanese companies with investments in China returning to the island since 2017.
âWe expect this return of investment trend to continue and it has continually resulted in tangible investments in Taiwan and a primary source of funding for our innovative industries. The Taiwanese government has designed major investment programs to give companies greater confidence to invest in Taiwan since 2019 to welcome Taiwanese companies abroad to return to invest in Taiwan.
âAs of September 24, applications from 224 companies returning from China have been approved by Taiwan. They are mostly in the ICT industry, which has attracted $ 30.8 billion in investment and is believed to create 70,630 jobs (in Taiwan). Of the returns to date, the biggest investment comes from TV and flat panel computer maker Innolux Corp, âshe said.
Regarding the impact of the Covid-19 pandemic, Hung said a new global supply chain has gradually formed.
âTaiwan’s high-tech sector, especially the semiconductor industry, is a critical part of global supply chains. The global shortage of chips in sectors from automotive to consumer electronics has boosted demand from semiconductor producers in Taiwan and they are rapidly increasing their capacities. Nineteen high-tech products manufactured by Taiwanese companies at home and abroad have ranked first in the world market.
âTaiwan saw its international trade increase to US $ 631.3 billion in 2020 from US $ 614.8 billion in 2019. Taiwan has a trade surplus of US $ 58.79 billion in 2020, one of the 20 countries with the highest trade surplus in the world. Taiwan’s high-tech exports have remained strong since the Covid-19 outbreak due to an increase in distance work and study around the world.
âOur exports continue to grow due to the growing demand for electronic components for 5G and the demands of working from home. Taiwan recorded positive growth totaling 3.11% of its economy in 2020, which is the highest in the world, thanks to effective control of Covid-19. This year, Taiwan’s economy continues to thrive despite the impact of the pandemic. Its growth in the first half of 2021 reached 8.34%, âsaid Hung.