Joint efforts to take RCEP opportunities

Rice paper production at Tan Nhien Co., Ltd in Tay Ninh Province’s Hoa Thanh Town

Malaysia ratified the RCEP on January 17, 2022. The agreement is expected to facilitate the country’s deeper integration into global free trade and investment, as it will eliminate 90 percent of tariffs among 15 East Asian and Pacific countries and helps improve the business environment through regulations related to intellectual property protection, government procurement and e-commerce.

Tengku Zafrul Tengku Abdul Aziz, Malaysian Minister of Investment, Trade and Industry, assessed that the RCEP implementation allows Vietnam and Malaysia to establish a modern, comprehensive, leading and mutually beneficial economic alliance. RCEP is opening up opportunities for bilateral cooperation in the fields of real estate, food and beverages, Halal products, and construction and building materials, the minister said.

RCEP is having a positive impact on the bilateral trade. Malaysia has become the second biggest ASEAN (Association of Southeast Asian Nations) and the nine largest world trade partner of Vietnam, while Vietnam has become the 12^th biggest world trade partner and the fourth largest ASEAN trade partner of Malaysia, after Singapore, Indonesia and Thailand.

As of the end of 2022, Malaysia was the fourth largest foreign investor in Vietnam.

The presence of Vietnamese products (chemicals, computers, phone components, cattle feed and raw materials, clinker and cement, footwear, and vegetables and fruits) in Malaysia has increased. Le Phu Cuong, Commercial Counselor, Vietnam Trade Office in Malaysia, said the Malaysian market offers many opportunities for Vietnamese goods, as it has a high purchasing power, diverse needs and consumption similarities with Vietnam. Moreover, the Malaysian market’s openness is large and Vietnamese exports to this market confront relatively low technical barriers because both countries join many free trade agreements (FTAs) within the framework of ASEAN, ASEAN+, CPTPP (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership), and RCEP. Malaysia is lacking domestic supplies of many essential foods such as rice and seafood, he added.

With Muslims accounting for 65 percent of its population, according to the Vietnam Trade Office in Malaysia, this country is promoting the application of Halal standards to imported food. Apart from meeting Halal standards, Vietnamese exporters to Malaysia have to compete fiercely with their counterparts from China, Thailand, Indonesia and other countries and territories.

Cuong recommended Vietnamese businesses to strengthen direct trade promotion in Malaysia and verify partners.