THE MALAYSIAN Petrochemicals Association (MPA) wishes to reiterate its strong support for the findings of the Cost-and-Benefit Analysis (CBA) conducted on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The findings, published on July 25, 2022 by the International Trade and Industry Ministry (MITI), revealed that the CPTPP would be instrumental in creating a net positive economic gain for Malaysia.
Additions of new production capacities
By 2023, the Malaysian petrochemicals industry would have added another 5.5 mil metric tonnes per annum (30% increase from 18.1 mil MT p.a) of production capacities with the anticipated full running operations of the Pengerang Petrochemicals and Refining Complex.
The new and other existing petrochemical plants would be able to attract foreign direct investments (FDIs) within the downstream sectors of the polymers/plastics/chemicals/derivatives sectors for both local and export markets in the near future.
Opening up of new preferential market access
The CBA identified that the CPTPP offers market access opportunities to countries which Malaysia has no free trade agreements (FTAs) with before.
As more countries are planning to join the grouping, it would enhance wider market penetration opportunities for Malaysian petrochemical producers in the future.
Enable access to wider feedstock sourcing channels
In addition, it could also allow for wider sourcing channels for raw materials at competitive prices for businesses in Malaysia, directly improving Malaysia’s competitiveness and attractiveness as an investment destination.
Facilitate, expedite and promote total regional economic integration
The CPTPP agreement is to facilitate and promote regional economic integration, trade and investment, and MPA is confident that Malaysian producers’ interest is safeguarded extensively through the necessary provisions in the agreement to add advantages in protecting the domestic interests.
Delaying the ratification of the CPTPP would expose risks of being relegated to the sidelines, as a few of our ASEAN neighbours have moved ahead strongly.
Ability to avoid relocation of our downstream exporting industries to other ASEAN countries
Relocation cannot be ruled out and Malaysia might become a less attractive investment destination for investors if CPTPP ratification is not done on a timely basis.
Hence, it is pertinent that the Malaysian exporters must secure preferential access to the growing CPTPP potential new markets.
In conclusion, MPA acknowledges the multiple benefits to be enjoyed by the petrochemical players as highlighted in the findings of the CBA, and wishes to again express our support for the CPTPP ratification. – Aug 18, 2022
Akbar Md Thayoob is Malaysian Petrochemicals Association (MPA) president. Founded in 1997, the MPA represents 26 organisations in the petrochemicals industry and its respective supply chain.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Main photo credit: Pengerang Maritime
