Malaysia Should Serve Consumers In TPPA Signatory Nations, Says MITI Secretary General

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Malaysia Should Serve Consumers In TPPA Signatory Nations, Says MITI Secretary General

Malaysia’s Ministry International Trade and Industry (MITI) Secretary-General Datuk J Jayasiri said that the nation must capitalise on the ‘yarn-forward’ rule of origin to serve the needs of textile and garment makers, as well as consumers among Trans-Pacific Partnership Agreement (TPPA) signatory countries.

He made the statement on the sidelines of a three-day seminar on ‘Unboxing TPPA for Business Strategy for the Textile and Apparel Industry’ organised by the Malaysian Textile Manufacturers Association in Kuala Lumpur recently.

He said that the ‘yarn-forward’ rule stipulates that all fabrics used in a garment should be made from yarn produced by TPP member states to qualify for the trade agreement's duty-free status.

"TPPA members are required to source the input from members, creating investment opportunities to manufacture inputs. In fact, before the agreement comes into effect, we have already seen foreign investors coming in since they find Malaysia a better choice to produce input supply to this market," he said, adding that local producers are also expanding operations in manufacturing ‘yarn forward’ items.

He said that presently Malaysia's exports of textiles to the TPPA market stood at Malaysian Ringgit 5.3 billion and this is expected to grow significantly in two years' time when the trade pact comes into effect.

The industry offered a wide range of opportunities and Malaysia could make a mark in manufacturing synthetics-based products and high-end garments, which are high value-added products, which the country ought to promote.

Since TPPA specified a provision of short supply list, providing an exception for TPPA member states to buy raw materials from non-members, Malaysia would benefit from it to a certain extent, he said.

"Industry players must aim to be more innovative, productivity-driven and cost competitive in order to take advantage of the opportunities under the TPPA," he said.

Speaking about the opposition to TPPA by US presidential candidates, he said that Malaysia was notified recently that the US administration is working hard to push the trade deal through the Congress.

He said that there are indications that US President Barrack Obama could table the TPPA Bill in the Congress even before the new president is inaugurated and if it is approved, the new president would have to implement the decision.

"The US ratification and participation in the agreement are important as it carries 85 per cent of gross domestic product (GDP) among the 12 member countries. All member countries must ratify within 24 months of the signing and if that does not happen, the next condition is that at least six countries, accounting for 85 per cent of (total) GDP, could still bring the agreement into force," he said.