KUALA LUMPUR: Malaysia's economy can expand by another 0.8 per cent and 1.7 per cent while exports can grow by 24.4 per cent over the medium to long terms if it joins the Regional Comprehensive Economic Partnership, said Socio Economic Research Centre Malaysia (SERC).
The forecasts would be underpinned by the trade, investment and services expansion between Malaysia and the 14 RCEP members, SERC executive director Lee Heng Guie said.
"Malaysia's trade with RCEP members accounted for 58 per cent of total trade in 2020, of which exports made up 56.7 per cent of the total.
"This presents a big opportunity for Malaysian companies. Hence, it is important for us (Malaysia) to ratify RCEP as soon as possible, as it will send a strong signal to the international committee that Malaysian government is serious to open for business, increase trade and attract both domestic and foreign investments," he said during the panellist discussion at Asean-BAC Malaysia Webinar 2021 on "RCEP and CPTPP as Game-Changers in Asean Post Covid-19 Economic Recovery" here yesterday.
Lee said Malaysia should reposition itself as an attractive and competitive place of doing business in the region and the preferred gateway to access the whole market of RCEP and other regions.
"This will help to attract quality investment while retaining domestic investment and foreign direct investment. The sooner we enforce the RCEP, the sooner domestic and foreign businesses can enjoy the benefit of RCEP from a wider trade investment utilisation," he added.
SERC is hopeful that the government and relevant agencies will work with chambers of commerce and industry players after the ratification to promote the potential benefits of RCEP on domestic players especially SMEs, which contribute 98.4 per cent to Malaysia's total manufacturing establishment.
"We hope government agencies can continue to enhance domestic policy, trade facilitation, product and market to strengthen their ability to penetrate a bigger RCEP market," he said.
Lee said RCEP would be the world's largest trade agreement and a big game changer to spur global trade and investment post-Covid-19 global recovery.
With a market size of about 28.2 per cent of the global GDP, 27.2 per cent of global trade and 29.5 per cent of the world's population, RCEP presents enormous investment trade and services opportunity for Malaysia and its members.
"Malaysia is ranked seventh largest trading partner with RCEP members with a total trade between Malaysia and the 14 countries accounting for 57 per cent (exports) and close to 60 per cent of imports."
Currently, there are only two Asean countries - Singapore and Thailand - out of the 10 Asean countries that had ratified the RCEP, followed by non-Asean countries - China and Japan.
"We need six Asean and three non-Asean countries to ratify the RCEP agreement, which then can enter into force in 60 days. All signatories to the RCEP have made clear that they will strive to complete ratification within the year to expedite its enactment by January 1, 2022," he said.
Lee said given 92 per cent of the tariff lines would be reduced over 20 years, RCEP would offer better market access for Malaysia and attract high-quality investments.
Malaysia-India Business Council Honorary Secretary Datuk K. Surendran Kutty Krishnan said ratification of RCEP might require some amendments to several domestic laws and regulations.
"This includes reforming domestic economic policy in compliance with the requirement of this agreement. The timely implementation of both RCEP and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) will enable Malaysia to become more integrated into the growing regional and global supply value chain.
"It also provides impetus to attract foreign direct investment - high quality and high-wage employment," he added.