Trade flows between Malaysia and the UK, currently at MYR 32.3 billion (USD 7.1 billion) are expected to grow in 2023 as a consequence of the latter’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the largest free trade areas in the world, accounting for over a fifth of global GDP in 2021.
Malaysia and the UK currently do not have a bilateral agreement in place. According to the British Malaysia Chamber of Commerce (BMCC), the UK’s accession to the CPTPP will grant Malaysia expanded preferential access to the UK market.
The CPTPP will reduce tariffs and other trade barriers, making it easier and more cost-effective for the UK to import goods and services from Malaysia, such as palm oil, cocoa, rubber, electrical and electronics, as well as chemicals.
At present, Malaysia imports more from the UK than it exports. As of the end of the third quarter of 2022, Malaysia ranked as the UK’s 43rd largest trading partner. Leading UK exports to Malaysia include cars, inorganic chemicals, mechanical power generators, and miscellaneous electrical goods, as well as pulp and waste paper. Conversely, the most important UK imports from Malaysia are clothing, miscellaneous electrical goods, refined oil, mechanical power generators, and aircraft.
The CPTPP also includes provisions promoting economic cooperation and innovation, and it covers areas such as intellectual property, eCommerce and government procurement, which could help improve Malaysia’s competitiveness and attract more foreign direct investment.
(Source: The Star)