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Malaysia textile sector's thumbs up to TPP
Jan '16
Ahead of the signing of the Trans Pacifci partnership (TPP), Malaysian textile manufacturers are optimistic that the industry can grow by at least 30 per cent once the agreement comes into effect.

“We are very optimistic, our growth is going to be much more that what is projected by the economists, because we are on the ground, we know. Our capacity utilisation is already very high, so once we build up our capacity, getting orders is not a problem, pricing is not a problem right now, but it will be much better when the TPP is signed,” Malaysian Textile Manufacturers Association (MTMA) president Datuk Seri Tan Thian Poh said.

He said MTMA was involved in the TPP negotiations at various levels, providing industry expectations, reference, technical assistance and support to Malaysia's negotiation team.

“We expect that TPP will bring a new breath of life to the industry. Based on the cost-benefit analysis carried out by the Institute of Strategic and International Studies and PricewaterhouseCoopers, the textile and apparel industry is expected to be the biggest gainer from the TPP,” Tan said at a press conference in Kuala Lumpur after a dialogue on potential economic impact of TPP on Malaysia's textile and apparel industry.

Tan's comments backed Malaysian Knitting Manufacturers Association (MKMA) president Tang Chong Chin, who said he was confident that the textiles and apparel industry would be able to grow at least 30 per cent immediately upon implementation of the TPP.

“As a player in the market, with that kind of elimination of duty, given the Yarn Forward Rule (YFR) and Short Supply List (SSL), we are quite positive to achieve this given the sufficient labour force to support our industry,” Tang said.

Tang also said that once the TPP is implemented, Malaysian export-based manufacturers will see a tariff reduction between 70-90 per cent from the TPP members. The US, which is the largest trading partner of Malaysia, would reduce 73.7 per cent of tariff.

Both Tang and Tan called upon the government to provide sufficient labour force for the industry, to increase capacity. The declaration of support by MTMA and MKMA came barely a week before the Parliament expected to vote for the agreement.

Ministry of International Trade and Industry (MITI) Deputy Secretary-General (Strategy and Monitoring), Datuk J. Jayasiri, said the US procurement sector provided a huge market that was not previously accessible by Malaysia.
He said Malaysian textiles and apparel companies could bid to supply uniforms to the army, hospitals and schools.

But while the MTMA and MKMA have backed the TPP to the hilt, the Malaysian Small and Medium Enterprises Association had said about 30 per cent of small and medium enterprises (SMEs) risk going under once the TPP comes into force in two years as they would have trouble meeting higher labour and environmental standards under the agreement. (SH)

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