GEORGE TOWN, March 5 — While joining mega trading blocs may be the solution for companies hit by the repercussion of the Covid-19 pandemic, the business community must always adopt a company-centric strategy.
Special investment advisor to the Penang chief minister, Datuk Seri Lee Kah Choon said the Regional Comprehensive Economic Partnership (RCEP), targeted to come into effect in early 2022, is seen as a positive move for a trading nation like Malaysia.
“It is positive to Malaysia at the moment, unless a new trading bloc appears in the future,” he said in a virtual Power Talk session titled “How RCEP Will Impact the Regional and Malaysian Economy”, organised by the Penang Premium Business Enterprise Association (PPBEA).
During this ratification period, Lee said it is critical for companies to prepare and strategically plan on how best to leverage the trade preferences that RCEP would deliver.
Furthermore, he said, companies must identify the areas where trade costs could be reduced and competitive advantages could be gained in the new market with greater access as well as review their current supply chains to determine if there is an opportunity to expand into the region’s growing markets.
Lee said that when curating their medium or long-term plan, businesses should also consider incorporating their companies outside of Malaysia, particularly in countries that already have free trade agreements with nations that Malaysia currently do not have.
“While RCEP can help restore waning domestic and foreign investment, depending on member countries’ quick ratification and implementation, Malaysia will likely be forced to choose if another trading bloc appears.
“Therefore, businesses must make sure the company’s interest is not dictated by the country’s direction,” he said. — Bernama