The Malaysian Plastics Manufacturers Association (MPMA) fully supports the Trans-Pacific Partnership Agreement (TPPA), which will open up wider export market potential for Malaysian plastics manufacturers, enhance employment, and improve our competitiveness.

On a broad basis, the agreement - which will cover nearly 40 percent of the global output - is expected to increase trade and investment activities leading to higher economic growth, as well as promote advanced technologies, raise living standards and enhance environmental protection amongst the 12-member countries which are parties to the TPPA.

The TPPA will be a very important trade partnership for Malaysia.

The recent cost-benefit analysis studies released by the International Trade and Industry Ministry (Miti), namely the National Interest Analysis (NIA) report by the Institute of Strategic and International Studies (Isis), and the ‘Study on Potential Economic Impact of TPPA on the Malaysian Economy and Selected Key Economic Sectors’ report by PricewaterhouseCoopers have shown favourable outcomes.

The studies projected that the TPPA will result in an increase of output for Malaysian products, amongst others, petroleum, chemical, rubber and plastic products. It will also have a positive impact on automotive parts and components as well as the electrical and electronics industries.

The plastics industry is a strong supporting industry to these two sectors by supplying quality parts and components.

Given the relatively small domestic market, the Malaysian plastics industry relies heavily on exports. There are about 1,200 plastics manufacturing companies, employing a total workforce of about 80,000.

Greater export opportunities to America

In 2014, the Malaysian plastics industry registered a total turnover of RM19.37 billion, of which approximately 62 percent of the total plastic finished products manufactured in Malaysia worth RM11.94 billion, were exported.

Traditionally, the European Union, Japan, Australia and Singapore are our main export destinations.

The US was once our major export market but since the withdrawal of the General Scheme of Preferences (GSP) in the late 1990s, our exports to US have declined substantially. With the elimination in import tariff and non-tariff barriers, it will open up greater export opportunities to the US as well as to Canada and Mexico.

The TPPA will give us greater market access and motivate our companies to upgrade their products and services and hence, enhance their competitiveness.

Additionally, the recently announced Special Reinvestment Allowance (SRA) in Budget 2016 will further boost domestic investments in the plastics manufacturing sector.

This is critical as the export market is very competitive, and it is essential that Malaysian plastic products are of consistent high quality and are competitively priced.

In this regard, the SRA will facilitate the investment of machines with higher throughput and efficiency, as well as improved energy efficiency and labour-saving automation features. The SRA is, therefore, timely as it will augur well for our exports given the enlarged market access to the TPPA markets.

Hence, based on the very favourable benefits that the Malaysian plastics industry would enjoy, we are of the considered view that the TPPA will indeed be good for our members in view of the huge market potential.

On that note, we look forward to the government authorities concluding the signing of the TPPA as soon as possible.

LIM KOK BOON is president of the Malaysian Plastics Manufacturers Association (MPMA).