KUALA LUMPUR (Jan 27): The SME Association of Malaysia said the Trans-Pacific Partnership (TPP) agreement could serve as a wake-up call to small medium enterprises (SMEs) to be more competitive and innovative.

The statement is contrary to the association's initial view that close to 30% SMEs would be "wiped out" due to the TPP agreement.

"In midst of strong objection from the public on joining the TPP, we think this is a right move and it will certainly allow the public to be more aware of the possible impact of the TPP agreement on the Malaysian economy," said its national president Michael Kang Hua Keong in a statement today.

"As an association that represents the SME community in Malaysia, we take a positive view that the TPP agreement would serve as a wake-up call to SMEs — it is time to take initiative and transform ourselves into a competitive and innovative enterprise, both locally as well as globally," he added.

He said Malaysian SMEs must embrace changes that are taking place in the business world.

"There is strong urgency for a change in the mindset of Malaysian SMEs. We can no longer satisfy with what we have achieved in the domestic market. As the local market is shrinking, SMEs have to expand into the global market," he said.

In November last year, Kang was quoted by the media as saying that at least 30% of SMEs will "disappear" when the TPP agreement comes into full force in two years.

Today, he said the association is ready to take up the challenges of the TPP agreement and work closely with the government and relevant authorities to assist Malaysian SMEs to transform into world-class enterprises.

He also said that the government should assist SMEs in moving up the global supply chain and in capacity building to minimise the possible adverse impact.