TPP to boost M'sia's rubber, palm oil products exports to US, Canada, Mexico, Peru

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KUALA LUMPUR (March 29): Malaysian rubber and palm oil products are expected to command a bigger market share in member countries of the Trans Pacific Partnership (TPP) agreement as a result of the elimination or reduction in import duties, said Plantation Industries and Commodities Minister Datuk Seri Douglas Uggah Embas.

Speaking in Parliament, Uggah said Malaysia's products would gain better access to the TPP countries, especially those that have not signed any free trade agreement with Malaysia like the United States (US), Canada, Mexico and Peru.

These four countries currently impose import duties on Malaysian palm oil products — as high as 18% in the US, 218% in Canada, 20% in Mexico and 9% in Peru.

"The elimination of import duties by the TPP members after the agreement comes into force will expand the market and improve the competitiveness of Malaysia's palm (oil) products to these countries," Uggah said in a written reply to Mukah MP Datuk Seri Dr Muhammad Leo Michael Toyad Abdullah.

He said that in 2014 and 2015, Malaysia saw a decline in its market share of palm oil products exports to the US compared to Indonesia.

Malaysia's market share in Canada, Mexico and Peru can also improve as Indonesia will not be able to enjoy the preferential treatment given to TPP members in the form of import duty elimination or reduction, he added.

Indonesia, the world's largest palm oil producer, is not a participating member of the TPP agreement, which was signed by 12 countries on Feb 4.

Turning to rubber products, Uggah said Malaysia is the world's top exporter, especially in the case of latex based products such as gloves and condoms.

Through the elimination of import duties under the trade pact, Malaysia is expected to take over the market share of non-TPP rubber products manufacturers like China and Thailand, he said.

"Malaysian-made rubber products like gloves will receive a better treatment and be more competitive under the TPP, this will increase the export revenue of the rubber industry.

"In other words, the country's rubber products market is expected to benefit from the access to a bigger market, especially to countries that have not signed any free trade agreement with Malaysia, such as US, Canada, Mexico and Peru," he added.

In 2015, Malaysia's exports of rubber and rubber products amounted to RM25.16 billion, an increase of 6.6% compared to 2014.

"This shows that the rubber industry remains relevant in terms of contribution to the country's income. At present, Malaysia commands a 62% market share for gloves. And with TPP, the rubber industry is expected to grow its market share in member countries," said Uggah.