TPPA Creates Spin-Off Effects, New Industries

By Farhana Poniman KUALA LUMPUR, Feb 11 (Bernama) -- The signing of the Trans-Pacific Partnership Agreement (TPPA) will not only provide greater market access for exporters, but potentially create spin-off effects such as the creation of new industries. Malaysia-based batik manufacturer Cliff Ink Sdn Bhd Managing Director Michelle Lau Sook Yee said industry players could collaborate with the Malaysia External Trade Development Corporation (MATRADE) and Malaysian Investment Development Authority (MIDA) to attract investments from TPPA countries to set up factories here. "The investments will give us (the textile industry) an advantage from the technological point of view because this industry is a very capital-intensive. "We need high technology for weaving whereby Malaysia currently does not have raw materials such as cotton and silk ... maybe we can look into cotton and silk farming, therefore creating an entirely new industry," she told Bernama. Echoing a similar sentiment, MATRADE Lifestyle Director of Trade and Services Promotion Division Abu Bakar Yusof said it was important for Malaysia to develop a complete ecosystem of the textile industry incorporating both the upstream and downstream segments. "We hope the TPPA will be able to pull more investments into this industry and help local players," he added. Lau also believed that non-TPPA signatories, China and India, which are world leaders in garments exports, would take advantage of the mega trade pact by investing in Malaysia. She said although Vietnam was strong in this industry with its own raw materials, Malaysia had the upper hand in terms of access to capital given MATRADE and MIDA's relentless effort to bring investments into the country. Cliff Ink's manufacturing base in Batu Caves, state of Selangor can produce up to 2,000 meters of batik a month which it mainly exported to Europe. When asked whether small-and-medium enterprises can handle the heightened competition post-TPPA, Lau said companies must identify their competitive strengths and know how to position themselves. "If they cannot compete in the quantity front, they can compete in creating higher quality goods. "Yes, competition is not good for domestic markets, however, competition is important because it is the catalyst for innovation," she added. MATRADE is the national trade promotion agency while MIDA is the government's principal agency for the promotion of the manufacturing and services sectors in Malaysia. --BERNAMA