TPPA can help Malaysia create new industries

With Malaysia signing the Trans Pacific Partnership Agreement (TPPA), the textile industry players can now 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, said Batik manufacturer Cliff Ink Sdn Bhd Managing Director Michelle Lau Sook Yee.

TPPA will not only provide greater market access for exporters, but potentially create spin-off effects such as the creation of new industries.

The investments will give the textile industry an advantage from the technological point of view because this industry is a very capital-intensive.

Malaysia currently does not have raw materials such as cotton and silk, with the signing of TPPA they can now start looking into cotton and silk farming, therefore creating an entirely new industry. They will also need high technology for weaving.

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 that 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 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 that 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. She added saying that competition is not good for domestic markets, however, competition is important because it is the catalyst for innovation.

Echoing a similar sentiment, Matrade Lifestyle Director of Trade and Services Promotion Division Abu Bakar Yusof said that it was important for

Malaysia to develop a complete ecosystem of the textile industry incorporating both the upstream and downstream segments. They hope the TPPA will be able to pull more investments into this industry and help local players.