TPPA holds promise of growing textile industry

The Malaysian textile industry is far from being a sunset industry as the Trans-Pacific Partnership Agreement (TPPA) holds promise of growing investment.

International Trade and Industry Ministry (MITI) secretary-general Datuk J.Jayasiri said Malaysia could capitalise on the yarn-forward rule of origin and serve the needs of textile and garment makers, as well as consumers among the signatory countries.

The "yarn-forward" rule stipulates all fabrics produced in a garment from yarn made by TPP member states qualify for the trade agreement's duty-free status.

"TPPA members are required to source the input from members, creating investment opportunities to manufacture the inputs.

"In fact, before the agreement comes into effect, we have already seen (foreign) investors coming in as they find Malaysia a better choice to produce input supply to this market," he said, adding that local producers were also expanding operations in manufacturing yarn forward items.

He was speaking to Bernama and TV3 on the sidelines of a three-day seminar themed "Unboxing TPPA for Business Strategy for the Textile and Apparel Industry" organised by the Malaysian Textile Manufacturers Association here, today.

Jayasiri said the industry offered wide range of opportunities and Malaysia could grab hold of the manufacturing of synthetics-based products and high-end garments, which were high value-added products, that the country needed to promote.

He said as the agreement specified a provision of short supply list, providing an exception for TPPA member states to buy raw materials from non-members, Malaysia would benefit from it to a certain extent.

"Industry players must aim to be more innovative, productivity-driven and cost competitive in order to take advantage of the opportunities under the TPPA," he added.

He said Malaysia's current exports of textiles to the TPPA market stood at RM5.3 billion and they were expected to grow significantly in two years' time when the trade pact came into force.

On the opposition to the TPPA by US presidential candidates, he said Malaysia was notified recently that the US Administration was working hard to push the trade deal through the Congress.

It is said that US President Barrack Obama could table the TPPA Bill to the Congress even before the new president is inaugurated and if it is approved the new president will have to carry the decision through, Jayasiri said.

"The US ratification and participation in the agreement are important as it carries 85 percent of gross domestic product (GDP) among the 12 member countries.

"All member countries must ratify within 24 months off the signing and if that does not happen, the next condition is that at least six countries, accounting for 85 percent of (total) GDP, could still bring the agreement into force," he added. -- Bernama