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TPP Presents New Opportunities for U.S. Trade with Malaysia

June 17, 2016

Catherine Spillman is a career foreign service officer with the U.S. Commercial Service. She currently serves as the Counselor for Commercial Affairs at the U.S. Embassy in Kuala Lumpur. Colette Morgan is an International Trade Specialist with the Office of ASEAN and the Pacific Basin, where she covers Malaysia and Brunei. She is based in Washington, D.C.

Greetings from Malaysia!  Malaysia, alongside 11 other countries, is a signatory of the Trans-Pacific Partnership (TPP) Agreement. The TPP will establish the first-ever preferential trade agreement between Malaysia and the United States.   Malaysia and the United States already have a robust trade relationship; the U.S. exported $12.3 billion in goods to Malaysia in 2015, while U.S. exports of services to Malaysia were estimated at $2.9 billion in 2014. The TPP will help to broaden and deepen our trade ties.

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Malaysia, alongside 11 other countries, is a signatory of the Trans-Pacific Partnership (TPP) Agreement.

The landmark agreement presents increased opportunities for both American and Malaysian workers and businesses. When TPP takes effect, American companies exporting to Malaysia will benefit from duty free access for 95 percent of industrial goods. For example, Malaysia will eliminate tariffs on 74 percent of U.S. exports of automotive goods immediately, including Malaysia’s 30 percent foreign tax on autos. In addition to tariff elimination, the TPP also levels the playing field for American workers and businesses by establishing the rules of the road for trade among the 12 TPP countries. The rules and high standards set forth in the TPP will make it easier for U.S. companies to sell their Made-in-America goods and services abroad. These rules include provisions that promote competition and protect intellectual property rights, and establish strong labor and environmental standards, among other things. For example, the TPP marks the first government procurement commitments made by Malaysia with the United States. These commitments will help to ensure that U.S. companies are not discriminated against when bidding for covered government procurement tenders. For more information on U.S. export opportunities under the TPP, please see our Malaysia TPP report and look up tariff information under the TPP by utilizing the FTA Tariff Tool.

Malaysia is also poised to gain from the TPP. Malaysian exporters and SMEs will benefit from preferential access to new FTA markets, including the United States, Canada, Mexico, and Peru. Regionally, Malaysian exporters will gain a competitive advantage over non-TPP competitors in exporting products such as electrical goods and electronics, chemical products, palm oil products, rubber products, wood products, textiles, and automotive parts and components.

The TPP will build upon our current trade relationship to support a wealth of opportunities with Malaysia, the second largest economy in ASEAN. The Department of Commerce is ready to help connect U.S. exporters and Malaysian importers and to assist U.S. exporters with their entry or expansion into the Malaysian market.

Have questions about the opportunities in Malaysia for your U.S. product or service?  Please feel free to reach out to us. Our team of experts will be happy to provide you with feedback and assistance. And, don’t forget about your local U.S. Export Assistance Center, which stands ready to help you access our services — not only in Malaysia, but in other our other TPP markets and countries around the world!

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