The Association of Malaysian Medical Industries (AMMI), as the voice of Malaysia’s medical device industry, strongly supports the Ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) by the Government of Malaysia.
On 28 July 2022, over 290 medical device manufacturing companies make up Malaysia’s vibrant medical device industry, undertaking a range of activities – from serving as regional headquarters and manufacturing to research and development. Malaysia is gaining recognition as a world-class medical devices hub and a desirable offshore manufacturing destination for global medical device companies. Ten of the top 30 global medical technology companies have set up manufacturing footprints.
AMMI welcomes the findings of the Cost and Benefit Analysis conducted on the CPTPP, published by the Ministry of International Trade and Industry (MITI) recently. Malaysia stands to gain not only from the elimination of tariffs and reduction of non-tariff barriers but also from the capacity building and technical assistance offered under the Agreement.
Malaysia’s major exports to CPTPP countries include rubber gloves, contact lenses, syringes and needles, as well as surgical instruments. CPTPP countries account for nearly 19% of Malaysia’s medical devices exports. The major export destinations are Japan and Singapore.
Presently, Malaysian exports of medical devices to CPTPP countries face tariffs up to 15.5%, which mostly affect surgical gloves. With CPTPP, these tariffs will be fully eliminated by 2034 across all CPTPP countries.
Additionally, with the ratification of CPTPP, Malaysian medical device exports will be able to access new markets such as Canada, Mexico, and Peru. Of the three countries, Canada and Peru are net importers of medical devices. The market with the largest potential is Canada. In 2019, around 27% of Canada’s medical devices imports were patient aids, surgical gloves and syringes, needles and catheters, all of which are key export products for Malaysia.
Tariff elimination for medical devices by Canada (presently up to 15.5%), Mexico (15%) and Peru (9%) will benefit Malaysian exporters in this sector. For example, Malaysian exporters will be able to export surgical gloves to Canada at 0% tariff, which is now at 15.5%.
CPTPP will enable medical device manufacturers located in Malaysia to further grow their exports to the CPTPP countries. The Malaysian SMEs exporters will benefit from greater market access in ancillary industries. Given the wide and growing range of products manufactured by both MNCs and local companies, this sector supports many other ancillary industries such as rubber – gloves, catheters, condoms; plastics and packaging – intravenous (IV) sets, syringes, procedural kits; electronics – pacemakers, hearing implants, electrocardiogram (ECG) machines; metal – orthopaedics implants, surgical instruments; as well as textiles – surgical gowns, drapes, covers.
CPTPP offers opportunities for the medical device sector to benefit from the Cooperation and Capacity Building Chapter through collaborative programmes and projects, exchange of experts, information and technology, as well as capacity building and technical assistance programmes with leading medical device innovators from other advanced CPTPP countries.
AMMI believes that CPTPP will enable Malaysia to attract more Foreign Direct Investment (FDI) in medical device manufacturing and position Malaysia as the contract manufacturing hub for medical devices in Asia.
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