Solutions to take advantage of specific RCEP commitments

Market-opening commitments under RCEP offer many potential opportunities for Vietnamese enterprises exporting goods to Malaysia. However, to turn these opportunities into real benefits, enterprises need to proactively study and understand the commitments under RCEP:

- Understand the tariff commitments that Malaysia grants to Vietnam in the common tariff schedule under Annex I of the RCEP Agreement

However, it should be noted that the preferential tariff commitments in Malaysia’s RCEP tariff schedule represent the minimum level of liberalization. In practice, Malaysia may liberalize earlier (reduce or eliminate tariffs) than scheduled in its commitments. Therefore, to know the exact preferential tariff rate that Malaysia applies to each Vietnamese product, businesses need to review the annual RCEP preferential tariff rates that Malaysia applies to Vietnam. Businesses can check Malaysia’s tariff rates under the FTAs (including RCEP) at the following link: https://ezhs.customs.gov.my/.

- Understand the rules of origin and origin certification procedures for obtaining RCEP tariff preferences in Chapter 3 – Rules of Origin of the Agreement. In addition, Vietnam has also incorporated the RCEP rules of origin into domestic law in Circular No. 05/2022/TT-BCT dated 18/02/2022 (amended and supplemented by Circular No. 32/2022/TT-BCT), which provides rules of origin for goods under RCEP.

- Understand other related matters such as Customs Procedures and Trade Facilitation (Chapter 4), SPS Measures (Chapter 5), TBT (Chapter 6), and Trade Remedies (Chapter 7), so as to clearly grasp the rules, protect rights and interests, and prevent risks when exporting goods to Malaysia under this agreement.

Technical and market solutions

Although RCEP brings significant advantages in terms of tariffs and rules of origin, effective access to the Malaysian market still depends largely on the practical ability of Vietnamese enterprises to adapt to the technical requirements and consumption characteristics of the local market. Malaysia maintains a strict legal framework on quality control, food safety, labeling, and especially Halal certification - a mandatory factor for many consumer product groups in a country where more than 60% of the population is Muslim.

In addition, the Malaysian market has diverse consumption characteristics, with a mix of ethnic communities (Malay, Chinese, Indian, etc.) and relatively distinct income segmentation. This requires Vietnamese enterprises to be flexible in product design, pricing, and brand positioning. Cultural and religious factors must also be taken into account, especially for food, beverages, and cosmetics - areas that require strict compliance with Halal certification.

To tap this market effectively, businesses need to study the consumption preferences of different population groups while keeping up with modern shopping trends, in which modern retail channels, e-commerce, and social media are playing an increasingly important role in consumer behavior in Malaysia. Cooperating with local distributors or popular e-commerce platforms such as Shopee, Lazada, and PG Mall will be a fast and effective approach.

Solutions to improve competitiveness

In the long term, product competitiveness is the key factor for maintaining and expanding market share in Malaysia, regardless of the preferences offered by RCEP. Enterprises need to focus on investing in technological innovation, improving product quality, applying international standards in production and packaging, and developing higher value-added products.

At the same time, human resource upgrading, especially in market research, product development, and logistics, also needs attention. Malaysia is a competitive market and consumers have many choices, so Vietnamese products need to stand out in terms of quality, uniqueness, or reasonable pricing in order to attract and retain buyers.

At the same time, enterprises need to build and promote their brands systematically, use digital communication tools effectively, participate in specialized trade fairs in Malaysia, and join trade promotion programs organized by competent authorities.

Seek information and support from the government, trade promotion agencies, and industry associations

In the context of increasingly deep integration, especially with the implementation of trade agreements such as RCEP, support activities from the Government, industry associations, and trade promotion organizations play a key role in improving enterprises’ export capacity. To maximize the opportunities offered by RCEP, Vietnamese exporters need to proactively participate in programs disseminating the agreement’s commitments, especially regulations related to rules of origin - the core factor for obtaining preferential tariffs.

In addition, enterprises should actively participate in trade connection activities with Malaysian importers as well as trade promotion programs, fairs, and exhibitions to promote products and enhance brand presence in this market. Proactively identifying and participating in support activities will help businesses not only expand markets but also improve their ability to adapt to increasingly stringent technical and commercial requirements in the region.

Source: Center for WTO and International Trade - VCCI

• Malaysia’s tariff commitments for imported goods under RCEP
• Malaysia’s goods origin certification mechanism under RCEP
• Malaysia’s services market opening commitments under RCEP
• Opportunities from RCEP for Vietnam’s goods exports to the Malaysian market
• Challenges from RCEP for Vietnam’s exports to the Malaysian market