Challenges from RCEP for Vietnam’s exports to the Malaysian market
Increasing competitive pressure from other RCEP countries
Besides the promising opportunities, RCEP also poses many challenges for Vietnam’s exports in the Malaysian market, especially from the perspective of competition. The fact that the agreement grants favorable tariff preferences and rules of origin not only to Vietnam but to all RCEP members means that Vietnam is not a “privileged” partner when accessing the Malaysian market. Instead, Vietnamese enterprises must share market opportunities with many other competitors in the region, notably China, Thailand, Indonesia, and the Philippines - countries with similar export structures and strong competitiveness. This makes competition in Malaysia increasingly fierce, requiring Vietnamese enterprises to continuously improve quality, innovate products, optimize costs, and refine market-entry strategies if they want to maintain or expand market share in an environment where tariff conditions are becoming increasingly equal.
Other recurring challenges
In addition to the challenges arising from the expansion of a common trade area under RCEP, Vietnamese exports to Malaysia also frequently face non-tariff measures (NTMs). These are non-tariff regulatory measures applied for legitimate purposes such as protecting public health, food safety, the environment, or national security. In practice, however, NTMs may sometimes be used as informal tools to protect domestic production.
Although Malaysia’s NTMs are not directly related to RCEP, tariff reduction under RCEP may act as a catalyst that prompts the importing country to tighten technical standards, sanitary controls, or inspection procedures, thereby making it harder for Vietnamese goods to access and maintain their position in this market. This is especially important for agricultural products and processed food - areas where Vietnam has strengths but which are highly vulnerable to SPS and TBT measures - as the risk of rejection or strict inspection deserves close attention when exporting to Malaysia.
Source: Center for WTO and International Trade - VCCI
