Chile will formally join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership on 21 February 2023, giving Malaysian exporters immediate tariff relief on goods shipped to the South American nation, Malaysia’s Minister of International Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz confirmed on 12 January 2023.
Chile locks in CPTPP entry
Santiago deposited its ratification instrument in December 2022, the final domestic step required before the pact enters into force for Chile. The move brings the 11-member trade bloc to full strength across the Pacific rim, linking economies that together account for roughly 13 percent of global GDP. For Chile, the timing is meant to lock in market-opening gains before any broader regional initiatives can dilute preferences already secured. Officials in Santiago expect the agreement to add 0.3 percentage points to annual GDP growth by widening access for copper, fruit, wine and forestry products.
Kuala Lumpur views the expansion as a two-way street. “Chile’s ratification means Malaysian firms will enjoy lower tariff rates on exports ranging from palm oil and rubber products to electrical and electronic goods,” Tengku Zafrul wrote on Twitter. He added that Malaysian importers will pay less for Chilean copper concentrate, fresh grapes and seafood, ingredients vital to the country’s electrical and food-processing sectors.
Malaysian firms eye copper and fruit chains
Chile is already Malaysia’s third-largest trading partner in Latin America, with two-way trade valued at USD 525 million in 2022. Palm oil and refined petroleum made up the bulk of Malaysia’s shipments westward, while Chile sent mostly copper cathodes and fresh fruit. CPTPP will eliminate the 6 percent tariff Malaysia imposes on Chilean copper concentrate within five years and scrap the 5 percent duty on grapes and berries immediately. In return, Chile will drop its 6 percent tariff on Malaysian palm oil and derivatives as soon as the agreement takes effect.
The Ministry of International Trade and Industry calculates the savings could lift bilateral trade above USD 700 million by 2025. “Our electronics cluster is especially eager,” said Tan Sri Soh Thian Lai, president of the Federation of Malaysian Manufacturers. “Chilean copper is critical for wire harnesses used in data-centre servers, and every percentage point shaved off input costs helps us compete with Chinese and Korean suppliers.”
Smaller exporters see upside too. Halal-certified canned sardine producers in Penang currently face a 10 percent Chilean tariff that will fall to zero within three years. “We have already booked space at the Santiago Food Expo in April to test consumer reaction,” said Nurul Hidayah Ahmad, export manager at Gulf Pacific Canning. “If volumes pick up, we can add a second shift at our Prai plant.”
Rules of origin open regional doors
Because CPTPP allows cumulation of origin, Malaysian components that meet the pact’s 45 percent regional-value threshold can qualify for preferential treatment when re-exported from another member state. A Kuala Lumpur-based semiconductor firm that ships wafers to Mexico for final assembly can therefore enter Chile duty-free even if the finished product is invoiced from Guadalajara. “This diagonal cumulation is a quiet but powerful feature,” noted Jayant Menon, visiting senior fellow at the ISEAS-Yusof Ishak Institute. “It encourages supply-chain dispersion within the bloc and gives Malaysian intermediate goods a leg up over rivals in China or India that sit outside the agreement.”
Chilean officials are pitching the same logic in reverse. “Malaysian investors can use Chile as a platform for the wider Latin market,” said Chile’s deputy trade minister Claudia Sanhueza during a virtual briefing on 11 January. “Goods produced in Chile with Malaysian inputs gain preferential access to Mexico and Peru through existing bilateral pacts, and we hope to see joint ventures in lithium processing and food packaging.”
Democrats slow US return, opening space for others
Washington helped design the original Trans-Pacific Partnership but pulled out in 2017. President Trump has not reopened talks, citing a preference for bilateral deals that protect American workers. The absence of the world’s largest economy leaves a vacuum that Malaysia and Chile are happy to fill. “Every month the United States stays on the sidelines, Asian and Latin exporters deepen integration,” said Tengku Zafrul in a follow-up interview with Bernama. “When US firms return, they will find supply chains already optimised around CPTPP rules.”
Democratic lawmakers have urged the Biden administration to negotiate re-entry, yet party progressives argue the pact’s investor-state dispute clauses could undermine labour and environmental standards. The standstill effectively guarantees Malaysian exporters preferential access to Chile and other CPTPP markets for at least the medium term.
Implementation timeline and next steps
Malaysian customs will publish the updated tariff schedule on 15 February, four days before the agreement takes effect for Chile. Exporters must obtain CPTPP origin certificates from the Ministry of International Trade and Industry or authorised bodies such as the Federation of Malaysian Manufacturers. Digital certificates will be accepted, eliminating the need for embassy legalization. Chilean customs, meanwhile, will recognise self-certification by approved manufacturers, speeding clearance at ValparaÃso and San Antonio ports.
Both governments plan a joint virtual seminar on 28 February to walk firms through documentation requirements. Officials expect at least 200 Malaysian small and medium enterprises to attend. “The paperwork is straightforward if you prepare early,” said Sanhueza. “We want companies to ship the next day, not the next month.”
Chile’s entry completes the original CPTPP roster, but the door remains open for new applicants. The United Kingdom concluded accession talks last year and is set to become the twelfth member once domestic ratification wraps up in London. Malaysia has signalled support for UK membership, viewing it as another channel into Europe should broader free-trade negotiations stall.
With copper demand rising for electric-vehicle batteries and Chilean fruit season peaking from March through May, Malaysian traders have a narrow window to lock in contracts under the new tariff lines. Tengku Zafrul’s message is blunt: “Register now, ship in March, and bank the savings before your competitor does.”
