Starting 21 February 2023, Malaysian exporters of palm oil, rubber products, and electronics will face reduced costs when shipping to Chile. The South American nation formally becomes a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership on that date, triggering immediate tariff relief for qualifying goods from Malaysia. Malaysia’s Minister of International Trade and Industry, Tengku Datuk Seri Zafrul Abdul Aziz, confirmed the development on 12 January 2023.
Chile had deposited its ratification instrument in December 2022, completing the domestic procedures required for the pact to enter force. Chile already ranks as Malaysia’s third-largest trading partner in Latin America.
Two-way trade reached USD 525 million in 2022. Malaysian shipments consisted largely of palm oil and refined petroleum, while Chile exported copper cathodes and fresh fruit in return. The CPTPP eliminates the 6 percent tariff Malaysia previously charged on Chilean copper concentrate. This reduction directly benefits Malaysian electrical and food-processing sectors that depend on the material.
Malaysian importers will also pay less for Chilean fresh grapes and seafood, which are key inputs for the country’s food-processing industry. Under the agreement, Malaysian exporters gain lower tariff rates on palm oil, rubber products, and electrical and electronic goods heading to Chile.
The palm oil sector, in particular, sees an opportunity. Malaysia is a leading global producer, and Chile represents a growing market for edible oils. Reduced tariffs may allow Malaysian exporters to undercut competitors from Indonesia and other non-CPTPP producers.
Chile secured its CPTPP entry to lock in market-opening advantages before broader regional initiatives could diminish them. Officials in Santiago project the agreement will add 0.3 percentage points to annual GDP growth by expanding access for copper, fruit, wine, and forestry products.
The 11-member trade bloc now spans the full Pacific rim, linking economies that together represent roughly 13 percent of global GDP. Practical implications are significant for businesses. Malaysian companies that have not reviewed the tariff schedules should do so.
While tariff relief is automatic for covered goods, supply chains routed through Chile will experience real cost shifts. Copper concentrate, a heavy, low-margin commodity, sees a 6 percent tariff elimination that changes procurement calculations for Malaysian manufacturers.
On the agricultural side, Chilean fresh grapes and seafood face lower barriers entering Malaysia. This could pressure domestic producers of similar goods but also provides new sourcing options for Malaysian food processors who have been paying higher prices from other origins. The Malaysian government has encouraged businesses to diversify export markets beyond traditional partners such as China, the United States, and Japan.
Latin America has been a secondary priority for many firms. The CPTPP’s expansion into Chile offers a concrete reason to refocus on the region.
Tengku Zafrul did not announce new promotional programs or trade missions alongside the ratification news. The tariff reductions themselves serve as the incentive. Companies that restructure their supply chains around the new rates quickly will capture the savings first.
