Malaysia stands to gain from TPPA
14 Jul 2013 04:59pm
By Christine Lim
Concerns that the Trans-Pacific Partnership Agreement (TPPA) will be disadvantageous to Malaysia are largely misplaced as negotiators will certainly safeguard the country’s economic and trade interests during the trade talks.
As a trading nation, it makes economic sense for Kuala Lumpur to join the TPPA to gain greater access into the markets of its trading partners especially the United States, Japan and Asean.
Unfortunately, irresponsible quarters are circulating what the Ministry of International Trade and Industry (MITI) describes as inaccurate information.
Among them are allegations of a study by the United Nations Development Programme (UNDP) containing recommendations for Malaysia not to sign the TPPA.
MITI rightly has come out to categorically deny these allegations saying that they “grossly misrepresent the Malaysian Government’s position with regard to our trade agenda.”
The public can rest assured that Malaysian negotiators would safeguard the country’s domestic trade and economic interests and more importantly the New Economic Policy (NEP).
They are not going to sell out the country.
After all, the Cabinet has to give the go-ahead to Malaysia’s offer at the talks which begins its 18th round in Kota Kinabalu from July 15 to 25, before any deal is signed.
Claims that the US and Japan will close off their markets to Malaysia and disadvantage domestic industries, is again misplaced for America has been a major market for local semi-conductors and electrical and electronic components for so long.
Although it is a trade deal, it also impacts foreign investments whereby Japan has been a major investor in Malaysia along with the US and Asean countries.
Investments follow trade closely, thus there will be obvious advantages to Malaysia both in terms of expanded markets and inflow of investments.
For instance, the textile industry has come out in full support of the TPPA, saying Malaysia’s total textile and apparel exports are projected to increase by 20 per cent with the implementation of the pact.
The Malaysian Textile Manufacturers Association says the elimination of duties under the trade pact would make Malaysian textile and apparel products more competitive.
Exports to TPP member countries in 2012 amounted to RM3.3 billion. The TPP agreement will see a decrease of import duty for Malaysian textile and apparel products entering the TPP member countries.
TPPA, a free trade initiative involving 12 countries, is expected to expand exports of participating countries into a large global market base and provide cheaper product base for consumers.
This is through an effective lowering of proposed tariff among participating countries.
With the proposed elimination or reduction of duties in the TPP agreement, Malaysian products would be more competitive, particularly in the larger US market.
In any trade pact, there would be a certain amount of give and take with concessions having to be made by some countries.
Malaysian negotiators would just have to tread carefully.
Judging from the strong stand they took against the US and Europe and other developed countries at the World Trade Organisation (WTO) talks which collapsed in Cancun, the people can be rest assured that TPPA would benefit Malaysia in the long-run.
Negotiating countries for the TPPA include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam.
Japan will make its entry as the 12th TPP member in Kota Kinabalu, Sabah.
Member countries are targetting to conclude negotiations by this year with the aim of liberalising trade.
There are fears that the US is forcing the TPP aimed at sidelining China, which is unfounded because Chinese exports to the US runs into the billions of dollars.
The American economy is inextricably linked to the China and no one economy can shut out cash-rich China.
It also has a huge market and most multinational companies are already well-represented in the vast lucrative market.
The governments from where these MNCs originate are certainly not going to do anything to jeopardise trade and economic linkages with China.
At the 18th round of the TPP negotiations, 180 stakeholders will be presenting their views.
Progress of the TPP negotiations in Kota Kinabalu is expected to be assessed during the Asia-Pacific Economic Cooperation (APEC) leaders meeting in October in Bali this year.
For Malaysia, the clear message in negotiating the TPPA is for domestic industries and the economy to become more competitive in an undoubtedly challenging globalised environment.- BERNAMA