From: Saleh Mohammed, via email
The prime minister has said that of the 12 countries involved in the Trans-Pacific Partnership Agreement, Malaysia was the only one presenting it to the Parliament for debate and ratification. He also stated that the country managed to get the best possible deal in the negotiation, noting that the agreement was signed “on Malaysia’s terms”.
Back in 2014, the PM himself reassured Malaysians that we stand to gain from an expanded market base and Malaysia would have a lot to lose given that it is an export-oriented country.
Strangely, in March 2016, the Deputy International Trade and Industry Minister said Malaysia has still the option of withdrawing from the TPPA if the government finds that it has more disadvantages than benefits.
This is despite three costs and benefits studies by Price Waterhouse Coopers, the Institute of Strategic and International Studies; and one by US economists Peter Petri and Michael Plummer.
While the ISIS study concludes that Malaysia’s participation in the TPPA is in its national interest, the opposite also holds true.
Malaysia’s non-participation can be expected to negatively impact Malaysia-US relations. For the US, TPPA is an important pillar of its ‘pivot’ or ‘rebalance’ to Asia. It could also incentivise US legislators to continue pursuing Malaysia on issues such as human trafficking, currency manipulation and environmental degradation.
The working paper by Petri and Plummer in January 2016 concludes that the TPPA will raise US wages but is not projected to change employment levels and it will increase annual real incomes in the US by US$131 billion.
Compare that with PwC’s study that projected net economic gains, with GDP to increase by US$107~211 billion over 10 years and 1-2 million jobs created. While it is good for job creation, it also indicates to us our level of productivity compared to US.
Post the US presidential election, MITI says there is no indication that Washington under Obama would not table the Bill for ratification. Some say Malaysia may renegotiate some aspects but Trump will not pull back on the TPPA. The MITI minister says Malaysia will not budge from its stance on the agreement.
But Trump, who will assume office on Jan 20, has said he will use all means available to get a “better deal” for the US from its trading partners, and this includes opposing the TPPA. He also wants to establish strong protectionist trade policies in the first days of his presidency. Even Australia considers the TPPA to be doomed.
Why are we still gung ho about the TPPA? Are we serious? What’s your wager that the US will ratify the TPPA?
Saleh Mohammed is an FMT reader
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