Say no to unfair deals, dominance — Dr M

SINGAPORE: Asean needs to continuously expand its market by engaging in Free-Trade Agreements such as the Regional Comprehensive Economic Partnership (RCEP), but it must also be steadfast not to resort to unfair deals or pacts that give dominance to anyone.

In his maiden speech on the Asean platform after 15 years, Prime Minister Tun Dr Mahathir Mohamad said what the regional grouping requires is a fair and mutually beneficial trade and investment cooperation that benefits countries of widely varying levels.

He said some 65 per cent of Asean's trade is with RCEP, which consists of 16 countries, and when realised, will be a huge market in its own, representing half of the global population and over 40 per cent of global trade.

"We must therefore leverage on the existing high level of trade linkages. We must not just accept trade and investment measures that may be unfair to Asean nations, and Asean economic integration," he said at the Asean Business and Investment Summit 2018, held in conjunction with the 33rd Asean Summit here, yesterday.

Dr Mahathir said as far as Malaysia is concerned, the country would be happy to be involved in a trade pact that provides benefits to the developing countries, especially in integrating companies from developing countries and less developed countries into the global supply chain.

The completion of RCEP negotiations would validate Asean's role in the economic integration of this region, as well as global trade and investments.

Asean Dialogue Partners should complement Asean and acknowledge that some Asean countries would require assistance and flexibility in meeting the higher market aspirations of the developed economies.

"What we require is fair and mutually beneficial trade and investment cooperation rather than the dominance by anyone.

"(Hence) RCEP must facilitate not only the interest of big firms but also the small and medium enterprises (SMEs) in the region. RCEP must see an enhanced role for SMEs to leverage and move towards becoming medium-sized and large-sized companies," he said.

Dr Mahathir said both the Asean Economic Community and RCEP could work in tandem to provide a good template for the rest of the world on moving forward towards inclusive and dynamic integration among countries of widely varying levels of development but with common aspirations for robust development and deeper economic engagement with one another and the rest of the world.

At the same time, he expressed concern that the rise of trade protectionism, resurgent nationalistic movements and inward-looking policies seems to be slowly taking place within the 10-member regional grouping.

Although this is triggered mainly by trade tensions between the two world powers for developed countries to adopt protective measures against developing countries, including the Asean countries, Dr Mahathir strongly believes that is it not the time to do so.

"It is not the time to close our doors by invoking trade protectionism measures, instead we should be actively engaged in finding amicable solutions and resolving trade issues through multilateral dialogues such as between Asean countries."

"It is now that we must continue to expand our intra-trade and deepen the economic integration within Asean,” he said.

Dr Mahathir said that Asean economies must be able to participate in megatrends, such as the Fourth Industrial Megatrends and financial technology or Fintech if their futures are to be assured.

"Threats to the value of their labour, skills sets, FDI (foreign direct investment, income and wealth distribution and ultimately governance systems are even now growing, and likely to become more critical in the future," he said.

The ability of Asean economies to participate in the 4th Industrial Revolution depends critically on their capacity to innovate in the future, he stressed.

On Fintech, Dr Mahathir said it is beginning to gain stronghold in the region with investments rising 33 per cent from 2015 to US$252 million in 2016, as reported by Ernst & Young.

He said governments should be more receptive by embracing change and working out regulatory mechanisms to include these new trends into the current financial environment.

"Despite new frontier challenges that we are facing, we must also be alert and firm with fundamentals such as good governance and the fight against corruption, without which, the cost of doing business in our region will escalate and will undermine our economies regardless of all the latest megatrends that we successfully embrace," he said. - Bernama