Peculiar year as free trade advocators turn protectionists
KUALA LUMPUR: It has been a rather peculiar year in 2017 for the global economy and predominantly the international pacts, where once advocators for free and open trade have turned protectionists, fanning anti-globalisation sentiment and an inward- looking mindset.
Amid this backdrop that has been sweeping through the advanced economies of Europe and United States, developing nations such as China, India and Asean nations have instead been forward looking towards embracing multilateralism and committing to free trade and globalisation.
Prime Minister Datuk Seri Najib Tun Razak had during the recent Asia- Pacific Economic Cooperation (APEC) Summit in Vietnam, voiced concern over the rise of anti-globalisation within the grouping which ran contrary to its original aspiration.
“It is ironically against the whole philosophy and the raison d’etre of APEC’s set up. There’s a lot of soul searching we have to do during this APEC,” he said during the APEC CEO Summit, where US President Donald Trump and Chinese President Xi Jinping also delivered their speeches.
Similar “soul searching” sentiment was echoed at the World Trade Organisation (WTO) meeting in Argentina early this month, out of disturbing notion over a major paradigm shift and divide around the question of development and its relation with trade moving forward.
WTO Director-General Roberto Azevedo had expressed this concern in his closing remarks and called for the organisation to do some real soul-searching after the biennial ministerial conference ended without any “substantive agreements” among the 164 members.
Similarly, APEC ministerial meeting almost failed to issue the traditional joint statement on its outcome due to differing opinions, especially on the “balance of trade” issue and the use of the word “protectionism”.
On the sidelines of the summit, the dramatic negotiation to save the mother of all trade deals – the Trans-Pacific Partnership (TPP) – sans US participation, almost stole the show from the main event.
It has since reached a deal to proceed after a series of talks that saw a “no-show” from Canadian Prime Minister Justin Trudeau during the TPP Leaders’ Meeting, almost derailing efforts to revive the ambitious agreement.
The 11 members finally agreed on the “core elements” and the TPP is now to be known as the Comprehensive and Progressive
It is ironically against the whole philosophy and the raison d’etre of APEC’s set up. There’s a lot of soul searching we have to do during this APEC. Datuk Seri Najib Tun Razak, Prime Minister
Agreement for Trans- Pacific Partnership (CPTPP).
It will enter into force once six countries have ratified it.
As for Malaysia’s position, the Prime Minister said there would be more work to be done for the CPTPP.
“After this, there will be work programmes to be done, and Malaysia, of course, continues to maintain that we have to address our sensitive social economic policies such as Bumiputera preferences and measures for public health.
“We do not sacrifice our important domestic agenda as the result of agreeing to adopt TPP,” said Najib, adding that Malaysia was able to get most of the suspensions it requested, especially in the pharmaceutical and copyright matters.
The conclusion of proceeding with the CPTPP, hinted that trade liberalisation may still advance despite challenging international economic conditions, with many bilateral free-trade agreements ( FTAs) and regional- trade agreements (RTAs) having been further negotiated.
As “America first” reins in the world’s largest economy, many are increasingly turning to China to helm other trade agreements, such as the Regional Comprehensive Economic Partnership ( RCEP) with its 16-member countries.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed was reported as saying that ministers and senior officials were under pressure to conclude the world’s largest trade bloc, constituting nearly one-third of the global economy, by 2018.
“We are still finding it difficult to narrow the huge gap between the participating countries. There are two extreme views … the first, with low-level ambition, while the second, mostly developed countries, looking at very high ambition,” he told the Malaysian media covering the 31st Asean Summit and Related Summits then.
RCEP covers trade in goods and services, including financial and telecommunications facilities, investments, economic and technical cooperation, intellectual property, e-commerce, competition and dispute settlement.
Unlike the TPP Agreement, it does not include issues of government procurement, labour and the environment.
During the year, Malaysia also continued to pursue growth opportunities within Asean by remaining committed to the Asean Economic Community ( AEC) vision and further liberalising trade and investment regulations.
According to Malaysia External Trade Development Corporation, Malaysia’s exports have increased after the establishment of the AEC in 2015, with total exports to Asean markets rising to RM230.93 billion in 2016 from RM213.4 billion in 2014.
The grouping also welcomed the strengthening of its economic cooperation with Dialogue Partners through the renewed Asean-Japan 10-Year Strategic Economic Partnership Roadmap, the implementation of the USAsean Connect, the 2016- 2020 Work Plan to implement the Asean Canada Joint Declaration on Trade and Investment, the Post- 2015 Asean- Russia Trade and Investment Cooperation Work Programme, and the 2017-2018 Asean-EU Trade and Investment Work Programme.
Going forward, Malaysia will actively continue to embrace globalisation and expand its global network through multilateral and bilateral FTAs, thus allowing investors in Malaysia to gain greater market access for their products and services in the region.
As rightly pointed out by Najib during the APEC meeting in Vietnam, globalisation is not a choice, nor something that the country can stay on the sideline without the risk of being marginalised.
“You have to embrace change, you have to confront it and take the challenge and make necessary policies and programmes,” he said.
He said globalisation was good for Malaysia and the world but it could not be left unbridled without positive intervention. — Bernama