Work done on TPP can be put to good use

> Malaysia can in­ject what it has learned dur­ing the process into its own lib­er­al­i­sa­tion plans and ne­go­ti­a­tions for other trade deals: Economists

The Sun (Malaysia) - - MEDIA & MARKETING - BY EVA YEONG

PETALING JAYA: US Pres­i­dent-elect Don­ald Trump may have sealed the fate of the much-de­bated Trans-Pa­cific Part­ner­ship (TPP), but economists in­sist that the work done in pre­par­ing for the TPP can be put to good use.

In­sti­tute for Democ­racy & Eco­nomic Af­fairs (Ideas) chief ex­ec­u­tive Wan Sai­ful Wan Jan said with the ex­pected an­nounce­ment of the US quit­ting the TPP once Trump takes of­fice on Jan 20, it is im­por­tant for Malaysia to “re­act” to it in the right way.

“Thanks to the TPP ne­go­ti­a­tions, we have iden­ti­fied many is­sues that are hur­dles to our own lib­er­al­i­sa­tion. We don’t have to ig­nore all th­ese find­ings be­cause we can still pur­sue the lib­er­al­i­sa­tion uni­lat­er­ally,” he told Sun­Biz in an email in­ter­view.

“It de­pends on whether the govern­ment still re­mem­bers the com­mit­ment to lib­er­al­i­sa­tion made in our own NEM (New Eco­nomic Model), or has the govern­ment com­pletely for­got­ten them. If the NEM is still worth the pa­per it was writ­ten on, then we can pur­sue the re­forms as part of our own lib­er­al­i­sa­tion process with­out the TPP.”

Wan Sai­ful said Malaysia can push for the high stan­dards set in the TPP for the on­go­ing Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship (RCEP) ne­go­ti­a­tions.

SERC Sdn Bhd ex­ec­u­tive di­rec­tor Lee Heng Guie in­stead be­lieves the govern­ment should con­tinue with the rat­i­fi­ca­tion process re­gard­less of the out­come of the TPP.

“The govern­ment has al­ready started to rat­ify some of the laws. I think that should con­tinue, be­cause some of the reg­u­la­tions could be out­dated. It is good for us to con­tinue rat­i­fy­ing all th­ese so that we are ready if any new trade ini­tia­tives come in,” he said.

Since the sign­ing of the TPP agree­ment on Feb 4, 2016, Malaysia has iden­ti­fied 18 laws con­cerned and is in the process of amend­ing them.

Ac­cord­ing to Lee, there are other av­enues that Malaysia can look into such as free trade agree­ments (FTAs) with some of the mem­bers within the TPP, in­clud­ing the US.

“If you look at what Trump said, even though he said the first thing when he is in of­fice he will take off the TPP, he also men­tioned that he will be en­cour­ag­ing free trade. So, at this mo­ment, we are not too sure what he is think­ing about, but hope­fully he is still a be­liever of free trade,” he said.

“Of course there will be protest, be­cause so much time and ef­fort were spent on the TPP and now, be­cause of Trump, ev­ery­thing can­not move. If they were to en­gage in FTAs, it will take time again,” he added.

Sun­way Univer­sity Busi­ness School Pro­fes­sor of Eco­nomics Prof Dr Yeah Kim Leng said fresh ne­go­ti­a­tions with the US will be tougher as they will take off from a dif­fer­ent start­ing point, given that the US has hard­ened its po­si­tion in terms of cre­ation of jobs for Amer­i­cans.

“The con­di­tions will likely be tougher as it will be less open and less ben­e­fi­cial to emerg­ing coun­tries be­cause un­der Trump they want to pro­tect jobs and keep their com­pa­nies on­shore. It will be more dif­fi­cult,” he said.

Yeah said with a more in­su­lar US, Malaysia will have to ex­plore other re­gional ini­tia­tives, par­tic­u­larly within the free trade area of Asia Pa­cific while RCEP and the Asean-EU FTA ne­go­ti­a­tions will be­come more ur­gent upon the demise of the TPP.

He said the key thing is to de­velop other bi­lat­eral trade and in­vest­ment agree­ments and re­gional ini­tia­tives.

Yeah said the ben­e­fits of glob­al­i­sa­tion can be pur­sued via other re­gional agree­ments but, with the US likely to step aside, China and other coun­tries that are equally big are likely to be the an­chor economies. “The Euro­pean Union is an­other trad­ing bloc that can pro­vide a lot of mar­ket ac­cess. Not to for­get, Asia as a whole is still very im­por­tant for Malaysia.”

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