TPP: Are we ready for it? — Tay Tian Yan

OCT 7 — Malaysians are still busy with arguing over racial issues and demanding an apology over the “slap Chinese” remark, or whether schools should be closed when the air is very unhealthy.

We are hardly aware that the big wide world outside has already experienced dramatic changes and a new paradigm shift is beginning to take shape quietly.

Majority of Malaysians are either kept in the dark or simply unconcerned.

An agreement has been reached for the Trans-Pacific Partnership (TPP), and a new economic order is well on the horizon, with Malaysia being a part of it.

Whether you like it or not, we will all be a tiny constituent of this partnership.

You mustn’t think this is the government’s problem alone. While the government represents this country to sign the TPPA to usher Malaysia into this new economic order, it is the problem each one of us has to encounter what kind of consequences and impact that will come with our participation.

You mustn’t also think this is the problem of large multinationals or traders. TPP covers a very wide scope, entailing majority of merchandise, their prices and intellectual property rights. And very likely it will involve your own business, job, education and consumption as well.

Perhaps up till this point you might ask what this TPP is all about.

Well, it is going to be a free trade area advocated by the Untied States with members spanning across both sides of the Pacific. The signatories of this round of TPPA include the United States, Canada, Chile, Mexico, Peru, Australia, Brunei Darussalam, Malaysia, New Zealand, Singapore, Vietnam and Japan. More countries may join in the future.

Member countries are supposed to open up their markets to compete freely. Tariffs have to be abolished or drastically reduced to allow freer movements of services, products, funds and labor.

This means Malaysia has signed a free trade agreement with 11 other countries in one go, including the US and Japan.

Compared to tortuous WTO negotiations or the procrastination with the AFTA talks, TPP has managed to strike an accord within only five years. This, coupled with the enormous size of the member states’ combined economy, simply makes it an impossible mission to accomplish.

Collectively the GDP of these countries makes up 40% of global total. From Malaysia’s point of view, this will mean we have a much larger market offering considerably smoother access that is poised to further stimulate the country’s economic and trade development.

But, this will also mean we have to equally open up our domestic market to embrace heads-on competition from the outside world.

In other words, it is both an opportunity and a mounting challenge, and it depends very much on whether we are able to conquer this huge economic cake or have our tiny one gobbled up by outsiders.

As an export-oriented country, Malaysia is heavily reliant on external trade and as such, the freer the market, by right the better it is for the country.

During the negotiations, TPPA parties agreed to take into consideration Malaysia’s concerns and sensitivities, particularly in the areas of government procurement, GLCs and bumi issues. This might have partly contributed to Malaysia’s avid participation in TPP.

Many local NGOs have nevertheless opposed TPP, arguing that this would put the country’s economy under the domination of much more powerful economies such as the United States, Japan and Australia. They are also concerned prices of certain products may rise, such as medicines.

Fierce nationalists such as Dr Mahathir have even slammed the government for selling the country to outsiders, hinting specifically at the US.

Such fears are not unfounded, especially for the vested interests who strongly oppose to any form of liberalization to keep their interests intact.

That said, we are a very small country. If we do not exploit the global market, our potentials are very limited.

With TPP and the challenges that ensue, the government is forced to liberalise and implement fairer and more equitable policies towards more sustained reforms.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.