Diverging on the TPP

THE Trans Pacific Partnership Agreement (TPPA) will now take another life and resurrect itself as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The TPPA was ditched when President Donald Trump decided that it was in the US's best interest to pull out of the agreement.

With the withdrawal of the US from the agreement, the remaining 11 countries were recalculating how they would position themselves.

Japan is, perhaps, the most ardent supporter of the TPP. It sees value in the TPP, even without the US. Prime Minister Shinzo Abe thought he could convince Trump about the value of the TPP, with little success.

Recently, following Trump's visit to Japan, the Japanese government has strongly excluded any possibility of a bilateral agreement with the US.

Pursuing a bilateral trade deal with the US under the Trump administration will open Japan to more pressure than it would be prepared to tolerate.

The Malaysian stand has been less firm and has, from time to time, vacillated.

Prime Minister Datuk Seri Najib Razak has been enthusiastic about the TPP from the start. At the Apec CEO Summit on Nov 9, he announced that he was "reasonably confident" of an outcome, adding that "we've managed to salvage some kind of free trade agreement".

Najib's statement was weak on two counts. It could have been more carefully crafted. First, it brushed off the undercurrents of disagreement that befuddled the discussions. Second, not all countries are happy with "some kind" of an agreement, even if Malaysia might be.

Najib's views are in stark contrast to Canada's trade minister, Francois-Phillipe Champagne, who emphatically said that "it's far more important to get the right deal than a fast deal."

Champagne is keen on pushing up the mark on the "progressive" elements of the pact. This includes labour rights and the environment.

Canada is not the only country that wants to tweek the TPPA. New Zealand is dissatisfied with the existing provisions on investor-state dispute settlement.

Intellectual property rights is another contentious issue that has been raised in different contexts. While some say that IPR clauses will not be in favour of developing countries, others claim that it is features such as IPR that make the TPPA significant – the "gold standard" in FTAs.

However, it is often not mentioned that one man's gold standard is another man's death sentence.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed's views on the TPPA have seen some kind of an evolution. Soon after Trump's reversal on the TPP, Mustapa seemed to hint at the need for a renegotiation with the US out of the deal.

The rationale for a renegotiation was clear, and correctly so. With the US out, the calculus of costs and benefits had changed.

If what was at stake had changed, needless to say what was being sacrificed had, necessarily, to change. The logic for calling for a renegotiation is apparent.

But the minister's stance has been softening. It could be due to several factors, ranging from geopolitical considerations to the prime minister's sense of direction.

It could also be due to a sense of membership that the minister finds hard to discard. Peer pressure can be binding.

When it was less obvious how the TPP would go, the trade minister suggested that the Trade and Investment Framework Agreement (Tifa) could be the way forward with the US. The minister offered the Tifa as an intelligent option for Malaysia to develop deeper economic engagement with the US in the absence of the TPPA.

There is no doubt that the trade minister has in his pocket good alternatives that do not have to tie us down to unprofitable ventures.

In the aftermath of the Apec summit at Danang, we have seen Japan, New Zealand and Canada all loudly and firmly holding their respective stands.

Even when dealing with the powerful, there is absolutely no need to be in agreement when circumstances do not suit us.

Dr Shankaran Nambiar is author of Malaysia in Troubled Times. Comments: letters@thesundaily.com