Work done on TPP can be put to good use

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 I think that should continue, because some of the regulations could be outdated.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.”