IMPORTANT INITIATIVE: Country’s GDP set to improve, while
its goods and services will reach a wider market, says Miti
THE Trans-Pacific
Partnership Agreement (TPPA), an initiative to establish a free trade agreement
(FTA) between 12 countries - Australia, Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, the United States and Vietnam - will see
a market of 800 million people and combined gross domestic product (GDP) of
US$27.5 trillion (RM89.1 trillion).
The agreement covers
new elements such as competition, labour, environment, government procurement
and intellectual property rights. The International Trade and Industry Ministry
(Miti) has put together a Q&A (question and answer) to address public
concerns and fears about the ongoing talks.
Here are the excerpts from part one:
Question: What is the rationale of joining the TPPA
negotiations?
Answer: The
government views the TPPA as an important initiative as Malaysia seeks to
expand market access opportunities, enhance its competitive advantage and build
investor confidence. The comprehensive study conducted by the United Nations
Development Programme (UNDP) also identified several major economic benefits to
Malaysia, including welfare gains of 1.46 per cent and higher wages for skilled
and unskilled labour by 2020, in addition to improved GDP growth due to greater
market access among member countries.
The successful
conclusion of the TPPA will form a huge market of 800 million people with a
combined GDP of US$27.5 trillion. This far surpasses Malaysia's limited
domestic market of 29.5 million people and a GDP of US$300 billion.
According to a simulation study done by the Peterson
Institute of Economics in June last year, by 2025, Malaysia will benefit with
an increase in gross national income by RM26.3 billion and increase in exports
of RM41.7 billion.
Admittedly, the government is aware of the challenges and
controversies surrounding the TPPA because unlike other FTAs, it is
comprehensive and covers more areas of interest, which would naturally invite
more public opinion and debate. The government appreciates all views expressed
on the TPPA and will continue to engage the stakeholders and NGOs for inputs
and feedback.
Question: What are the benefits of TPPA for Malaysia?
Answer: Consultations with various stakeholders prior to
joining TPPA negotiations have revealed an increasing request from Malaysian
companies for more open markets and trade facilitative measures. There are
increasing numbers of Malaysian companies becoming global investors and they
require a level of predictability that can be guaranteed effectively through
binding agreements like FTAs.
Concurrently, there
is also interest from foreign companies from non-TPPA countries that are
exploring Malaysia as a base for their operations as the hope to enjoy the
benefits of the TPPA. The combination of greater market access for Malaysian
products and services under the TPPA and the continued inflow of foreign
investments will create a powerful catalyst in driving Malaysia's economic
transformation agenda.
With TPPA, Malaysia will become an integral part of the
greater economic integration within the Asia- Pacific region. It will also
significantly enhance Malaysia's engagement with important trading partners such
as the US, Canada, Mexico and Peru. As a member of TPPA, Malaysia will also be
able to increase it participation in the regional supply and value chains and
facilitate access for Malaysian products and services into bigger markets.
Question: What are the challenges of the TPPA for Malaysia?
Answer: The
government is aware of the many benefits and the challenges involved. For
instance, government procurement is one of the new elements in TPP, which was
never part of the FTAs that Malaysia has signed. This is one strategic area the
government is negotiating cautiously, after taking into consideration feedback
from stakeholders, particularly on the concern of safeguarding the interest of
local enterprises and the Bumiputera commercial and industrial community.
Intellectual Property Rights (IPR) is another difficult
area. One of the main concerns on IPR revolves around access to affordable
medi-cine and healthcare as well as longer protection term which might delay
manufacturing of generic drugs.
Malaysian negotiators will continue to negotiate an outcome
that will give Malaysians access to affordable medicine and healthcare.
Question: What will happen if Malaysia does not join the
TPPA?
Answer: The TPPA offers Malaysia an opportunity to be part
of a consumer market with 800 million people. Abandoning the TPPA negotiations
now would mean allowing other countries to set the terms of agreement without
considering Malaysia's interests and concerns. Acceding to the TPPA later would
result in Malaysia having to accept the rules, disciplines, terms and
conditions decided by others.
By not joining the TPPA, Malaysia would be at a disadvantage
in terms of seeking bigger and better market access for its products and
services. The impact of that disadvantage will be even more significant should
countries like China, Indonesia and other competitors decide to join later.
Once realised, the TPPA will result in a huge consumer
market for Malaysian goods and services. Market access to 800 million people is
not an opportunity we can afford to miss, especially since we are an open
economy highly dependent on international trade. In an increasingly competitive
global environment, our absence will make Malaysia less attractive as an
investment destination, compared with those that are TPPA members. As investors
avoid Malaysia, this could result in fewer opportunities for job creation.
Question: Who is in charge of the TPPA negotiations?
Answer: The cabinet has mandated Miti to coordinate
Malaysia's participation in the TPPA negotiations. Miti acts as the chief
negotiator but other ministries and agencies will lead the working groups for
areas under their responsibility. (See Table 1).
With the mandate from the cabinet, the lead ministries and
agencies involved are focused on safeguarding Malaysia's best interest in the
ongoing negotiations. Before every negotiating round, the cabinet is briefed on
all issues, and for the necessary mandate to be given to all negotiators.
Question: Was there a lack of consultation in forming
Malaysia's position in TPPA?
Answer: The government admits more consultations could have
been carried out. In this regard, Miti has made many statements assuring the
public that consultations have been carried out by negotiators in their
respective fields.
It had also organised a TPPA open day on August 1 to update
the public and the media on issues surrounding TPPA, to clear misconceptions
about it and to hear the public's concerns about it.
Miti welcomes the establishment of a bipartisan caucus in
Parliament. Its minister had met and briefed the caucus on developments and
issues concerning the matter. The caucus provided constructive inputs to the
government.
It must be noted that inputs and feedback from industry
associations, interest groups and business chambers play a key role in the
formation of Malaysia's negotiating positions. To illustrate a point,
Malaysia's position in the negotiations on government procurement, led by the
Finance Ministry, strongly reflects the concerns of stakeholders, the
Bumiputera business community and state-owned enterprises (SOEs) as well as
that the small and medium enterprises (SMEs).
Malaysia has also
maintained the rights of all states on matters related to land and water. On
SOEs, Malaysia's position is determined by the Finance Ministry and Khazanah
Nasional Bhd.
The government will continue to engage all stakeholders. In
addition to the open day, Miti met the Coalition to Act Against the TPPA
Malaysia on August 6 and discussed ways to enhance engagement with
stakeholders. Miti welcomes feedback and opinion from all parties regarding the
TPPA.
Question: Why the secrecy in TPPA negotiations?
Answer: While the negotiating texts have never been made
public as negotiations are ongoing, the government has and will continue to
share its negotiating position with relevant stakeholders during the
consultation sessions.
A level of confidentiality is required for two main reasons:
(a) regulations and the evolving process of negotiations and rules surrounding
TPPA oblige negotiators to maintain confidentiality of the negotiating texts
and (b) negotiators advancing the interests of Malaysia, strategically do not
want to publically disclose their bargaining positions to ensure the best
outcome during the negotiations.
Mindful of the public feedback, the Miti minister will put
this issue on the agenda of the forthcoming TPP Ministerial Meeting in Brunei.
Question: Why rush TPPA by October this year?
Answer: As in all negotiations, there is a need to work
towards a target date to conclude negotiations. It should be noted that the
Trans Pacific Partnership Leaders Statement issued on November 12 2011, in
Honolulu, clearly called on the negotiating teams to continue talks with other
Asia-Pacific partners that have expressed interest in joining the TPPA in order
to facilitate their future participation. TPPA leaders have set an October
target for substantial conclusion of the negotiations.
However, this is not a definitive deadline for the
conclusion of the TPPA as the parties involved are still negotiating on a
number of sensitive issues. It is in Malaysia's best interest that TPPA is
concluded in a manner that benefits the people.
Question: Why is China not in the TPPA?
Answer: The position of all TPPA members is for this
agreement to be a building block for the Free Trade Agreement of the Asia
Pacific (FTAAP), which will encompass all the Asia-Pacific Economic Cooperation
(Apec) economies, of which China is also a member. Membership in TPPA is
voluntary. Every Apec member, including China, is free to decide when to join
TPPA.
China is a very important trading partner to Malaysia. As
such, Malaysia certainly welcomes China into the TPPA.
Read more: TPPA: Its benefits and challenges at
Btimes
