Parliamentarians will have to weigh a range of factors before they decide whether Malaysia should be party to this grouping, says David Yeoh.
The much talked about Trans-Pacific Partnership agreement saw negotiations with Malaysia and 11 other nations concluded on 5 October 2015.
The eleven are Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
On the positive side, Malaysia’s Gross Domestic Product (GDP) is expected to increase by up to US$211bn within the first decade of the implementation of the TPPA, which is due to come into effect in mid-2018.
Investments are projected to soar by up to US$239bn. These will mainly be in textiles, construction and the distributive trade (source: PricewaterhouseCoopers). This will result in export-oriented firms in the textiles, automotive components and electrical and electronic (E&E) sectors benefiting from enlarged market access to TPP countries.
Malaysia’s TPP participation apparently would be consistent with the New Economic Model (NEM) while hopefully achieving its ambitions of becoming a high-income nation. This would have positive effects on wealth and job creation in the country.
Malaysia’s non-participation in the TPP is projected to cost it a cumulative Gross Domestic Product (GDP) loss of up to US$16bn over 10 years after the TPP comes into force. Firms in sectors such as oil and gas, construction and retail would also face increased competition in the liberalised post-TPP era (source: PricewaterhouseCoopers).
There are also concerns about intellectual property rights over drugs: existing pharmaceutical manufacturers would be affected.
Moreover, Malaysia’s small and medium-sized enterprises entrepreneurs would be competing against big players like the multinational corporations in the “survival of the fittest” after the TPP takes effect.
Non-participation in the TPP might negatively impact Malaysia-US relations giving rise to challenges, such as certification requirements. This has led other Asean countries, namely Indonesia, the Philippines and Thailand, to register their interests to avoid any political consequences from non-participation in the TPP.
With whatever information gathered, parliamentarians will decide during debates in late January whether Malaysia should be party to this grouping of 12 Pacific Rim countries. They will take into consideration the opportunities, threats and challenges to Malaysia, the competitiveness of Malaysian firms and, most of all, the implications for the people.
David Yeoh Beng Tatt is an Aliran member based in Penang.