Amid uncertainties arising from a potential fallout of the Trans-Pacific Partnership Agreement (TPPA), Malaysia should “carry on without America” and look to a greater Asian economic cooperation if the sevenyear deal fails.
Centre for Public Policy Studies chairman Tan Sri Dr Ramon Navaratnam said Malaysia must be innovative and should not think within the frameworks of the West if the country were to continue to progress and compete.
“The US is not the only big economy in the world. We’ve got China, India and the Middle East today. The future is here (in Asia) not there,” Ramon told The Malaysian Reserve in a recent interview.
He added that if the US government under President-elect Donald Trump chooses to withdraw completely from the TPPA, Malaysia and other forward-looking states should keep the momentum going and shift the centre of the economy towards China and Asia.
“The Asian region holds a vast amount of potential. If the US decides to reject the TPPA, they are undermining their own interest. It will be a historical miscalculation on their part,” Ramon said.
The much debated free trade deal has been widely regarded as doomed after Trump’s unconventional win against Hillary Clinton in the US presidential election.
Trump has made his position on TPPA clear in his controversial campaign calling it a “job-killing” trade policy.
Negotiations for the deal concluded on Oct 5, 2015, and was signed in February this year by all 12 members of the pact — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.
The agreement will come into effect when six countries accounting for 85% of the bloc’s gross domestic product (GDP) have ratified the 6,000-page bill. So far, the responses have been mixed.
Just days after Trump’s presidential victory, Japan decided to ratify the TPPA despite protests from Opposition lawmakers who said the ruling party was acting in a haste.
By pushing the bill, the Abe administration “will send a clear signal to the US that Japan has no intention of renegotiating the agreement,” Tomohiro Yamamoto, a Liberal Democratic Party lawmaker reportedly said.
Prime Minister Shinzo Abe’s plan to overhaul Japan’s economy is largely centred around the TPPA. Meanwhile, New Zealand local news sources reported that Prime Minister John Key said it was “fairly unlikely” the TPPA would pass the US Congress in the lame duck period before Trump is inaugurated on Jan 20 next year.
Following the uncertainty, a greater emphasis is now expected of the Regional Comprehensive Economic Partnership (RCEP) — an Asean-centred free trade deal between the 10 Asean member states with Australia, China, India, Japan, New Zealand and South Korea — according to Asian Strategy and Leadership Institute senior policy analyst Jordan Heng-Contaxis.
Heng-Contaxis said the RCEP can act as a viable “plan B” for Malaysia, although it may not be at par with the TPPA in terms of standards.
“The RCEP will go ahead and I think if that’s the trend, the administration in Malaysia, as we’ve already seen, will probably align itself more with China,” Heng-Contaxis said.
He added that since the TPPA was drafted by the US, the standards of the agreement would be higher than the RCEP. The 16-member RCEP has a combined population of over three billion and a collective GDP of US$22.7 trillion (RM97.61 trillion).
The RCEP is ahead of the TPPA by over two billion in terms of population size, but falls short of a massive US$5 trillion in GDP.
Heng-Contaxis said the upcoming Asia-Pacific Economic Cooperation Summit in Peru on Nov 19 will act as an opportunity for the 12-member states involved in the TPPA to discuss the issue openly and make decisions from there.
“I think there will be a lot of interventions and serious conversations going on about this topic of protectionism, isolationism and opposition to globalism as we’ve seen with Brexit, the US presidential election and even the Philippines,” he said.
Ramon, on the other hand, said that there is still hope that negotiations may continue as the US have yet to completely disregard the pact.
“This may not be the end. They may make some amendments and we have to look at it but the negotiation process should continue,” Ramon said