Malaysia could do better — ratify CPTPP!

Ministers have to realise that Malaysia should not underestimate its importance in the global trade movement

pic by TMR FILE

TRADE deal negotiators might know too well that reaching an agreement takes time, energy, composure and coffee.

They deal with vast amounts of details, agreeing on fair trade practices and finding ways to bridge fundamental differences.

The initial round of trade consultations between delegations from each nation would always focus on finding easily agreeable common grounds, before steadily building onto areas where mutual agreement is more challenging.

The more time negotiators spend with their counterparts, the less likely they were to reach an agreement.

When the differences are too pronounced and an impasse unfolds, some negotiators would even storm out of the negotiation rooms, tossing papers in the air.

They are, after all, negotiating the best deals and terms for their countries’ economic gain. Therefore, blowing off a little bit of steam is permissible.

But these are the layers of onerous complexities that often escape politicians/ministers who are either too optimistically eager to strike a deal or simply fail to appreciate (and undermine) the massive amount of work of negotiators and diplomats assigned to these negotiations.

This piece addresses the latter in response to the downbeat statement from International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali that said Malaysia has no definite deadline to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in Parliament session on Aug 3.

The CPTPP internal ratification process went into a snooze mode since the last general election in 2018.

Amid the renewed sense of beginnings after months long of Covid-19-induced lockdown, there seems to be no greater impetus among government officials on reviving Malaysian trade treaties.

It inadvertently indicates that Malaysia is not in a hurry to ratify one, thus sending a worrying signal to the global trade community out there.

While this is obviously not the best time for the federal government to actively further engage state governments and federal ministries into ironing out details of the pact, finding a consensus on the ratification is the clear political standing the government can take to send optimistic signals to the business community in Malaysia and globally.

The major downside for not ratifying the deal is that Malaysia would find itself in a competitive disadvantage, with windfall going to competitor countries which will be hard to reverse over time if we lose those market access.

While we waited two years to reach a consensus on CPTPP, economically inferior neighbour Vietnam, which joined the treaty much later than us, not only ratified the deal but gained superstar status as South-East Asia’s global manufacturing hub.

The global trade environment has somewhat changed and trade deals are poised to shape Malaysia’s international relation and position in years to come.

More so than ever with pandemic concerns in play, trade deals like CPTPP (if done correctly) could help address modern trade concerns.

Sure, there will always be underlying issues, but structural reforms have to take place to instil investors’ confidence in the country.

When politicians say they are engaging everyone, how it exactly happens is an opaque practice. Isn’t 24 months not a time long enough?

Even if the government did reach an impasse in the ratification process, waiting it out is not a luxury we can afford at the moment.

Ministers and politicians have to realise that Malaysia should not underestimate its importance in the global trade movement.

Inward-looking trade policies not only would shrink our real economic potential, but playing catch-up with the rest of the world is regressive.

Priya Vasu is the assistant news editor at The Malaysian Reserve.