KUALA LUMPUR: News that U.S. President Barack Obama will no longer try to push the 12-country Trans-Pacific Partnership trade agreement through congress following Donald Trump’s election victory comes as a blow to Malaysia.
Many local and foreign businesses had also been counting on the TPP to make greater inroads into markets such as the U.S. But the probable death of the TPP comes at a time when Malaysia is already looking firmly east to drive its future trade and investment growth.
Some people on the left feared that the Trans-Pacific Partnership would push up the price of generic medicines and weaken labor protection, while some right-wing groups feared the TPP would dilute the special economic privileges enjoyed by ethnic Malays. But the government and business both saw the deal as key for this heavily trade-dependent economy.
Investors, such as this Chinese textile manufacturer, had been banking on the TPP to give them tax advantages when exporting garments to the US. But they – and the Malaysian government — are going to have to re-think their strategies.
“China would become an even more important partner in terms of driving Malaysia to the next level of growth particularly in terms of the greater dependence on intra-regional trade, and then importantly to wean away from the other advanced economies that are currently experiencing a very sharp growth slowdowns,” said Prof. Yeah Kim Leng, one economist at Sunway university.
On his visit to China earlier this month, Malaysia’s prime minister Najib Razak signed 35 billion dollars worth of business deals.
Along with six other TPP countries, Malaysia is keen to seal a Regional Comprehensive Economic Partnership with China, the other ASEAN and East Asian countries. The demise of the TPP should only accelerate negotiations.
