AFTER many years of complex multi-nation negotiations, the Trans-Pacific Partnership (TPP) agreement has been finalised and, at a macro level, it is clear that it presents a once-in-a-generation opportunity for Malaysian businesses to secure first-mover advantage in a massive new global trade bloc.
The TPP covers 12 countries with a combined gross domestic product (GDP) of US$30 trillion (RM131 trillion). Together it represents almost 40 per cent of the world’s economy. It will include countries in North and South America and key Asian markets including Japan.
As an export-oriented economy, where exports of goods and services account for more 80 per cent of GDP, Malaysia stands to see huge gains from improved access to a large and diversified market.
I agree with International Trade and Industry Minister Datuk Seri Mustapa Mohamed that the preferential access the agreement gives Malaysian exporters to other nations that are part of the bloc provides Malaysian businesses in a wide range of industries a competitive advantage over rivals from countries which are not part of the TPP.
When you combine the TPP with Malaysia’s existing trade treaties and the pending formation of the Asean Economic Community, export-oriented Malaysian businesses now have a global footprint of improved market access.
Whether you’re a palm oil exporter or a tech company in Kuala Lumpur, the TPP is an opportunity to grow and create jobs. Plainly, opportunities for diversification of export markets should be given every chance of success.
Despite this, a number of concerns about the potential impact of the TPP have been raised. To its great credit, the government has worked hard to ensure the TPP takes into consideration Malaysia’s concerns and sensitivities.
Throughout the negotiations, Mustapa has been upfront in identifying both the benefits and the challenges for Malaysia. He also made it clear that Malaysia would not be rushing to sign a deal at any cost. There have been sensitivities about the safeguards in place to protect the Bumiputera and Small and Medium Enterprises preferences.
There have been concerns that the price of medicines would rise under the TPP because there will be stronger protections for patents.
All along, the government has been firm that it wouldn’t budge from its position of opposing extensions to drug patents as it would reduce access to cheaper generic drugs.
While the detailed text is not yet available in regard to intellectual property, the TPP will not require any changes to the patent system and copyright regime. It also recognises the importance of new innovative biologic medicines, which provide opportunities for the biotech industry.
Now that the negotiations are finalised, the government has committed to engage in genuine consultation with interested parties and the public more broadly once the formal text of the agreement is prepared before a final “collective decision” is made on whether Malaysia signs up to the TPP.
Subject to ratification, the world is now a different place for Malaysian businesses — it is up to them to take the steps necessary to take advantage of this deal for their products and services.
If Malaysia is to remain competitive and provide opportunities for the next generation of young people, then it must look for ways to make Malaysian goods and services more accessible to the global market. The TPP provides a great framework for that accessibility. It should be given every chance of success.
The beginning and end of any trade deal is jobs. Navigating the complexities of the multi-nation TPP negotiations to provide opportunities for job creation is a significant achievement.
The writer is chief executive of CPA Australia, one of the world’s largest
accounting bodies. A membership of 155,000 in 120 countries is supported through 19 offices across the globe. CPA Australia will be celebrating 60 years in Malaysia next year