KUALA LUMPUR: There will be no Trans-Pacific Partnership (TPP) without the participation of the United States.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed, in clearing the air on the fate of the trade agreement, said it requires ratification of at least six countries, accounting for 85 per cent of the total GDP of the 12 countries, to bring it into force.
“The US’ GDP alone constitutes about 60 per cent of the total TPP Members’ GDP. Hence, there will be no TPP without the US’ participation,” he said.
On the current status of the TPP, he said the current US administration under President Barack Obama had recently indicated that they have exerted all efforts within its power to obtain Congressional approval of the TPP.
Mohamed said as ratification involves a legislative process, it is now up to Congressional leaders to decide on the next move.
He said that the trade pact members are aware that Congressional leaders appear not too keen in bringing the bill forward during current session.
“The fate of the TPP will therefore depend on whether the new US Presidency will ratify the Agreement,” he said in a statement.
Mohamed said the Malaysian government holds the view that the TPP, which had taken into account the country's specific concerns, including the Bumiputra agenda of Malaysia, has the potential to boost trade, investments and create jobs.
He added that it will also provide preferential access into four markets which Malaysia currently do not have a Free Trade Agreement (FTA) with namely; the United States, Canada, Mexico and Peru.
“Should the US withdraw from TPPA, it will effectively mean that the Agreement cannot enter into force,” he said.
He said TPP members will be meeting in Lima, Peru next week in the margins of the APEC Summit to discuss recent developments and the way forward.
“We hope to obtain a clearer picture on the state of the TPP during that discussion,” he said adding that Malaysia will monitor closely developments on the TPPA under the new US Presidency.
Mohamed said that if the US decides that they will not ratify the TPP, Malaysia will discuss with the other members on the next course of action.
“As an open trading nation with a limited domestic market, Malaysia will continue its efforts to seek greater market access through preferential trading arrangements with countries we currently do not have FTAs,” he said.
“In line with this aspiration, should there be a confirmation that the TPP will not materialise, we will explore other available options, including negotiating bilateral FTAs with the TPPA members that we currently do not have an FTA,” he explained.
Mohamed said against the backdrop of sluggish economic recovery and the lowest rate of global trade growth in three decades, there seems to be a rising trend of protectionism and inward-looking sentiment in a number of countries.
“It is imperative for the global community to continue holding an open dialogue and engagement to stop this trend from getting translated into misguided policies which could dampen the global trade growth.
“Growth in world trade has been one of key drivers of prosperity across the globe for many decades until the Global Financial Crisis of 2007,” he said.
Mohamed assured that Malaysia will remain involved in bilateral and multilateral trade agreements with other countries.
“Our focus now is on the Regional Comprehensive Economic Partnership (RCEP) involving 10 ASEAN countries and 6 major trading partners in the Asia Pacific region, including China,” he said.
He pointed out that during the last Ministerial Meeting in Cebu, Philippines, RCEP members have made some progress in narrowing the gaps on key issues for Goods, Services and Investment.
“The current uncertain international economic situation has motivated and strengthened the resolve of RCEP countries, which are among the fastest growing countries in the world, to continue working closely in reaching a conclusion of this trade agreement.” Mohamed said.