Conclusion Of TPP Negotiations On The Horizon

By Christine Lim

KUALA LUMPUR, Dec 27 (Bernama) — The ambitious 21st Century free trade agreement being negotiated among 12 countries in the Pacific Rim including Malaysia, is widely expected to culminate in a successful conclusion as early as 2015.

While the controversial Trans-Pacific Partnership (TPP) Agreement has drawn a lot of criticism and protest from various stakeholders, arguing that the deal is anticipated to advance the United States’ (US) interests, benefit large corporations and threaten national sovereignty, proponents contended that it could boost trade.

This is because the TPP, involving Malaysia, Singapore, Japan, Vietnam, Brunei, Australia, New Zealand, Peru, Mexico, Chile, the US and Canada, which accounts for up to 40 per cent of the world’s gross domestic product, will lift trade barriers and provide market access.

UBS Investment Bank Senior Asean Economist Edward Teather said governments in the Asean region were more willing to engage in the TPP negotiations and to take on some political risk as part of their reform agenda to push econmic growth on the back of improved outlook in the US and Europe’s economy next year.

“We expect export to support growth in the Asean economy next year as the credit cycle slows and generating less confidence due to concerns on the level of debt and current account deficit,” he told Bernama.

He explained that there was this question of interest rates being too low and credit over extended, driving people to spend too much.

However, Teather said there would not be a crisis in the region as the balance sheet of most countries in the Southeast Asian region are still clean.

In the case of Malaysia, he said the recovery in exports was expected to dominate amid the drag from fiscal consolidation as the government was expected to continue its reform agenda, moving away from wasteful subsidy spending and focusing on the business environment.

In this respect, he said the TPP is an indicator of reform as Malaysia’s willingness to take part in the negotiations reflected its readiness for reform in the coming years.

Teather predicted the TPP to be implemented by 2015 at the earliest, with the economic benefits among the participating countries to roll-out after that.

Meanwhile, US Trade Representative Michael Froman said there was good progress in the last four to five months in closing out issues, narrowing differences and focusing attention on the most politically relevant issues pertaining to the TPP.

“We want to make sure that substance dictate timetable, that it is a good agreement for all the countries involved,” he told Bernama recently during his official visit to Malaysia, where he had discussions and shared perspectives with ministers, TPP parliamentary caucus and stakeholders.

However, Froman did not give an indication of a specific timeline for the TPP to be concluded, saying that with countries coming together on the table and finding ways to address sensitivities, it was possible to wrap-up the discussions.

“This is consistent with the overall high standards of agreement, the impetus for trade integration across the region and consistent with the Asia-Pacific Economic Cooperation (APEC) goal,” he said.

In terms of sensitivities and outstanding issues, Froman said the Intellectual Property chapter was one of the most difficult and challenging issues.

During the TPP ministerial meeting held in Singapore from Dec 7-10, 2013, a statement by the Ministry of International Trade and Industry (MITI) Malaysia stated that wide gaps still remain in many of the chapters that would require further negotiations.

Many issues on state-owned enterprises, environment, intellectual property rights (IPR) and market access were still outstanding and negotiators had been tasked to explore solutions, MITI said.

The year-end target date for the conclusion of the TPP negotiations set by leaders at the APEC Leaders Meeting in Bali in October 2013, had proven to be impossible to achieve.

Malaysia continued to negotiate during the TPP 18th and 19th rounds in Kota Kinabalu, Sabah and Brunei this year, highlighting specific concerns and sensitivities in the areas of government procurement, state-owned enterprises, Bumiputera issues, IPR, environment and investor-state dispute settlement as well as the need for flexibilities including carve-outs, transition periods and country specific commitments.

Malaysia continues to work with other TPP members on the details of these flexibilities.

At the TPP ministerial meeting in Singapore, pertaining to the market access negotiations, there had been some improvement in the offers of TPP members but Malaysia continued to seek a better package.

Malaysia made its stance that the consultations with various stakeholders should be the source of reference on the on-going TPP negotiations.

The negotiators are currently working on the timetable for future work in relation to the TPP negotiations.

Meanwhile, it was reported that the next TPP meeting is expected to be scheduled in January next year.

The TPP, likened to a double-edged sword or a Trojan Horse for economic dominance, has definitely generated a lot of interest but is a dangerous and powerful weapon in the name of “free trade” for the 21st Century.

— BERNAMA

Conclusion Of TPP Negotiations On The Horizon