TPP and Its Impact on Malaysia
The Trans-Pacific Partnership (TPP) is a proposed trade agreement between twelve Pacific Rim countries including Malaysia, Vietnam, Singapore, Australia, the United States, Mexico, Canada and others. It seeks to lower trade barriers such as tariffs, establish a common framework for intellectual property, enforce standards for labour law and environmental law. TPP is huge because the countries involve produce 40% of global economic output.
Is TPP Good for Malaysia
The net benefit to Malaysia is debatable. While some quarters have argued that the TPP will offer developing countries like Malaysia and Vietnam greater access to markets across the world, others argue that it will open the door to biased arbitration favouring corporate interests above the government’s and restrict access to important goods such as cheaper medication.
Government Interests and Concerns
Independent economist Lee Heng Guie said while increased market accessibility and lower tariff barriers would enhance trade, the extent to which the Malaysian government is willing to compromise on its interests in areas such as government procurement, affirmative action policies, state-owned enterprises (SOEs) and investor state dispute settlement remains unclear.
Benefits to the People
Malaysian consumers will see lower prices of goods and services as there will be varied influx in the domestic market, it will also compel companies here to increase the quality of their goods and services while lowering prices, as competition increases. No doubt some companies that are unable to compete in terms of efficiency, quality and productivity, will fold under increase competitive pressure.
TPP Impact on Industries
The sectors that stand to benefit from the TPP agreement are electrical and electronics (E&E), rubber, palm oil, timber and automotive components due to lower tariffs on exports to US.
TPP poses a risk to all drug makers based in Malaysia as TPP agreement will extend the exclusivity period of new drugs. Not only will generic drug producers from Malaysia suffer, so too will consumers, as longer patent protection will result in higher drug prices and longer waiting period for cheaper, generic drugs.
Proton, our national car, may also lose their market share due to increased competition posed by carmakers from the US.
Full article – The Edge Financial Daily, October 12, 2015.
October 12, 2015 / /