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As TPP Falters, Malaysia Needs To Bank On ASEAN
Datuk Wira Jalilah Baba By Zarul Effendi Razali and Rosemarie Khoo Mohd Sani
KUALA LUMPUR, Jan 24 (Bernama) -- With the withdrawal of the US from the Trans-Pacific Partnership (TPP), Malaysia should consider turning to ASEAN as a conduit to secure trade deals with countries from other continents.
Malaysian International Chamber of Commerce and Industry (MICCI) President Datuk Wira Jalilah Baba said as a pact, ASEAN would attract more attention from other countries in sealing bilateral agreements.
"Of course US withdrawal from the TPP has delayed the progress of 11 other TPP signatories. For now, we have to find the best way to make sure it does not affect our future plans," she told Bernama.
She was commenting on an executive order signed by US President Donald Trump to formally withdraw the US from the trade deal on Monday.
The signing of a free-trade agreement (FTA) individually will take a long time but with a bigger pact like ASEAN, it would be much easier.
Jalilah also urged the government to have a relook at the proposed Malaysia-US FTA for any new possible win-win arrangement with new US administration.
Meanwhile, Malaysian Institute of Economic Research (MIER) Executive Director Prof Dr Zakariah Abdul Rashid said Malaysia should not just confine itself to pursuing bilateral FTAs with relevant TPP members, but also with non-members such as Iran.
"Under the current scenario where the Western world is adopting a protectionist policy, Malaysia needs to explore the new markets to secure its export performance.
"One way to expand export is to be vigorous on having more bilateral FTAs, where this would enhance the country's trade flows," he said.
As Malaysia's economic size is relatively small, he said the country must be driven by external trade to achieve sustainable economic growth.
"We cannot rely on domestic demand to drive our economy. We need international trade to ensure a long-term growth for the country.
"Although it is challenging to have trade negotiations, it is the way forward to sustain our economy," Zakariah said.
On Jan 21, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Malaysia might look into the possibility of pursuing bilateral FTAs with relevant TPP members should the TPP agreement fail to materialise.
Meanwhile, MIDF Head of Research Zulkifli Hamzah said the US withdrawal from the TPP was expected and priced in by financial markets.
"For the remaining members of the TPP, the situation is still fluid and we have to wait for the formal announcement.
"It is possible that the 11 remaining members will proceed but leaders, for example, Shinzo Abe (the Prime Minister of Japan) has said that without the US, the TPP will not be meaningful," he said.
However, Zulkifli pointed out that the US remained an important trading partner for Malaysia even in the absence of the TPP.
"We are sure Trump recognises the merits of international trade. What Malaysia needs to do is to continue to engage the US government so that a win-win arrangement can be reached," he said.
In the first statement released by the US administration after Trump's inauguration on Friday, US declared that it would withdraw from the TPP in realising one of Trump's campaign pledges of putting American interests first.
In the statement entitled 'Trade Deals Working For All Americans', the White House has also declared a renegotiation of the North American Free-Trade Agreement (NAFTA).
"If our partners refuse a renegotiation that gives American workers a fair deal, then the President will give notice of the US intent to withdraw from NAFTA," it said.
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