Dear friends and colleagues,
The Malaysian government has now set its sights on the Regional Comprehensive Economic Partnership (RCEP) and apparently turned away from the Trans-Pacific Partnership Agreement (TPPA), lauding the potential benefits the former has in store for the country and the region as a whole.
As reported in The Star newspaper on 14 March, 2017 (I), Minister of International Trade and Industry Mustapa Mohamed told Parliament’s Dewan Rakyat that the government is no longer ‘keen’ to salvage the TPPA deal with the other 10 nations after the United States pulled out of the trade pact.
“We are not interested in pursuing the TPPA as it does not meet our primary objective of gaining access to markets such as the US, Canada, Mexico and Peru. The RCEP is seen as the second-best option as it will help fill the vacuum to a certain extent,” Mustapa told the Dewan Rakyat on Monday, 13 March, 2017.
While the RCEP could not be a complete replacement of the TPPA, Mustapa said further, the agreement between the 10-member ASEAN and China, South Korea, Japan, India, New Zealand and Australia account for 30% of global trade and include the 1.3 billion-strong population of China.
The 16 countries involved in the RCEP account for a total population of 3.4 billion people, accounting for almost 50 percent of the world’s population.
In an earlier report (II) by state news agency Bernama (9 March, 2017), Deputy Minister of International Trade and Industry Ahmad Maslan listed five benefits of the RCEP, namely, that
Ahmad also pointed out that among the differences between the RCEP and the TPPA signed in February last year between Malaysia, the United States and 10 other countries in the Asia-Pacific was the absence in the RCEP of chapters specific for government procurement, labour and the environment.
Opposition Member of Parliament Charles Santiago (DAP-Klang), however, pointed out that Ahmad was originally supposed to address whether the Malaysian government had deliberated to carry out a cost-benefit analysis of the RCEP, particularly in relation to small-medium-industries (SMI).
According to the parliamentary Hansard of the day’s proceedings on 9 March, the deputy minister had only made reference to two studies on the economic integration of ASEAN countries with their six trading partners under RCEP.
The study had taken three years to complete, said Ahmad, and had recommended generally for ASEAN economic integration to contribute towards improving the economic development of the region. Upon completion, the final study was presented to the heads of ASEAN governments.
Santiago pointed out that the deputy minister had not answered the question posed. “I raise this issue because the government should not be repeating the mistake it had made in the TPPA, as the cost-benefit analysis of the TPPA was done after the agreement had already been reached.
He stressed that, “This is not a smart process. Before we go to war, we must know the advantages and disadvantages (of the steps taken). For this reason, I propose that the government carry out a cost-benefit analysis so that we can defend the national interests, especially in relation to small and medium industries. ... I am sorry, but the government – the Right Honourable Minister has not answered my question. Has the Government of Malaysia carried out a cost-benefit analysis to protect Malaysia’s small and medium industries? That is the question, not whether ASEAN has carried out research, and so on.”
With best wishes,
Mustapa: RCEP is next best option to junked TPPA
14 March, 2017
THE Regional Comprehensive Economic Partnership (RCEP) is the next best option to boost trade after the Trans-Pacific Partnership Agreement (TPPA) fell through.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Malaysia is not keen to salvage the TPPA with the other 10 nations after the United States pulled out of the trade pact.
“We are not interested in pursuing the TPPA as it does not meet our primary objective of gaining access to markets such as the US, Canada, Mexico and Peru.
“The RCEP is seen as the second best option as it will help fill the vacuum to a certain extent,” he said when replying to a question by Dr Tan Seng Giaw (DAP-Kepong) in Dewan Rakyat yesterday.
However, he said that the US remains an important trading partner.
“The US is the third largest trading partner with Malaysia with trade increasing by 50.3%.
“Besides this, we have approved US investments totalling RM95bil, which accounts for some 300,000 jobs,” he said.
He added that 60% of manufactured electronic and electrical goods here were exported to the US.
Although Mustapa acknowledged that RCEP could not be a complete replacement of the TPPA, it accounted for 30% of global trade.
He added that RCEP had a larger population base as it included China with a 1.7 billion population.
Mustapa said Asean trade ministers would meet in Vietnam this May to discuss the RCEP with the aim of concluding an agreement by the end of the year.
“We are looking at a concept of Asean centrality where it will play the prime role in driving the RCEP,” he added.
Apart from RCEP, Mustapa said Malaysia is also negotiating free trade agreements with Iran, Sri Lanka and the European Union.
RCEP involves 16 countries, namely the 10 Asean countries and its six dialogue partners Japan, India, China, New Zealand, Australia and South Korea, which has a combined population of 3.4 billion.
RCEP to provide better access, market liberalisation to Malaysia
March 09, 2017
Malaysia would enjoy better access and market liberalisation under the Regional Comprehensive Economic Partnership (RCEP) than the commitments under the ASEAN Free-Trade Agreement (FTA), the Dewan Rakyat was told today.
Deputy International Trade and Industry Minister Datuk Ahmad Maslan said RCEP benefits included coordination and standardisation of rules and procedures that were now different for each ASEAN FTA and six dialogue partners -- China, India, New Zealand, Australia, Japan, and South Korea.
"With RCEP, the private sector would be able to save costs and reduce time in their business dealings," he said when replying to a question from Charles Anthony R Santiago (DAP-Klang) on the cost benefit analysis of RCEP on Malaysia's economy.
Ahmad said RCEP would also open up opportunities for local businesses to obtain raw materials of good quality at cheaper prices, which could be applied to assess the Rules of Origin compliance.
He said RCEP would help ease the integration of companies in this region in the global value change, making businesses more competitive at the international level and spurring them to become global players.
"RCEP would become the first trade agreement between China and India, and provide opportunities for Malaysia and other ASEAN countries to widen their exports and services to both markets," he said.
He said RCEP negotiations were important to gain market access for Malaysian products as the grouping was home to 3.3. billion people, accounting for almost 50 per cent of global population.
Responding to a supplementary question from Datuk Seri Bung Moktar Radin (BN-Kinabatangan) on the difference between RCEP and the Trans-Pacific Partnership (TPP), Ahmad said RCEP covered a larger market size than TPP's 800 million people.
Unlike the TPP, he said RCEP would not encompass matters concerning government procurement, environment or labour.
"RCEP has been negotiated 17 times at the official level and six times at the ministerial level.
Another five negotiations at the official level and one at the ministerial level are scheduled for this year," he said, adding that the ministry hoped RCEP would be finalised this year.