After five years and 19 rounds of negotiations, 12 Pacific-Rim countries will finally seal the much-debated mega trade pact, the Trans-Pacific Partnership Agreement (TPPA) in Auckland, New Zealand on Thursday, Feb 4.
The deal, which represents nearly 40 percent of global gross domestic product (GDP) worth US$30 trillion, is set to facilitate further growth in the 12 participating nations namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam.
TPPA is projected to yield higher overall GDP growth for the countries with the expansion of markets and removal or reduction of trade barriers.
The TPPA comprises 30 legal chapters that cover trade and trade-related issues that goes beyond providing market access to goods, services and investments, to also harmonising rules and disciplines for new and emerging trade and cross-sectoral issues such as government procurement.
Hence, besides boosting trade and investment, the deal is also aimed at creation and retention of jobs, enhancing innovation, productivity and competitiveness and raising living standards for about 800 million people.
Malaysia, which joined the comprehensive 21st century free-trade deal in the third round of negotiations in October 2010, will see its GDP increase by US$107 billon to US$211 billion over 2018-2027.
Malaysia became the ninth prospective member of the TPPA at its meeting held on the sidelines of the APEC leaders’ meeting in Honolulu in 2011. Negotiations for the deal were concluded on Oct 5, 2015.
Investments for Malaysia are projected to rise by US$136 billion to US$239 billion over 2018-2027 - attributable largely to higher investment growth in the textile, construction and distributive trade.
Export-oriented firms will benefit from greater market access, especially with countries that Malaysia has yet to have a trade pact namely Canada, Mexico, Peru and the United States.
These four countries account for about 74 percent of the market size of the TPPA economic bloc, with a GDP of about US$21 trillion as of 2014.
Towards liberalising Malaysia's trade further, International Trade and Industry Minister Datuk Seri Mustapa Mohamed assured that the country's economy would not be "colonised" by other countries under the deal.
He said Malaysia's participation in the TPPA would not just bring major benefits to the country's economy but also in other areas such as strengthening small and medium enterprises.
Safeguarding Bumiputera interest in the TPPA is one of the most significant achievement for Malaysia.
"We have joined this agreement (TPPA) on our terms and with affirmative action policies enshrined in an international treaty," Prime Minister Datuk Seri Najib Razak had said recently.
The government had struck a good deal and Malaysian investors should be rest assured that they are protected with the investor-state dispute settlement (ISDS) provision in the TPPA, said Business School Dean at the Malaysia University of Science and Technology Dr Yeah Kim Leng.
Going forward, Malaysia should also focus on the investment chapter besides trade, to expedite its development and road to becoming a high-income nation.
He said Malaysia was the third largest recipient of foreign direct investment in ASEAN and TPPA would be another platform to boost its competitive edge among its regional peers in welcoming further investments.
Bernama
Wed Feb 03 2016
TPPA is projected to yield higher overall GDP growth for the countries with the expansion of markets and removal or reduction of trade barriers.
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