FTAs are dead – but US, EU won’t rest in peace
Both the United States and its trade rival, the European Union (EU), have been forced to modify their strategy in South-east Asia in pursuit of their ‘free trade’ and ‘liberalisation’ agenda.
The Malaysia-US Free Trade Agreement (FTA) is effectively dead; negotiations had gone nowhere after eight rounds of talks. The Malaysian side was afraid of opening up access to government procurement contracts mainly awarded to bumiputera firms. The Americans, under the Obama administration, were worried that free trade would result in an influx of cheap goods into their country while American jobs are lost to low-wage countries.
We should be saying “rest in peace” to the FTA – but unfortunately, there’s no rest for the greedy. Enter the Trans-Pacific Partnership (TPP), as the US modifies its ‘free trade’ strategy. The US is now involved in negotiations with Australia, Brunei, New Zealand, Vietnam, Chile, Singapore and Peru under the TPP banner. The Americans want the TPP to grow into a regional FTA covering the 21 Apec countries. The first round of TPP talks was held in March in Australia.
Malaysia, through its ministry of international trade and industry (Miti), is interested in “exploring” the TPP but the same concerns remain: it would involve prising opening the services sector and government procurement.
Similarly, the Asean-EU FTA is all but dead. The EU shelved FTA talks with Asean after it found that conditions were “not conducive”.
