Malaysia cannot turn its back on trade and liberalisation
Kevin Fernandez, The Malaysian Insider
Anti-trade groups have become more vocal in Malaysia in recent times, especially with heightened coverage of Malaysia’s involvement in the Trans-Pacific Partnership Agreement (TPPA).
They straddle both sides of the political divide, from organisations like Bantah-TPPA to the Malay Economic Action Council (MTEM).
Their criticism of free-trade deals like the TPPA are wide-ranging. Groups like MTEM express concern over what they will do to Malaysia’s sovereignty, believing that the TPPA will block the government’s ability to undertake measures like capital controls and affirmative action.
Other groups worry that the TPPA will erode labour rights and environmental standards as well as access to generic medicines.
These are major concerns, and regrettably, the public has been given very little concrete information on how Malaysia can avoid these problems if it takes part in the TPPA.
However, it will be a real shame if Malaysia exits the TPPA and other FTAs as some of these groups have called the government to do.
Indeed, groups like MTEM would roll back the process of economic liberalisation that Prime Minister Najib Razak had embarked upon altogether.
This is unfortunate as trade is nothing new to Malaysia.
Trade has always been Malaysia’s lifeblood, from the days of the Malacca Sultanate.
It has moulded not only our economy – where exports still make up almost 83% of our GDP – but also the shape of our unique society.
We must also bear in mind that current realities mandate that Malaysia must continue to remain attractive to investors.
A recent report from Moody’s Investor Services that Malaysia is vulnerable to a weakening Chinese economy should be instructive.
China is an important investment and trading partner for Malaysia. Chinese investors are expected to pump US$2 billion (RM6.37 billion) into Malaysia this year.
Bilateral trade last year stood at US$106 billion, making China our single largest trading partner for five years running.
However, there are signs that China’s economy is slowing down: last April, it was reported that real GDP growth for 1Q2013 was 7.4%, just over the official target of 7.5%.
Southeast Asia – and Malaysia in particular – cannot put all its eggs into one basket.
We must continue to liberalise and reform our economies so that we will be able to withstand any blowback from a downturn in China.
Indeed, competition is going to be fiercer in the region anyway thanks to the coming of the Asean Economic Community in 2015.
If Malaysia is to remain competitive, we cannot remain outside trade deals like the TPPA – which will be one of the largest of its kind.
