TPPA study is ‘fatally flawed’

PETALING JAYA: A study that suggested Malaysia stands to lose out to other member countries under the Trans-Pacific Partnership Agreement (TPPA) is “fatally flawed” due to the researcher’s misunderstanding of trade data, according to the Organisation for Economic Cooperation and Development (OECD).

The OECD, in a letter to the International Trade and Industry Ministry (MITI), pointed out three “fatal” flaws in Rashmi Banga of the Indian Institute of Foreign Trade approach and analysis of a group of dataset compiled jointly by OECD and the World Trade Organisation (WTO).

This, OECD said, rendered any conclusion or findings of the report as unreliable, misleading or simply wrong.

“Her misunderstanding of the trade in value-added (TiVA) database leaves her results fatally flawed,’’ OECD head of trade and competitiveness statistics division Nadim Ahmad said in the letter dated Nov 20.

The US-led TPPA is an ambitious free-trade initiative that groups six countries on the western fringes of the Pacific, namely Malaysia, Brunei, Singapore, Vietnam, Australia and New Zealand and five on the eastern side of the ocean, i.e, the United States, Canada, Mexico, Chile and Peru.

It has a much wider scope than a free-trade agreement, but as all TPPA negotiations were held in secrecy, it has left a lot of room for speculation about its impact.

The whole text of the TPPA treaty will only be released after it is signed.

“Any impact study on TPPA should be more comprehensive, covering the impact on investment, the services sector and the impact of Malaysia’s integration into the global value chain,’’ MIDF Research head Zulkifli Hamzah said, suggesting that a study should also be done to analyse the impact on Malaysia not joining TPPA.

There is a strong push to end TPPA negotiations this year, but a similar deadline last year was missed.

But there are other trade pacts closer to home.

Experts, including those at the Asian Development Bank and the Khazanah Research Institute, have suggested that Malaysia puts in more focus on Asean-led Regional Comprehensive Economic Partnership (RCEP).

The RCEP is a proposed trade agreement between Asean’s 10 members and six other countries – China, Japan, South Korea, India, Australia and New Zealand.

It will cover a market with a combined size of about 45% of the world’s population and a third of global gross domestic product.

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Business , TPPA , OECD , WTO , Rashmi Banga


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