Malaysia needs to strike a balance in trade pacts

Interview with ASEAN Business Advisory Council member, Tan Sri Dato’ Dr. Mohd Munir Abdul Majid

KUALA LUMPUR: Malaysia’s strategic interest in the region is best served by not being dependent on any one country where trade pacts are concerned.

CIMB Asean Research Institute chairman Tan Sri Munir Majid (pic) said the country could not rely on either the US-led Trans-Pacific Partnership (TPP) or the Regional Comprehensive Economic Partnership (RCEP), perceived as a China-dominated trade pact.

He pointed out that Malaysia needed to achieve a balance and not be “overwhelmingly dependent on one country”, and therefore, membership of one does not exclude membership in the other nor less focus on the Asean Economic Community, which would be “realised” at the end of the year.

“We must identify what our strategic interests are,” Munir said at a forum organised by the Institute for Democracy and Economic Affairs. He was part of a three-person panel that included US Trade Representative Michael Froman and the Employees Provident Fund (EPF) economics and capital markets head Nurhisham Hussein.

However, Munir said accession to the TPP, considered as a “gold-standard” trade agreement of the 21st Century, would make Malaysia more transparent, as the pact covered investment and trade in goods and services, as well as competition policies, the environment, intellectual property rights, investment rules, labour standards and the role of state-owned enterprises (SOEs).

“The TPP or anything else that can bring more transparency is a good thing,” he said.

But public perception of the pact remains negative, with the forum disrupted by two protestors from a patient-advocacy group, who unfurled a banner protesting against the perceived threat that the pact would bring to medicine costs. In fact, the request by Malaysia for tobacco to not be a part of the TPP negotiations and fears over the higher cost of medication dominated the floor at the forum, with participants railing against the lack of transparency, a common perception of the TPP talks.

Other contentious issues, which have been noted before and remain on the table, include the role of SOEs in Malaysia’s economy, with the Government asking for more flexibility, as these firms played dual economic and social roles.