IT must have been really hard for the International Trade and Industry Ministry. With just one stroke of the pen on Monday, President Donald Trump officially killed the Trans Pacific Partnership Agreement (TPPA), an initiative for which the ministry had been working its socks off.
Still, Malaysia had to put on a brave front.
“It was not that shocking. We already expected it,” one TPP negotiator said curtly, obviously hiding his disappointment.
It has been five arduous years of work for the Malaysian team of negotiators. After the conclusion of negotiations, for a few short weeks, there was a triumphant feeling among the TPPA team especially after Parliament gave the green light for the TPPA motion, followed by the signing ceremony among the 12 countries in New Zealand last February.
The work did not stop there. The negotiators went into the next level – they started work on amending the laws as required under the agreement.
Just when things were going smoothly – or so they thought – the TPPA became a US election issue when presidential candidates Bernie Sanders, Trump and Hillary Clinton, too, sprang a surprise and voiced their opposition to the free-trade agreement (FTA).
Trump went one step further saying he would cancel the TPPA the day he stepped into office.
Not many took the threat seriously. In all honesty, how many people though thought Trump would be moving to the White House in January?
It was only on US election day last November that the fate of the agreement came into question.
On Tuesday, most of the other 11 partners were scrambling to contain the news of Trump putting the final nail in the TPP coffin.
Singapore, Australia and Japan, just like Malaysia, all announced they were seeking to salvage the trade pact.
The agreement under the present conditions for entry cannot take place without US participation because under the agreement, a minimum of six countries accounting for 85% of the combined GDP of the 12 members are needed. The US alone accounts for 60%.
In simple terms, the TPPA in its current form is dead in the water.
The question is, how do the 11 TPP countries (Australia, Brunei, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore and Vietnam) move forward. Can they even do so? Most countries are talking about consulting each other. And yes, it will be another year after the signing ceremony last February for the remaining countries to ratify or reject the pact.
One year ago, minister Datuk Seri Mustapa Mohamed indicated that 18 laws and regulations would be amended as part of the TPPA ratification process.
After Trump’s election, the minister said the final decision on the amendments would be made by the Cabinet.
So it is now back to the ministries involved whether they will want to go ahead with the amendments which covered areas like labour, environment and intellectual property rights (IPR).
One thing is for sure – the present administration needs to have a clear direction of Malaysia’s economic and trade agenda.
An official asked if the amendment of laws was done because of the TPPA or because the Government wanted to inject competitiveness into the economy.
“We shouldn’t be dictated by one or two FTAs. FTA is a mechanism for you to facilitate those changes. We need a clear direction of what we want to do.
“Do we want a high-income economy or high standard laws relating to areas like labour or IPR?”
Trade officials have long cautioned that Malaysia may lose out to the emerging economies in Asean if it does not keep up with the changing global environment.
“Vietnam is already way ahead and we are playing catch up. We do not want to find out one day that we are losing out to even Myanmar.
“Malaysia and our ministers must have the political will to adapt to changes. Perhaps by having a high standard FTA, we will be able to jolt some agencies and ministries to change as it is the only way to move forward.”
Australian Prime Minister Malcolm Turnbull said that the deal could be salvaged by encouraging China and other Asian countries to join.
“Losing the US from the TPP is a big loss, there is no question about that. Certainly, there is potential for China to join the TPP,” Turnbull said.
Much has been said about TPPA being a move to counter the growing influence of China and the Asean-led RCEP (Regional Comprehensive Economic Partnership) of which China is a part.
A Malaysian official poured cold water on the possibility of China being in the TPP.
“Will Beijing be ready to do away with state-owned enterprises, labour, environment and strong IP chapters?
“That (Australian) statement about inviting China is perhaps to put pressure on Trump. I don’t think it will work,” he said.
Trump is now making clear it is America first.
Just a week ago, the website of the US Trade Representative Office greeted visitors with: “TPP – Made in America – Get the facts”.
Today, the website declares: “America First Trade Policy – The Office of the USTR is committed to ensuring American workers are given a fair shot at competing across the globe. This new America First trade policy will make it more desirable for companies to stay here, create jobs here, pay taxes here and rebuild our economy.”
The message from the Trump administration is loud and clear.
It is not a question of moving forward for TPP partners. It’s a question of whether the other countries see any benefit in staying on, without the US.
In a statement on Tuesday, Mustapa credited Malaysian TPP negotiators with securing valuable concessions and protecting the country’s interests, and assured Malaysians that the country has a highly capable negotiating team.
Yet some ministries do not recognise these talents. While some have been promoted, a few have been sidelined despite five years of working their butts off and sacrificing family time to defend national interests.
Is it too much to ask the Government to realise the value of these negotiators?