At the Asia Pacific Economic Meeting in Vietnam which ended on Saturday, the Trans Pacific Partnership (TPP) members agreed to proceed with their trade pact minus the US.
What does it mean?
How will it affect the rakyat?
What is the TPP?
The TPP is a trade agreement between 11 countries to do more trade among themselves without being bogged down by taxes, non-tariff barriers and other issues.
With the TPP, countries such as Malaysia and Thailand will be able to sell cars in Japan without having to pay such a high tax.
Peru and Canada meanwhile can set up factories in Malaysia much easier to export their products in South East Asia.
That is the TPP.
With the TPP, Asia will be closer
Although the US has said that it will not participate, the TPP will no doubt strengthen closer Asian economic cooperation, integration and friendship.
This is very important as Malaysia is one of the world’s top 20 trading nations in the world.
Malaysia needs to be friends with everyone as it needs to do trade to grow its economy.
So the TPP is vital to forge economic relations between Malaysia and other countries to support our economy.
The TPP is still a big market
Eventhough the US is not participating, the TPP is still a big market commanding 65 percent of global gross domestic product, 51 percent of global trade and 53 percent of global foreign direct investment.
Datuk Seri Najib Razak said TPP is still very important minus the US as it fosters regional economic cooperation and integration which aims to distribute wealth to more people in the region.
This includes Malaysia and Datuk Seri Najib said there is more work to be done.
If Malaysia don’t join the TPP, we will be left behind
International Trade and Industry Minister Datuk Seri Mustapa Mohamad said our economy will be affected if the country did not join the TPP.
If the 11 TPP countries move ahead with or without the US, Malaysia will be left behind.
And that is the risk that Malaysia cannot afford to take.
So Malaysia should not miss out opportunities to strengthen trade and investments with member countries.
By being a TPP member, Malaysia can sell Proton cars in Peru, Mexico and Canada.
The benefits far outweigh the disadvantages.
TPP is to fight unfair trade
Malaysia has to join TPP to fight unfair trade.
If Malaysia do trade with a non-TPP member, the trade can sometimes be unfair.
This unfair trade is called non-tariff barriers.
As an example, Malaysia can buy beef from a country which is not a TPP member country.
Malaysia not only have to pay tax for the beef, we also has to buy tonnes of beef.
This additional requirement is called non-tariff barriers.
So it is better to be part of TPP where there is no non-tariff barriers.
The US may eventually join the TPP
Reuters reported on October 11 that eventually the US could join the TPP.
Japan’s Economy Minister Toshimitsu Mtegi said that it is hoped that one day the US might change its mind.
President Donald Trump might one day see the benefits of the TPP and finally be part of the TPP.
Malaysia can continue to persuade the US by showing how its economy has benefitted from the TPP.
How does the TPP benefit Malaysian companies
Malaysian companies can definitely benefit from the TPP.
As an example, if a company from Banting sell rubber gloves.
The company can easily set up a factory in Peru.
This is because Malaysia is a TPP member.
If Malaysia is not a TPP member, it will not be easy to open a factory in Peru.
So that is why companies must support the TPP.
Otherwise Malaysia and the rakyat will be left out.
What does the TPP mean to the rakyat
The new TPP will no doubt benefit the rakyat in the future.
As an example, if Japan wants to set up a new Toyota factory in Malaysia, it will be able to do so with ease.
The factory will then need workers and the rakyat can apply to be its workers.
The rakyat will then be able to support their families and earn an income.
All this will be good for the economy.