By Stephanie Jacob
Wong Chen
PKR members of parliament (MPs) Wong Chen and Gooi Hsiao Leung have called on the Foreign Affairs Minister Anifah Aman to explain the geopolitical issues behind the Trans-Pacific Partnership (TPP) agreement.
Wong Chen opined that the cost-benefit analysis done by PricewaterhouseCooper (PwC) suggested minimal economic gain for Malaysia and said it was therefore geopolitical issues which were driving the government to sign the deal.
“The difference between signing and not signing the TPP agreement is a mere 0.22% differential in gross domestic product (GDP) growth,” Wong said. Even under PwC’s best-case scenario forecast where 50% of non-tariff measures are removed, the difference between signing and not is only 1.15% per annum while export will grow 0.9%, he added. Furthermore PwC has said Malaysia’s trade balance would decrease by 30% should Malaysia sign on to the agreement, he highlighted.
The MP said that while it is normal for countries to give up some measure of sovereignty when signing on to any free-trade agreement, in the case of the TPP, the trade-off between the economic gains and the sovereign power Malaysia will have to cede was not worth it.
“What wealth is being offered to sell our Malaysian soul? The PwC report states not much, just a few lousy dollars,” said Wong Chen.
To recap, PwC had said that Malaysia’s participation in the TPP agreement is projected to deliver nett economic gains, with GDP to increase by US$107 billion (RM452.9 billion) to US$211 billion from 2018 to 2027, said PwC.
The PwC study had forecast that the trade balance will contract while remaining in surplus over the next decade (2017-2027).
PwC said: “The size of the trade surplus will be smaller at between US$29.7 billion to US$35.1 billion, compared to the baseline scenario of US$41.9 billion where TPP does not exist. The 2027 surplus position post-TPP participation will remain larger than the 2014 surplus position of US$26.1 billion.”
Should Malaysia not participate in the agreement then the trade balance is projected to remain largely unchanged from the baseline scenario, said the study. Nonetheless the share of trade surplus to GDP is projected to be lower whether or not Malaysia participates in the TPP agreement.
PwC said: Trade balance as a share of GDP is projected to be lower at (between) 4.3% to 5.3% in 2027 post-TPP participation, compared to the baseline scenario of 6.5%. It is, however, notable that the share of trade balance to GDP in 2027 is projected to be smaller relative to the 2014 share of trade balance to GDP of 7.5%, even in the baseline scenario where TPP does not exist.”
MP Gooi meanwhile questioned the intelligence of signing on to a trade deal which might sideline China. He said that Malaysia had always avoided taking sides in the geopolitical tussles of the superpowers and asked why the Najib Razak administration seemed to be deviating from that stance.
“Today China is an emerging superpower. It’s recent activities in the South China Sea are raising alarm bells. However China is also now our number one trading partner. What should be our foreign policy moving forward?” questioned the MP.
Gooi called on Foreign Affairs Minister Anifah to provide answers on the government’s geopolitical stance with regard to the TPP agreement.
He said: “I demand that Foreign Affairs Minister Hanifah Aman give us clear answers on Malaysia’s geopolitical stance. If the TPP agreement does not benefit us economically, then (tell us) how does it benefit us geopolitically? …Hanifah should also explain what geopolitical factors are motivating him to pursue the TPP agreement.”
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