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‘Devastating consequences’ if Malaysia ratifies CPTPP, says group against trade pact

‘Devastating consequences’ if Malaysia ratifies CPTPP, says group against trade pact

Ministers pose for an official picture after signing the rebranded 11-nation Pacific trade pact Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in Santiago, on Mar 8, 2018. (Photo: CLAUDIO REYES/AFP)

KUALA LUMPUR: Malaysia will likely face devastating socio-economic consequences if the government ratifies the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said a non-government organisation opposing the agreement.

Mr Mohd Effuan Aswadi Abdul Wahab, the coordinator for Bantah TPPA/CPTPP, claimed in a statement that Malaysia should not ratify the agreement as it may lose policy flexibility that has been shaped by a multi-ethnic society.

"Malaysia has a socio-political economic structure that is very sensitive, given the multi-ethnic nature of its society. We have huge inequalities between ethnicities and regions, and the Malaysian government needs sufficient space to implement policies to close the gap,” he said on Friday (Dec 21).

"Therefore, it would be far better for Malaysia not to ratify the CPTPP," he stated in response to a report titled "CPTPP is good for Malaysia, says think tank".

The article, published on Thursday, characterised the CPTPP as a high-quality agreement.

It also noted that the CPTPP requires the Malaysian government to be more open, transparent and competitive. It said the trade pact would put positive pressure on the government-linked companies (GLCs) sector.

Mr Mohd Effuan claimed the article did not portray the real issues that Malaysia would face if it chooses to ratify the deal.

"There are many challenges that Malaysia must face and the socio-economic consequences for Malaysia will be devastating,” he said, adding that the CPTPP was also really not about free trade as only six out of 30 chapters dealt directly with trade.

He said many chapters in the agreement would only benefit major corporations more than the well-being of the people.

"Some of the major chapters that are controversial are those on investment, investor-state dispute settlement and state-owned enterprises, to name a few," he explained.

Mr Mohd Effuan was also concerned that the GLCs would be restricted in the preferences that they can give to local small and medium enterprises (SMEs), under the state-owned enterprises (SOEs) chapter of the agreement.

"SOEs or better known here as GLCs have been instrumental in strengthening Malaysia’s economy and have proven their capabilities by assisting numerous local SMEs," he added.

Negotiated and signed on Mar 8, the CPTPP - which is a revived version of the Trans-Pacific Partnership following the United States' withdrawal - brings together 11 economies from both sides of the Pacific, representing 14 per cent of the global economy.

These 11 participating nations are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The CPTPP will enter into force on Dec 30, after the six-nation ratification threshold was reached.

Seven nations, Australia, Canada, Japan, Mexico, New Zealand, Singapore and Vietnam, have ratified the deal.

Under the trade regime, Singapore companies can look forward to reduced tariffs and greater market access.

READ: Singapore inks new TPP trade pact with 10 other countries: 5 things to know about the CPTPP

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