Malaysian government launches cost-benefit studies of TPP

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malaysia tpp protestConcerns in Malaysia over joining the Trans-Pacific Partnership (TPP) free trade agreement have prompted the Malaysian government to launch two cost-benefit studies that could significantly delay completion of the 12-nation agreement, which was expected by the end of this year, officials announced this week. One of the studies will focus on the overall impact of the TPP on the national interest, and the other will evaluate the potential impact of the agreement on indigenous small and medium-sized companies.

The TPP would be the largest free-trade agreement in the world, and would include Japan, the US, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The Malaysian government has been under increasing pressure from public-interest organizations and trade groups to tread carefully in these negotiations and ensure that Malaysia’s sovereignty and economic interests are not impaired.

Over 50 groups, including the Malaysia Economic Action Council and the Malaysia Aids Council, have banded together to assert pressure on the government under the name “Bantah,” which means protest. Their concerns center mostly around the effect on the population of a sudden reduction or elimination of subsidies to state-owned and state-favoured companies, including a popular government program to provide cheap pharmaceuticals. Compliance with free-trade provisions of the TPP could mean a dramatic rise in the cost of such subsidized goods.

In response to Bantah, the Malaysian Ministry of International Trade and Industry (MITI) released a statement saying, “[t]he Cabinet is unanimous that Malaysia will not agree to any proposal that will deny access to affordable medicines and health care. The Cabinet also took note of the request to exclude tobacco and tobacco products from the TPPS.”

The resolution of these concerns might be very difficult to accomplish, because in all likelihood the TPP would mean a rise in the prices of certain goods. On the other hand, it would also mean a reduction in the prices of other goods as competing foreign goods entered the domestic market in greater numbers, driving prices down.

Also, crucially, the anticipated result of the TPP is more money in the pockets of Malaysian consumers as foreign markets assimilate more Malaysian exports. The challenge for pro-TPP Malaysian lawmakers is to get citizens to think of free trade as a situation in which everyone wins – a rising tide that lifts all boats, as opposed to a zero sum game. If Malaysian lawmakers cannot get this message across, and the cost-benefit studies add fuel to the fire, Malaysia may not join the TPP after all.

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Reading Time: 2 minutes

Concerns in Malaysia over joining the Trans-Pacific Partnership (TPP) free trade agreement have prompted the Malaysian government to launch two cost-benefit studies that could significantly delay completion of the 12-nation agreement, which was expected by the end of this year, officials announced this week. One of the studies will focus on the overall impact of the TPP on the national interest, and the other will evaluate the potential impact of the agreement on indigenous small and medium-sized companies.

Reading Time: 2 minutes

malaysia tpp protestConcerns in Malaysia over joining the Trans-Pacific Partnership (TPP) free trade agreement have prompted the Malaysian government to launch two cost-benefit studies that could significantly delay completion of the 12-nation agreement, which was expected by the end of this year, officials announced this week. One of the studies will focus on the overall impact of the TPP on the national interest, and the other will evaluate the potential impact of the agreement on indigenous small and medium-sized companies.

The TPP would be the largest free-trade agreement in the world, and would include Japan, the US, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The Malaysian government has been under increasing pressure from public-interest organizations and trade groups to tread carefully in these negotiations and ensure that Malaysia’s sovereignty and economic interests are not impaired.

Over 50 groups, including the Malaysia Economic Action Council and the Malaysia Aids Council, have banded together to assert pressure on the government under the name “Bantah,” which means protest. Their concerns center mostly around the effect on the population of a sudden reduction or elimination of subsidies to state-owned and state-favoured companies, including a popular government program to provide cheap pharmaceuticals. Compliance with free-trade provisions of the TPP could mean a dramatic rise in the cost of such subsidized goods.

In response to Bantah, the Malaysian Ministry of International Trade and Industry (MITI) released a statement saying, “[t]he Cabinet is unanimous that Malaysia will not agree to any proposal that will deny access to affordable medicines and health care. The Cabinet also took note of the request to exclude tobacco and tobacco products from the TPPS.”

The resolution of these concerns might be very difficult to accomplish, because in all likelihood the TPP would mean a rise in the prices of certain goods. On the other hand, it would also mean a reduction in the prices of other goods as competing foreign goods entered the domestic market in greater numbers, driving prices down.

Also, crucially, the anticipated result of the TPP is more money in the pockets of Malaysian consumers as foreign markets assimilate more Malaysian exports. The challenge for pro-TPP Malaysian lawmakers is to get citizens to think of free trade as a situation in which everyone wins – a rising tide that lifts all boats, as opposed to a zero sum game. If Malaysian lawmakers cannot get this message across, and the cost-benefit studies add fuel to the fire, Malaysia may not join the TPP after all.

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