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Don't fear trade pacts as overall M'sia will benefit

Publication Date : 16-04-2014

 

Malaysians should not fear trade pacts the Government has or plans to enter into, says International Trade and Industry Minister Mustapa Mohamed.

He said trade was an important element of the Malaysian economy, as the country was the fourth most trade-dependent nation in the world.

“Closer economic integration is good for us. It brings in more opportunities and investments, which, in turn, mean more jobs,” Mustapa said during a visit to Menara Star yesterday.

Mustapa was commenting on fears and resistance by some quarters that pacts like the Asean Economic Community (AEC) and Trans-Pacific Partnership Agreement (TPPA) would put locals at the losing end.

“For instance, there is fear that the people in general will be deprived of jobs once the AEC kicks in next year and property prices will go up following the TPPA. These fears are unfounded.”

He added that the International Trade and Industry Ministry (Miti) had embarked on initiatives to engage Malaysians on these issues, given that the AEC was slated to be implemented as early as next year.

The AEC is Asean’s target to achieve a single economic market by end-2015, and allows free movement of skilled labour within Asean member countries.

The TPPA, meanwhile, is a proposed free trade agreement (FTA) involving 12 countries, including the United States, Malaysia, Singapore, Vietnam, Canada, Australia, Japan, Peru, New Zealand, Chile, Mexico and Brunei that has been ongoing for the past five years.

“There have been a lot of cross-border investments within Asean countries by some of our biggest corporations. For instance, the Genting group has a presence in Singapore and Indonesia, while the YTL group, which has a presence in Singapore, is looking to venture into Indonesia. We want more of this.”

On the TPPA, which Malaysia is still far from being ready to ink, Mustapa said the Government was spending a lot of time on it, as it was not like other FTAs.

He pointed out that the “Doha Round” of talks, launched by the World Trade Organisation seeking to overhaul the world trading system by setting a global framework of rules and tearing down barriers, was still ongoing after 13 years.

“We are not saying that no group will be spared,” he said. “There will be challenges and we need to adapt, but overall, the country will benefit from these trade pacts. As a trading nation, it is important for us to be part of the world.”

On whether the fallout from the missing MH370 jetliner has affected trade with China, he said it had not, pointing to the recent partnership between China’s Great Wall Motor Co Ltd and Go Automobile Manufacturing Sdn Bhd that had been given the first licence to manufacture energy-efficient vehicles in the country. The initiative will see an investment of 2 billion ringgit (US$615 million) over three phases until 2018.

“China is our biggest trading partner. China is good for us but, at the same time, we have to be more competitive, as this will push us to be a successful nation,” he said.

“Overall, we have done well in terms of investments and have been instrumental in resolving some of the issues like red tape and improving business processes.”

As for US President Barack Obama’s upcoming visit to Malaysia, Mustapa said Malaysia would engage America on various issues. “Malaysia is a country that likes to have good relations with all the countries in the world, but Asean is our priority. And whatever we do is consistent with our own priorities.”

On industries facing higher operational costs following the tariff hikes in petrol, power and gas, Mustapa said that “industries have to make the adjustments.”

“The longer there is a delay in raising these tariffs to reflect market prices, the more difficult it would be to make the adjustments. Also delaying this merely means that someone will have to pay a higher price later on. Malaysia is already spending some 20 billion ringgit ($6.1 billion) in subsidies,” he added.

 

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