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TPPA – How it may affect Malaysia?

President Obama has concluded negotiating the TPPA and will now work with Congress to secure its passage into law.  Upon the execution of TPPA, it will eliminate over 18,000 taxes various countries put on Made-in-America products. “With the TPP, we can rewrite the rules of trade to benefit America’s middle class. Because if we don’t, competitors who don’t share our values, like China, will step in to fill that void.” , a statement published by the WHITE HOUSE emphasizes its importance.

President Barack Obama


The Trans-Pacific Partnership Agreement (TPPA) is a multilateral trade agreement which currently involving 12 countries, namely the United States, Australia, Japan, Mexico, New Zealand, Singapore, Malaysia, Vietnam, Peru, Chile, Brunei Darussalam, and Canada.  TPPA is expected to open an access into a market of 800 million people, with a combined GDP of almost USD30 trillion.


According to the cost-benefit analyses (CBAs) report done by PwC Advisory Services Sdn. Bhd, by participating in TPPA,  Malaysia will achieve a gross domestic product (GDP) cumulative gain of USD107 billion to USD211 billion over the period 2018 to 2027, which contribute to the increase of GDP growth by 0.60 ~ 1.15 percentage points.  The report also predicts that Malaysia will suffer a cumulative GDP loss of USD9 – USD16 billion over the same period, if not participated in the TPPA.


There are four key priorities in assessing any trade deal under TPPA –  improved market access, a level competitive playing field, ease of cross-border data flows, and regulatory transparency.  By participating in TPPA, Malaysia will gain its benefits in plantation, timber and wood , electrical and electronic (E&E) and the textile and garment industries.


The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) reiterate its recommendation to form a high-level private-public committee to explore further the effects and impacts of the terms of TPPA, and look at ways to promote trade and investments and enhance the participation of Malaysia’s businesses.   There are now more opportunities for SMEs as there will be lower costs arising from greater tariff elimination and the effectiveness of internet and e-commerce as well as lowering of non-trade barriers.


According to ACCCIM, it is vital for SMEs to transform to be more versatile and adaptable to market changes.  The TPP initiatives also introduce new features and rules on e-commerce and telecommunications.  These new rules are timely and essential considering that the e-commerce and electronically transmitted digital products and services are the new frontiers in facilitating efficient business transactions in the future.

On Intellectual property (IP), it plays vital role in a developing high-value and knowledge-based Malaysian economy, except for the contentious issue of the general public on pharmaceuticals.  ACCCIM viewed the standards adopted in different types of IP (e.g. patents, copyrights and trademarks, etc.) can provide businesses with more assurance as they invest in more innovative products and services.


On the other hand, The Belt and Road initiative is initiated by the government of the People’s Republic of China without signing any agreement with other countries along the regions.  These countries within the regions are freely to join and to tap onto the initiative to benefit from it.



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