KOTA KINABALU, February 2, 2016:
Multi-lateral trade pacts are always difficult to negotiate. It took super
power America ten years to get 11 other countries on board. Some say that
the Trans-Pacific Partnership Agreement is an American agenda to re-assert
American leadership over the Trans-Pacific economies to counter the
growing China influence.
But, unlike what is portrayed by our MP for Kota Kinabalu, to join TPPA is
not to choose between America and China. Malaysia, like the other nine
members of ASEAN, is already covered by the China-Asean Free Trade Area
(China-AFTA) that took effect in 2010. The healthy trade (RM210 billion in
2014) between Malaysia and China will not be affected by TPPA. Our own
free trade pact, the Asean FTA, took effect in 1992. Ever since 1992 trade
tariffs among Asean countries (and ever since 2010 with China, India and
Japan) have been on a downward trend. 90% of trade is now zero-rated.
Sabah, as part of Malaysia, already has free trade pacts with our major
trading partners. This is good because the single, biggest economic
constraint facing Sabah is the smallness of our market. That is why we
have BIMP-East Asean Growth Area with a population of 57 million. Trade
pacts give us market access which we otherwise would not have.
When TPPA came along, no small country can ignore it. Each and every
country fought hard to get the best possible deal. Nobody wins all or
loses all. What would Sabah do if Sabah had full autonomy on international
trade? Would Sabah opt out of the TPPA?
TPPA have tough provisions on financial services, dispute settlement,
environment and labour standards, protection of intellectual property,
anti-corruption and other matters that might be challenging for some
sectors of our economy.
Sabah's biggest export item, which is also the Sabah government's biggest
revenue earner, palm oil, is not covered by any trade agreement with
America, the world's biggest economy. TPPA provides for the gradual
abolition of import tariffs of palm oil into America, Canada, Peru and
Mexico, the last four TPPA countries that still impose duties on palm oil
at up to 11% (America 6%). On the other hand, it will be several more
years before, Indonesia, our biggest palm oil competitor, can join TPPA.
Hence, Sabah's palm oil has a headway to penetrate TPPA markets before
Indonesia. Palm oil was Sabah's saviour during the Asian Financial Crisis
of 1997-98. The palm oil sector continues to support other sectors of the
Sabah economy with its multiplier effects. TPPA will benefit this sector.
These facts are completely opposite of what the MP for Kota Kinabalu said.
It is to be expected that both opposition and ruling party MPs dutifully
voted according to party lines on the TPPA bill in Parliament. But it is
important that our MPs understand what they are voting for or against.
By Datuk Yong Teck Lee, Sabah Progressive Party (SAPP) President