Malaysia joins Trans-Pacific Partnership trade negotiations
The Trans-Pacific Partnership (TPP) is a large-scale free trade negotiation that began in March 2010 and its visionaries hope it will one day include the United States and all other members of the massive Asia Pacific Economic Cooperation (APEC) bloc. So far, talks have included the US, Australia, New Zealand, Brunei, Singapore, Chile, Vietnam and Peru. Malaysia announced on 6 October that it too would join in.
Participants are keen to get some larger players on board. Japan’s Prime Minister Naoto Kan last week expressed an interest in joining, and South Korea is also on the wish list. Malaysia’s smaller economy might not be a top priority for the US, but its participation will certainly add value to the group and an agreement would produce benefits at home by eliminating duties on 12.4% of Malaysia’s exports and around 71% of its global trade would receive preferential treatment, according to the Ministry of Trade and Industry. Trade with current TPP participants was worth RM 285.8 billion (US$91.7 billion) in 2009, 28.9% of Malaysia’s total. Trade with the US and Singapore accounted for over 80% of that figure.
TPP participation would also encourage much-needed foreign investment from a wider variety of sources.
Malaysia’s previous attempt to negotiate a free-trade deal with the US faltered in 2007 as Malaysia expressed reluctance to open up its rice market and increase access to government contracts. More recently though, it was part of a China-ASEAN tariff-cutting agreement and is also negotiating independently on a trade deal with the European Union.
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