Imagining Asia without the US

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Demonstrator holding up a placard during a protest against Malaysia's participation in negotiations for the Trans-Pacific Partnership agreement in Kuala Lumpur. — AFP file photo

Demonstrator holding up a placard during a protest against Malaysia’s participation in negotiations for the Trans-Pacific Partnership agreement in Kuala Lumpur. — AFP file photo

MALAYSIAN companies hoping to sell more of their products to the United States of America, Canada, Peru and Mexico will be disappointed if the TPPA (Trans Pacific Partnership Agreement) is to be scrapped altogether.

Chances are that it will be aborted if Trump, the President-Elect, sticks to his guns. That’s what many people think. I have this uncanny feeling that there’s a slim possibility of a 180 per cent turnaround when the man of the hour is finally installed in the White House next month.

Through the many windows of the House, he can better assess the immense scope for opportunity for American leadership in world trade. And as this part of the world has been vital to its national interests long before the rise of China, do you think that the Sheriff can simply turn away from this area? Even President Trump can be realistic if he wants to, that is, if he wants the United States to continue assuming the post of the Sheriff of Asia. A new power in the area can be a friend or a foe; a friend is definitely better than a foe. And who’s that? You know whom I mean.

For the turnaround, let’s keep our fingers crossed. Keep the trump card close to your chest.

For Malaysian businessmen, the prospects of breaking new ground in the Americas will remain bright; through Malaysia’s membership of the 12-nation common market, we would be able to penetrate into a larger market with lower tariffs for our products such as timber, palm oil, rubber and oil and gas.

The search for a larger trade area is not a new idea. Remember the old Trans Pacific Strategic Economic Partnership Agreement initiated in early 2005 by Singapore, Brunei, Chile and New Zealand? This was the precursor to the TPPA before the USA seized the opportunity to play a role in an area inhabited by almost three billion people, if you include China. The TPPA countries alone are worth RM100 trillion, if you add up all their GDPs.

Malaysia suddenly saw a lot of business opportunities if we became a member of the club. So in 2010 we agreed to participate in the TPP talks with the right of opting out if nothing would benefit us. Despite all the initial home-grown misgivings about our participation, the government remained optimistic of a favourable outcome. Though it was a bit of a gamble, it was ‘no venture no gain’ exercise.

It was also known to all potential partners, even well before the presidential election, that the US Congress had signalled that it would not be easy for the TPPA to be approved at that level. It was worth a try to peep into the networking of a dozen countries at our doorsteps.

Anyway, whatever happens to TPPA, our teams of negotiators must be congratulated for trying their best to get a lot of what we had bargained for. If the TPPA is beyond salvation at all, do not consider the time and expenses involved as going to waste. In the course of those many discussions, our negotiators managed to acquire knowledge and techniques, which may be useful for future negotiations in the event of an alternative plan to TPP. Who knows?

My gut feeling, based on uncanny optimism in human frailties, is that this 12-nation trading arrangement will get a second look by the new US administration. If anything, it’s the China factor that may make America, the Sheriff, fall back on its Asian pivot. Its interests – economic, political and security – are too great to ignore. Imagine missing his sight in a volatile part of the world. Who is going to patrol the South China Sea?

So I would not be surprised if the USA would eventually sign on the dotted lines of the Partnership Agreement; perhaps, in a form somewhat diluted to save the American Face. Some changes acceptable to the USA and the other countries may be necessary from the existing format. Failing that, the TPPA is as good as doomed, for the USA.

But this is not the end of the road for the other potential partners in TPPA. They will have to carry on without the USA as a partner only; they can work out amongst themselves another arrangement or to have separate agreements with one another – bilaterally or trilaterally. The USA can still be hopping around and be a useful ally of the rest. After all, all economies are interdependent of each other, like it or not.

Life without the USA

Life without America as a partner in the 12-nation pact will be managed. There already exist other trading arrangements such as the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area to fall back on, in addition to the numerous agreements entered into by individual trading partners of many years’ standing.

And never forget China – this economic giant with a billion plus mouths to feed every day. From Malaysia’s vantage point, if only each Chinese family could afford to buy an ounce of Malaysian palm oil daily, we would soon run out of palm oil for ourselves. Then we may have to buy soya bean oil or corn oil from America. Shall we tax the imports of those heavily?

We have not enough palm oil left for sale to India, Pakistan and others. So forget about Peru or Mexico or Canada or the US for the time being. Let them use their own corn oil and soya bean oil. They do not know what they are missing!

Supposing the TPPA is aborted, what impact will this event have on the small and medium companies in Malaysia, and more importantly, on the ordinary consumers. For us America remains a trading partner as usual. So there will be no drastic difference in our dealings with the American companies. We will have more of the same.

Our small and medium companies will continue competing with big players as has always been the case, so it will be business as usual. For instance, the cost of medicines and hospitalisation remain high. We may have to resort to the service of the bomohs.

The GST will remain a burden to the poor. Country first. Without GST, our economy cannot be sustained for a long time. Everybody who eats has to pay the tax so that our economy can survive for many more years. With or without TPPA.

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