Kuala Lumpur,15 January 2019- IDEAS has called for rapid ratification of CPTPP. Presenting at a public workshop, Laurence Todd, Director of Research and Development at IDEAS argued that CPTPP will bring benefits that merit ratification. This is now further strengthened by the fact that the deal is now in force in six countries – and from today in Vietnam, opening up the risk that new trade and investment opportunities are directed to Vietnam. More broadly, Laurence argued that some opponents of CPTPP want to retain pursue state-led, protectionist policies which are not in Malaysia’s long-term interest. Ratification of CPTPP would, therefore, send an important signal about Malaysia’s ongoing openness to trade and investment.
IDEAS views on the issue of CPTPP were provided in an IDEAS Brief, entitled “CPTPP: The Case for Ratification” and presentation given at an IDEAS workshop. The main points are that:
- Given the volume of legislation that needs to be amended in order to ratify the deal, even if the government made an immediate decision, ratification is unlikely in the first half of 2019 and could drift much further;
- The benefits of the deal – although modest – are significant, and legitimate concerns with the deal, including with respect to ISDS, IP, GLCs and procurement can be addressed to large extent;
- There is an opportunity cost that it is important not to ignore – from today the deal is in force in Vietnam and as more time passes the risk that trade and investment are diverted will continue to grow. In the long term, Malaysia will lose influence over the accession of new members, including the return of the US.
- Perhaps more important is what CPTPP reveals about the governments wider direction of travel on the economy – business as usual or genuine reform? The reforms envisioned by the CPTPP are consistent with the government’s own manifesto commitments on GLCs and procurement.
- IDEAS urges the government to set a clear timeline to ratify CPTPP in 2019.
Speaking at the workshop Ali Salman, CEO at IDEAS said that: “The benefits of CPTPP are significant and the deal should be ratified on that basis alone. There are legitimate concerns but they are addressed by the various exceptions included in the agreement. More important though is that the government demonstrates it is committed to a coherent economic strategy based on trade, investment and entrepreneurship, rather than the old model of patronage and preferences. Ratification of CPTPP would put the government on the right path.”
*The paper can be downloaded here