KUALA LUMPUR: Free Trade Agreements (FTAs) are of limited value to Malaysia, and the country is capable of growing economically successful without them, according to former premier Tun Dr Mahathir Mohamad.

“I have a different view from the government. I don’t think FTAs are useful. Without them we grew very fast — we were the 17th biggest trading nation in the world,” he said in a recent interview with Emmanuel Daniel, chief executive officer of The Asian Banker.

According to the former premier, the party proposing a FTA is inclined to view it in terms of the advantage that they could potentially gain from the FTA, rather than the benefits to their partners.

“The US sees TPPA [Trans Pacific Partnership Agreement] as an opportunity to open up the markets in countries like Malaysia. Yet, we don’t have enough to invest in the US, and we are not able to compete. We may gain some market access for our palm oil and things like that, but we have [successfully] grown without that market [in the past],” he said.

“I think an Asian marketplace will develop by itself — there was no very restrictive agreement [in the past],” he said, adding that China’s continued prosperity would provide mutual benefit in terms of trade.

Mahathir said that during his tenure, he found that inequality between rich and poor countries still existed despite the acceptance of FTAs.

“But after I stepped down, there were more FTAs that the government was persuaded to participate in,” he said, adding that conditions in FTAs like the TPPA are in many ways “restrictive” and render Malaysia vulnerable to disputes and litigation.

He pointed out that the country’s views on regionalisation came about simply because trade negotiations had failed and that it felt the need to protect itself since the introduction of the World Trade Organisation (WTO).

“Individual small countries cannot protect themselves against the likes of Europe and the US, so we proposed to have an East Asia economic community to give us some collective strength when going for WTO negotiations. That was the objective, not an association which ties us up to doing trade with each other under certain conditions,” he said.

He believes provided “they keep to the target and fulfil all the requirements”, Vision 2020 can be achieved. But he said placing excessive emphasis on per capita income as a gauge of the nation’s prosperity is unhealthy.

“If it were [about per capita income] then Saudi Arabia would be the best developed country. We need to have industries, better education, carry out research, and also look towards the arts,” he said.

This article first appeared in The Edge Financial Daily, on May 22, 2014.