Friday 29 Mar 2024
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KUALA LUMPUR (Jan 11): The economic gains from the Trans-Pacific Partnership Agreement (TPPA) would be negligible, prominent economist and former senior United Nations (UN) official Professor Jomo Kwame Sundaram said, adding that it could lead to job losses and greater inequality.

"Advocates have claimed limited net economic benefits from the TPPA, with the widely cited Peterson Institute for International Economics' projections suggesting modest additional gross domestic product (GDP) growth over 10 years," Jomo said at a forum on the TPPA by the Malaysian Economic Association today.

"Economic gains from the United States (US)-driven supra-trade pact would also be negligible at 3% over the span of 10 years for developing countries in the TPPA, while developed countries would only see gains of less than 1% in the same period," he added.

"A more realistic UN global policy economic model (GPM), which incorporates the effect on employment suggests modest additional GDP growth after 10 years. From the GPM findings, (the) TPPA could generate net GDP losses in some countries although not Malaysia.

"The economic gains will be negligible based on the study. The TPPA could lead to employment losses and great inequality," Jomo said.

Jomo is of the view that the TPPA is not mainly about 'free trade' as both the US and Malaysia are already among the world's most open economies.

"There is little more to gain by further reducing tariffs, while non-tariff barriers such as import curbs on solar panels [were] not addressed," he said.

Professor Gurdial S Nijar from Faculty of Law, University of Malaya, said the TPPA is mainly about strengthening intellectual property and investor rights.

He cited how one of the pact's most controversial provisions: the investor state dispute settlement could affect the country, when foreign investors take to court to sue the government when there is a change in policy that could hurt their investment.

Ministry of International Trade and Industry's chief negotiator of the TPPA Datuk J. Jayasiri,  said Malaysia's participation in the TPPA early gives it the ability to negotiate the rules, especially in respect to key concerns.

"By participating in the TPPA, it confirms that Malaysia is an open trading nation that is business friendly, worker friendly and environmental friendly.

"Staying out signals the inability to accept disciplines and negotiate high standard FTAs (free trade agreements)," Jayasiri said in his closing address at the forum.

The TPPA is a free trade agreement initiative involving 12 countries — Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, Vietnam and Japan.

 

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