I refer to the letter Let us have cheaper rice, I say.
Nowadays, not much news is heard about the FTA talks between Malaysia and US. I remember some time back, probably at the end of last year, there was a report about the importance of letting our people know about the progress and the content of the FTA talks between US and Malaysia. A lot of resistance to the trade talks is probably due to misinformation and the lack of proper understanding of the issues at hands.
I fully support the views that what transpired in the talks should be made public and the public should also be briefed on all the facts and figures of the various sectors under negotiation. One of the hurdles in the talks, I understand, is agricultural products especially our rice imports from US.
US is seeking a freer access to our rice market, but our government is afraid that freer access would hurt the livelihood of our rice farmers and hence it may lose the votes of this important group of people in rural Malaysia.
However, if we look carefully into this issue, a freer access does not mean the end of our rice industry. At the moment, Malaysia is not self-sufficient in rice production and we import 400,000 tons of rice from Vietnam and 380,000 tons from Thailand yearly. On the other hand, rice imports from the US amounts to about 400 metric tons at the moment which is a very insignificant amount. Furthermore, the variety of rice from US is also different from the types grown in Malaysia.
With the high cost of production of rice in the US and adding to this the transportation and distribution costs, I do not think that rice import from the US would be cheaper than our Malaysian rice, even with their government subsidies.
Hence, even if we open up our rice market, I do not expect Malaysians to be rushing to supermarkets to buy the US variety of rice. After all, if you are used to eating a certain type of rice, you would not want to change to another variety just because it is US imported. Our eating habits do not change overnight.
We should look at the big picture. Overall, I think a FTA will do more good than harm to Malaysia.
US is our biggest export market. In 2006, Malaysia's export to US amounted to RM110 billion. With an FTA, our goods will be cheaper and we can expect our export to the US to grow many times more. With an increased export, we can create more jobs and attract more industries and businesses to open. We can expect more FDI to come in.
Mexico's FDI increased three-folds after the Nafta. Singapore and Australia also experienced an increase in their FDI after signing an FTA with the US. More FDI means more capital inflows, more firms opening their base in Malaysia, more manufacturing firms starting operation. In essence, it means that we will have a boost to our economy which will ultimately benefits not only the government but the people as well.
A better economical growth will mean more income not only for the people but for the government as well. The government can help our farmers to move up the technological ladder, adopt fully mechanised farming with modern farming techniques. They can also help in management by giving soft loans and providing technical assistance.
The modern world is flat and survival depends on how well we can adapt and innovate. By opening up our market and inviting foreign competition, our people will become more competitive and innovative.
With competition, we will move up the technological ladder faster and this is important, because we have reached a stage where our wages are no longer cheap and as such we cannot compete with the likes of Vietnam, India, and Indonesia in low wage low cost industries.
Competition from imports will spur us to work harder and make our people more resilient, more adaptive and more innovative which are all important ingredients for this globalised world. If we aspire to be among the First World countries, we will have no choice but to equip our people with these attributes.
It is better to face competition now than to face it later when we may not be able to compete with nations like Vietnam, China, India, and Thailand who are now breathing down our neck.