The Trans-Pacific Partnership Agreement (TPPA) is without doubt the most important trade negotiation since the World Trade Organisation came into effect in 1995. Malaysia and 11 other countries recently concluded the negotiations of this major agreement. The full text of this agreement has since been made available in the public domain.

The Federation of Malaysian Manufacturers (FMM) remains a strong advocate of the TPPA. We believe that the TPPA will boost exports, enhance employment and also provide a greater degree of transparency for Malaysian companies investing in TPPA countries leading to stronger and more sustainable economic growth.

We are therefore heartened by the positive outcomes outlined by the cost-benefit analysis studies, namely the National Interest Analysis by the Institute of Strategic and International Studies (Isis) and the Study on Potential Economic Impact of TPPA on the Malaysian Economy and Selected Key Economic Sectors by PricewaterhouseCoopers (PwC). The results of these studies were recently released by the International Trade and Industry Ministry.

PwC in its analysis on the economic impact of the TPPA on 10 strategic sectors highlighted that Malaysia would enjoy net economic gains mostly because of lower non-tariff measures of between 25 to 50 percent.

The Malaysian gross domestic product is estimated to increase by up to US$211 billion within the first decade of the implementation of the TPPA. Investments are also projected to increase by up to US$239 billion, largely in the textile, construction and distributive trade sectors.

Malaysia’s non-participation in the TPPA is projected to incur a cumulative GDP loss of up to US$16 billion over 10 years after the TPPA comes into force. This would be the opportunity cost of not ratifying the TPPA.

According to the National Interest Analysis study, Malaysia’s participation in the TPPA is, on balance, in the national interest. ISIS analysis indicated that joining the TPPA would be consistent with Malaysia's New Economic Model and reduce tariff restrictions in the US, Canada, Mexico and Peru.

Isis highlighted that independent estimates have indicated positive effects on Malaysia’s growth, investment and job creation. It pointed out that the government had secured numerous exclusions and exemptions to safeguard the nation’s and stakeholders’ interests especially in the areas of national sovereignty, government procurement (GP), state-owned enterprises and the Bumiputera agenda. The government retains its rights of affirmative action for the bumiputera community.

Malaysia can also elect to deny tobacco control measures from Investor State Dispute Settlement (ISDS) provisions.

We would like to commend the International Trade and Industry Ministry and its team of negotiators for having successfully handled the contentious issues surrounding the TPPA and negotiating a favourable net position for Malaysia as highlighted by the studies undertaken by Isis and PwC.

It is increasingly important for Malaysia to diversify its export markets and build investor confidence in order to sustain the growth enjoyed by Malaysia thus far. This is especially so in the context of uncertainties surrounding world growth, in particular the growth of our traditional export markets.

Recognising the benefits that can be reaped from the TPPA, countries like the Philippines, Thailand, Indonesia, South Korea and Taiwan have also expressed their interest in joining the Agreement. Taking into cognisance the positive overall impact of the TPPA, FMM would like to reiterate its urgings to the government to expedite the signing and ratification of this important agreement.

We look forward with equal anticipation to the successful conclusion of other important FTAs in particular the Malaysia - EU Free Trade Agreement and the Regional Comprehensive Partnership Agreement that are being negotiated, for the same reasons.