After TPP, Malaysia's focus is now on RCEP, says Mustapa

Hannah Rogers
March 10, 2018

Malcolm Turnbull also hailed the signing of the restructured Trans-Pacific Partnership as a vital win for Australian industry and attacked Labor for giving up on the deal when Donald Trump pulled the United States out of the pact.The TPP-11, as it is now known after the departure of the United States, was signed by Ciobo in Chile on Friday.

Yesterday, 11 remaining members of the former TPP signed a revised free trade agreement (FTA) without the US.

The TPP 11 members resolve to "contribute to maintaining open markets, increasing world trade and creating new economic opportunities for people of all incomes and economic backgrounds", the preamble of the text released earlier said.

The revised agreement eliminates some requirements of the original TPP demanded by U.S. negotiators, including rules to ramp up intellectual property protection of pharmaceuticals.

Malaysia is set to be the biggest victor from Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said Moody's.

"Despite the diverse and hard challenges, the CPTPP is a historic achievement that creates free and fair 21st century rules in the Asia-Pacific region", Japanese Economy Minister Toshimitsu Motegi said at a news conference after the signing of the deal.

The Peterson Institute for International Economics found that Malaysia, Singapore, Brunei and Vietnam will each receive a bump of more than 2 percent to their economy by 2030, while New Zealand, Japan, Canada, Mexico, Chile and Australia will all grow by an additional 1 percent or less.

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President Donald Trump fulfilled an election promise by pulling out in January previous year, labelling the deal a disaster for American workers. But even in the absence of the world's largest economy, countries that are now part of the deal will only gain from any reduction in the costs imposed on trade.

The TPP was signed in Santiago, Chile today and Trade Minister Steven Ciobo said the new deal will bring a boost to the Australian economy and businesses.

Singapore, for example, will now gain preferential market access to Canada and Mexico, with which it has no free trade agreement.

"International trade is very much a live, despite what some people think", said Chilean Foreign Minister Heraldo Munoz.

A few hours after the 11 countries inked the CPTPP in Santiago, Trump signed off on new tariffs of 25 percent and 10 percent on steel and aluminum imports, respectively.

The UK is also understood to be exploring the possibility of joining a trans-Pacific trade bloc after it leaves the European Union (EU), as part of plans to find alternative export markets. Experts say that tends to harm both exporting nations as well as importing countries' consumers, who face higher costs. The thinking was that China would have an incentive to open its market and liberalize its policies in an effort to eventually qualify for TPP membership.

Toshimitsu Motegi, Japan's minister in charge of the TPP, told a news conference he wants the United States to rejoin the pact in its current form without revamping it. "It becomes a modest liberalization measure".

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