Malaysia and Bilateral Trade: Stick to the basics

Trump signs executive order to withdraw from TPPA. The way forward now is for Malaysia to seek bilateral trade ties. Multilateral deals always favour the more powerful countries as they exert pressure using basic game theory. Bilateral also allows for direct negotiations. In multilateral deals you have to compromise a lot more and to several other parties.

However, Malaysia must negotiate these bilateral trade deals without the onerous terms of the TPPA. No special favours for corporations to sue sovereign states that guarantees income for corporations. No terms to hurt our competitiveness and exports. Stick to the basics of bilateral agreements, market access and tariff removals. Not the all encompassing TPPA model.

The really interesting follow up question is what will Malaysia do regarding RCEP, the China led multilateral trade agreement? Will Najib feel the need to further kowtow to China now that TPPA is dead?

Obama’s Pivot to Asia strategy to contain China has been dented by Trump’s TPPA withdrawal. Trump may utilise a more Neanderthal tactic of war mongering against China and asking Japan and Taiwan to do more too. This is a recipe for disaster.

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- January 24, 2017

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