The recent decision by President Donald Trump to pull the United States of America out to the Trans-Pacific Partnership Agreement (TPPA) means that there will be no change in the trade and investment framework for the near future.  The TPPA was a key component of the Obama administration’s pivot to Asia as part of a broader geopolitical strategy to counter rise of China’s influence in the region.

This decision doesn’t come as a surprise to any of the countries who were involved in the agreement as it was a key component of the presidential election campaign.  What is clear is that the Trump administration’s policy will put the perceived benefits of domestic concerns over the possible benefits of international engagement with established allies and trade partners.  This internal strengthen of America’s domestic economy through revitalisation of domestic infrastructure and domestic job creation may in fact have a positive effect on the global economy, however this is yet to be seen.

The impact on the Malaysian economy and Malaysian business in general will most likely be minimal for the simple fact that Malaysia has a host of Free Trade Agreements (FTA) both bilateral and multi-lateral and that export figures to these countries are steadily growing.

While the US market will remain important, Malaysian exporters should continue to look at the high growth markets in Asia and Middle East as they are both geographically closer and easier markets to operate in for Malaysian companies looking to expand internationally.

The TPPA would have contributed to the long term strategic goals of sustainable economic growth for the country but the long time frames for implementation would also mean that it would take time for these to take effect.  Now Malaysia has the opportunity to negotiate with those partners again to bring those potential benefits into something that will be of benefit in the near future.

What is likely to be the main effect of the recent decision is that “Asia will pivot to Asia” bringing countries like Australia and New Zealand along with it.

Nordin Abdullah Managing Director of Glenreagh Sdn Bhd a boutique consultancy firm, he is also currently the Vice President of the Malaysian International Chamber of Commerce and Industry (MICCI) and an EXCO member of the Malaysia Australia Business Council (MABC)

Commentary Featured in the following media :
US Move has ‘killed’ TPP, says Moody – The Edge
Malaysia should capitalise FTAs to do business worldwide – MALAYSIA OUTLOOK
‘Asia Will Pivot To Asia’ Main Effect Of Us Withdrawal From TPPA – BERNAMA
‘Asia Will Pivot To Asia’ Main Effect Of Us Withdrawal From TPPA – MYNEWSHUB
“Asia akan utamakan Asia” – kesan utama penarikan AS daripada TPPA – BERITA HARIAN


Upcoming Events

MGBF In The News