KUALA LUMPUR: Outgoing United States ambassador Datuk Paul Jones may not be around when the 18th round of the Trans-Pacific Partnership (TPP) talks take place in Malaysia, but he hopes that the public will have a clearer picture of the target of the meeting. The talks are scheduled to be held from July 15-25 in Kota Kinabalu.
"For one, there is a common misconception that it is a a US trade agreement when we were actually not on the ground floor when it commenced with four countries - Singapore, Chile, New Zealand and Chile," he said in an interview.
The TPP has on board the P4 countries and eight others, namely Malaysia, US, Australia, Vietnam, Peru, Mexico, Canada and Japan.
"What is also being lost in the conversation now is the big picture. During a period such as now, when global trade is not expanding as fast as it had been in the past, this agreement (with Japan on board) will cover 40 per cent of world trade, which would have a direct impact on the country's gross domestic product and employment."
A study by think tank Peterson Institute indicated that Malaysia would be among the biggest winners of the TPP, with as much as US$40 billion (RM128.4 billion) in annual export gains and US$25 billion in annual income gains by 2025.
The TPP would give Malaysia preferential access to a US$15 trillion economy, which means access to the US$500 billion in US government tenders. Apart from that, Malaysia also stands to benefit from free access in exports to Canada and Mexico.
Jones, who will return to the US to serve at the State Department, said the TPP also rates highly in the Malaysian context as it raises trade and investment profile and also create trading opportunities, which form part of the strategy for the country to become a high-income country by 2020.
The TPP marks an important milestone to Jones as Malaysia joined the group soon after he had taken up his Kuala Lumpur assignment.
Next month marks an important period for the ongoing negotiations of the ambitious 21st century multilateral free trade agreement (FTA).
The meeting in Kota Kinabalu is also significant to Japan, the 12th addition to the fold, which will participate in the discussion round for the first time.
"The entry of Japan means that there is some catching up to do, although a huge level of progress has been achieved, with the toughest decisions left to the end... I think it (conclusion of talks) is doable by the end of the year."
If the affirmation action was one of the sticking points that had held up the bilateral FTA, which has since been suspended, Jones does not expect it to be so this time round as long as its scope is clearly defined and transparent.
The US government procurement market also provides minority businesses under its affirmative action. On the current level of bilateral trade and investment between the US and Malaysia, he said it could be better.
Last year, bilateral trade totalled US$38.79 billion (of which imports from Malaysia contributed US$25.9 billion) placing it as the 22nd largest trade partner.
The strength of the US investments in Malaysia has resurfaced in 2013, as seen in the RM2.52 billion investments in the first quarter.
From the investing American perspective, the interest has shifted from the large production type investments and diversified to other areas, as reflected in the recent greenfield investments of Bose (consumer electronic products) in Penang and Darden Inc (red lobster farming) in Sabah.
The long-standing investors - namely Motorola, Dell and Intel - have marked Malaysia as their "high-end participant" in the global supply chain through research and development.
However, for Malaysia to meet its aspiration as a regional financial centre, he said, it would be important to open up further its professional services, particularly the legal, architecture and financial sectors, as the move would provide two playing fields - the small Malaysian market as well as the regional market.
Small and medium businesses (SMEs), which account for the largest group of the US exporters, can benefit the SMEs in Malaysia as they form a major user of imported goods.
The performance of SMEs and entrepreneurs in international trade will be given a shot in the arm in Malaysia in the upcoming Global Entrepreneurship Summit 2013 which is being held in Kuala Lumpur from October 11-12.
President Barack Obama, who will the second US president after Lyndon Johnson to make a state visit to Malaysia, is scheduled to give a keynote address at the event.
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