Trade agreements like the Trans-Pacific Partnership (TPP) and the North American Free Trade Agreement (Nafta) should be based on fairness and mutual benefit. They should be a non-zero sum game to begin with. Based on division of labour and competitive advantage, all trading partners should rightly gain from trade.

I am, therefore, a little puzzled when most trading partners have complained about the loss of export opportunity when the United States, under its new president, decided to withdraw from the TPP. Are we saying everybody is gaining and taking advantage of the US? No wonder Trump is withdrawing from the TPP and is ordering a renegotiation on Nafta, if indeed most countries are indulging in predatory trade, not fair trade.

On the other hand, some analysts in Malaysia have argued that Malaysia’s international trade would not be adversely affected by the withdrawal of the United States from the TPP (see: Analyst sees better growth without TPP). In fact, they argue that with the TPP discarded, Malaysia could enjoy better growth because it has now paved the way for the China-based Regional Comprehensive Economic Partnership (RCEP).

Seriously, do these analysts really know what they are talking about? Sometimes, I think they are talking politics more than economics.

First, if the demise of the TPP is not going to affect us potentially, why did we spend so much time and energy negotiating for it in the first place? Why are we disappointed when the US decides to call it off? I hope this is not the case of “sour grapes” or worse still, an attempt to put up a false façade over our very fragile economy.

Second, how can discarding the TPP help Malaysia’s growth? Is the RCEP negotiation incumbent upon the TPP? We could have the TPP now and RCEP later, which is better than just having RCEP.

Third, what evidence have we got that negotiating for the RCEP would be easier and more benign than the TPP? It is a big faulty assumption that China and India will be more magnanimous than the US when it comes to trade negotiation. I will not say Malaysia will gain less under RCEP, but I will not say it will gain more either. I think my assumption is more realistic.

Fourth, I don’t see the logic of an analyst comparing the growth of the TPP with RCEP by asserting that the RCEP will growth faster. What is the point and relevance here? The TPP and RCEP are not mutually exclusive; having one does not preclude the other. Two is better than one, regardless of which one is bigger or grows faster. I can’t help but feel that this analyst is talking with half-baked logic or a hidden agenda.

TK Chua is a FMT reader

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