New Straits Times (11/02/2020) - TOKYO: Malaysia can take a leaf from Japan's success story in practicing trade openness via a competitive market, rather than resort to protectionism, said a leading Japanese economist.
Japan's National Graduate Institute for Policy Studies (GRIPS) Alliance professor Kenichi Kawasaki urged Malaysia to reflect deeply on the tremendous benefits to be gained by ratifying the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to ensure sustainable economic development.
"I am confident that Malaysia will enjoy a competitive advantage as developing economies benefit from labour-intensive industries which are dependent on specific bilateral agreements and trade industry structures," he said.
Kawasaki is aware Malaysia is considering domestic concerns and sentiments, but he is confident of Prime Minister Tun Dr Mahathir Mohamad's leadership and experience on such matters.
"I believe Dr Mahathir can very well sway the decision towards the CPTPP’s ratification if he is allowed to complete his five-year term as the premier.
"He has a proven track record during his first 22-year tenure as premier when his 'Look East Policy' towards collaboration with Japan resulted in rapid socio-economic development for Malaysia," he said.
He added that GRIPS has done detailed and extensive research and study on CPTPP and the Regional Comprehensive Economic Partnership (RCEP) on selected nations, including Malaysia, and discovered greater benefits than adverse effects will be gained if they ratified the trade agreements.
The CPTPP is a trade agreement among 11 countries that have potential access to a region of over 500 million consumers with a combined Gross Domestic Product (GDP) of US$10 trillion.
The United States withdrew from participating in Jan 2018.
The pact will enter into force as seven member countries, namely Australia, Canada, Japan, Mexico, New Zealand, Singapore and Vietnam have ratified it.
Currently, only Brunei, Chile, Peru and Malaysia have not ratified the pact.
"I am of the opinion that trade protectionism will never protect jobs in certain sectors as it can have a negative impact on the macro economy.
"The promotion of trade and investment liberalisation and facilitation is essential from the perspective of the growth of world trade and economy," Kawasaki said.
He added that some people may not fully comprehend trade liberalisation, fearing that if they suffer losses in one sector it will have an overall effect on the economy.
"A lot, too, depends on economic regulation, good governance and fiscal policies, and a leadership that has integrity, honesty, discipline and dedication," he stressed.
Kawasaki cited how in many developed nations, privately owned firms are already open to competition and are not protected.
However, on the other hand, government-linked companies and their subsidiaries are subjected to protection.
Malaysia has been part of the global value and supply chain, party to international trade agreements, and member of the World Trade Organisation (WTO) since Jan 1, 1995.
Read more at https://www.nst.com.my/news/nation/2020/02/564526/trade-openness-not-protectionism-way-forward-malaysia