Huge potential in 'New Silk Route'

LATELY, I have been following the global debate and dialogue on the ramifications of the impending Trans-Pacific Partnership (TPP) and every time I meet a sceptic, I remind him or her of what Christopher Columbus once said: "You can never cross the ocean until you have the courage to lose sight of the shore".

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/hapsa14/Article/
Published: July 15, 2013

TPP is one such compass that promises to lead us to the "New Silk Route", breaking all barriers beyond boundaries.

The Silk Route may signify a historic trading route; in reality, it was a gateway that connected people, promised new exchanges of trade, culture, ideas, talent and much more.

TPP can be termed as the New Silk Route - a pathway that will unlock future growth potential of the 11 participating countries in the proposed Free Trade Agreement (FTA), currently being negotiated between Malaysia, Australia, Brunei, Canada, Chile, Mexico, New Zealand, Peru, the United States, Singapore and Vietnam.

The objective is to strengthen the economic ties between these nations and encourage investment flows that will foster new growth for the member economies.

For a fast developing nation such as Malaysia, TPP could be an effective solution to enhance its international trade, considering the fact that TPP will substantially reduce tariffs, open up new trading opportunities for larger markets, and establish a regional/international cooperative regime on issues related to customs procedures, labour practices, intellectual property and competitive policies.

This could transform the member countries into a "Single Market" for Malaysian products and services, taking our export potential to a new level.

This will also specifically be of great value to the SME community by helping establish recognition for their products and services and access to new markets at a reduced cost through elimination of trade barriers.

Imagine the potential the 11 TPP economies represent - a whopping US$22 trillion (RM69.7 trillion) gross domestic product.

TPP could help optimise the potential from these markets, possibly enhancing our exports significantly. In addition to providing opportunities for enterprise development between Malaysia and other TPP member nations, this ambitious FTA will strengthen cooperation in brand-building, organic growth in bilateral trade, regional productivity, and above all, global competitiveness.

All these could be a reality without compromising on Malaysia's existing social, cultural, religious and economic fabric of the society, as well as, without any threat to national sovereignty in all its forms. The provisions made under TPP could very well substantiate the government's efforts and commitment towards economic transformation of our nation.

TPP in my eyes would prove to be a systematic effort to internationalise our domestic economy. While aspiring to emerge as a developed nation by 2020, it is time for us to change our domestic policies tended towards protectionism, with more emphasis on liberal policies that foster regional and international trade partnerships, benefiting the economy as a whole.

As Albert Einstein once said, our ability to change will be the true measure of our intelligence. Hence, it is crucial for us to use our prudence in weighing the pros and cons of TPP in the light of what it can offer the nation and its trading communities, especially the critical mass of our SMEs.

Instead of discounting the benefits of TPP, let us deliberate and dialogue on how Malaysia should make its participation in the TPP negotiations more amenable to our specific high-priority industries, sectors and SMEs.

As we know it, the government remains committed to the agenda of developing and promoting local companies, products, contractors, talent and many others through various development policies, and through TPP, local companies including SMEs, from strategic sectors, can participate in government procurement in TPP partner countries, expanding their trading horizons. But at the same time, the government is taking the necessary measures to protect the local SMEs by excluding government procurement set aside for our local SMEs from being opened up to SMEs from TPP partner countries.

Let us embrace every possibility that lies within the ambit of TPP, open every door that takes our industry to new growth territories, and let us see value in Malaysia's economic integration with the region and the world. The TPP will surely help achieve coherence in the regulations, namely good regulatory practices, good governance and transparency in implementation of policies and processes that govern Malaysia's supply chain, and liberalisation, which will help reduce prices of goods and the cost of living.

Let us tread on the New Silk Route with caution not scepticism, with hope not despair, with optimistic disposition not a closed mindset.

Let us welcome the holy month of Ramadan by seeking our greater purpose in life, by doing well to others, and by embracing every positive aspect that supports individual and national growth.

Datuk Hafsah Hashim is the chief executive officer of Small and Medium Enterprises Corporation Malaysia (SME Corp Malaysia)