PROMINENT economist Jomo Kwame Sundaram has opposed Putrajaya’s commitment to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), saying the agreement was based on “bogus” data and would be detrimental to Malaysia’s interests.

Prime Minister Dr Mahathir Mohamad told a Thai television network last week that Malaysia will press ahead with the Asia-Pacific trade pact despite earlier comments that called for a review.  

The 11-member signatories are Malaysia, Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore and Vietnam.

The pact is a revival of the Trans-Pacific Partnership, which collapsed after the US withdrawal in early 2017 and seeks to cut tariffs that amounts to US$13.5 trillion (RM54 trillion) or 13% of the global gross domestic product.

“Many of the people who advocate the CPTPP do so with the best of intentions, but the whole premise of the CPTPP is actually bogus,” said Jomo at the Industrial and Economic Policies in Malaysia Baharu forum organised by the Perdana Fellows Association in Kuala Lumpur tonight.

“The proponents basically did shopping. They went around looking for data that could fit their arguments and then touted that data,” said the former member of the Council of Eminent Persons.

“The road to hell can be paved with good intentions,” he added.

The pact was signed in March and would come into force when at least six countries countries ratify the pact. Thus far, Singapore, Mexico and Japan have ratified the pact with Malaysia, Australia and Chile signalling they will follow suit.

On Dr Mahathir’s comment that Putrajaya would press ahead with the pact, Jomo replied: “I don’t have an answer to that.”

“I think one of the big problems is that we do not have a political culture which encourages politicians to be well informed,” said the former United Nations assistant secretary-general and visiting fellow at the Khazanah Research Institute.

“It is our responsibility to educate them and to work to better inform them of the reforms which are being considered.”

Jomo said CPTPP’s flaws were inherited from the TPP, which would have cut over 18,000 tariffs, including tariffs on all US manufactured goods and almost all US farm products would be eliminated completely.

“I can assure you that it is neither comprehensive nor progressive. It might be comprehensive in terms of being able to undermine the future prospects of development of countries such as Malaysia,” he said.

Jomo said the model used to justify the TPP was two-decades old and from two bodies; The Economic Research Service at the Agricultural Department and the International Trade Council.

“It is the model of choice because it was convenient. But the fact is, anybody who is in the field, will tell you that that model is outdated and the premises of that model is to be fundamentally questioned. And even using that model, they found negligible growth from the TPP.

“What has happened since then is that some private sector institutes came up with more optimistic figures. And those figures are bogus numbers in my view.

“People can say and really mean to do well for the country, but ultimately the argument which people make is that we need to join the CPTPP so that we can bring about the reforms in this country. Why on earth should we join an arrangement to do reforms which are desired by foreign investors?

“I mean think about the implied logic about that position. All those reforms are those wanted by lobbyists in the US. Now the US isn’t even part of the CPTPP.

“And we are going to pursue these reforms which are being desired who are no longer part of the game. I mean, imagine the absurdity of the reforms. I mean people have drunk the Kool-Aid, as the Americans would say.

“People are quite committed to the TPP and the CPTPP for reasons which are obscure. They’ve lost their way. But the authorities, they won’t admit they’ve lost their way,” he said

He said criteria for good governance set by the Organisation for Economic Co-operation and Development and the World Bank are not necessarily guiding criteria for developing economies.

“Korea, Japan and Germany would not have been where it is today if they had followed orthodoxy. Orthodoxy is the protection of a bunch of ideas by people who have made it to keep away the competition, to keep the competition at bay.” – August 27, 2018.