Bernama | 19 Feb 2014

American-European trade pact could dwarf TPPA if it becomes a reality

KUALA LUMPUR, Feb 19 (Bernama) — The Transatlantic Trade and Investment Partnership (TTIP), now being negotiated between the US and European Union (EU), could dwarf the Trans-Pacific Partnership Agreement if the former becomes a reality.

Even worse, economies like Malaysia would have to adhere to the tariff levels agreed to between both giant economies if they want to export to these markets and those of other potential members such as Japan and South Korea.

It would make it easier for both the US and the EU to buy and sell goods and services in each other’s markets, UBS Investment Bank Managing Director and Senior Global Economist, Paul Donovan, told a media roundtable today on global and Malaysian economies here today.

The talks between the US and the EU on TTIP, which began in July 2013, aims to remove trade barriers in a wide range of economic sectors.

He said TTIP was about harmonising trade between the US and the EU with the average tariffs between both economies set at four per cent.

"Japan and South Korea are going to apply exactly the same standards as the US and the EU, which means Malaysian companies which wish to sell to the US, EU, South Korea, Japan, Singapore and Taiwan, have to meet US and EU standards," he said.

Both US and EU make up 40 per cent of the global economic output.

The third round of TTIP negotiations took place in Washington in December 2013 and the next round is scheduled for March 10-14, 2014.

"TTIP, if it is passed, will be an enormous piece of legislation, far bigger than the World Trade Organisation. It is very worthwhile but TPPA will be overwhelmed by TTIP if is passed," said Donovan.

TPPA is being negotiated among 12 countries — US, Japan, Mexico, Canada, Australia, Malaysia, Chile, Singapore, Peru, Vietnam, New Zealand and Brunei.