Malaysia-US Comprehensive partnership TPPA

A Malaysia-US business synergy to drive a mutually beneficial future

PRESIDENT Barack Obama and Prime Minister Datuk Seri Najib Razak attended a signing ceremony where nearly US$2 billion (RM6.5 billion) worth of commercial deals were concluded between Malaysian and American companies in the areas of aviation technology, biotechnology and insurance. As Obama described it: "These deals... investing in each other's country" are the first following a new comprehensive partnership arrived at between Malaysia and the United States. Intended to facilitate such deals and announced during Obama's recent visit, the partnership is designed to step up a two-way investment flow unlike other earlier arrangements, which has made US companies the largest foreign investor here.

Malaysia-US business synergy

 These new deals, for instance, will help create thousands of jobs for GE Aviation in Ohio, North Carolina and Vermont and its suppliers as a result of the US$1.5 billion purchase order of engines for AirAsia's A330 aircraft. Meanwhile, Sime Darby's 30 per cent investment in San Diego-based Verdezyne, a start-up biotechnology company, will bring the latter and its technology to Malaysia to diversify Sime Darby's downstream activity. Finally, the deal signed between the AmBank Group and MetLife will see the involvement of an American insurer in the Malaysian takaful market. Of special significance to Malaysia is the note of thanks from Obama to the PM for expanding economic ties between the two countries and providing jobs for Americans, an important recognition of the depressed US economy and its unacceptably high rate of unemployment.

Malaysia's direct investment in the US has, of late, been increasing. Witness the US$3 billion invested by Genting in the hotel and tourism sector, while the investment portfolio of Malaysia Life Science Capital Fund includes several US bio-technology companies. Khazanah, the country's investment arm, is actively looking for opportunities in California's Silicon Valley. Already, too, despite riddled with bad press, Malaysian investors are in Hollywood working with esteemed directors and star actors. Capital movements indicate, therefore, that Malaysia while remaining economically robust at home, is also looking to foreign shores for means to determine a successful evolution up the value chain to arrive at Vision 2020 on cue, if not earlier.

As such, the United States, as the world's most technologically-advanced nation, in many ways is an obvious source. A symbiotic relationship is, therefore, presenting itself and there is no better point in history when the terms are this good. To ignore it would be to the detriment of Malaysia. If there is a drawback, it is that this country does not have the financial wherewithal to fully exploit what is on offer. Nevertheless, this is no reason to ink the Trans-Pacific Partnership Agreement without further assurances from Washington.