Following the unexpected victory of the Mahathir-led coalition party in the Malaysian general elections in May 2018, the 60-year uninterrupted rule of the Barisan National came to a historical halt, ending with it many policies and initiatives previously undertaken by the Najib-led administration. In the firing line, stood the CPTPP, in respect of which Mahathir had briefly announced in early June 2018 the potential need for Malaysian to review its participation in the same during his maiden visit to Japan after taking office as the premier, citing the need to consider the terms of the CPTPP vis-a-vis ‘the level of development of a country’. The months ensuing the no less than ambiguous statement saw critics from both flanks voicing their sentiments on the CPTPP whilst Malaysia’s participation in the same remains uncertain.
Fast forward to late August 2018, following an interview with a Thai television network, Mahathir signaled that Malaysia will press on with ratifying the CPTPP. However, the jubilation for businesses and negotiators alike was only short-lived when in late September 2018, Mahathir was reported to state that Malaysia is still looking at the pros and cons of the CPTPP and, as such, has yet to make any final decision on the trade pact citing key concerns such as the potential impact of the ISDS mechanism (which, briefly, allows private stakeholders to have direct recourse against CPTPP member states in the event of a dispute) as well as the potential anti-Chinese outlook of the CPTPP.
At the current pace, Malaysia is unlikely to be at the forefront to reap the benefits of the CPTPP, which is tentatively expected to enter into force late 2018 / early 2019 once at least 6 countries out of the 11 signatories have notified the CPTPP Depositary in writing of the completion of their domestic ratification process. At this juncture, Mexico, Japan and Singapore have ratified the CPTPP domestically and Australia, Canada, Chile, New Zealand and Vietnam are expected to complete their respective internal ratification processes by the end of 2018 following updates shared by CPTPP member states .
If Malaysia decides not to join the CPTPP, Malaysia will risk losing its competitive edge as the preferred foreign investment destination vis-a-vis its ASEAN contemporaries such as Vietnam and Singapore. Hopeful businesses in Malaysia will also lose out on the opportunity to gain new market access to Canada, Peru and Mexico that businesses in Malaysia would be able to take advantage of under the CPTPP.
At this stage, the business community can only patiently wait for a clearer signal from the Malaysian government as to whether Malaysia will join the CPTPP free trade wave and ride against the tide of nationalistic global trend worldwide as observed from the historical hallmarks of Brexit, Trump’s withdrawal from the CPTPP and the US-China trade war.