Developing nations should sign the Free Trade Agreements (FTA) only after properly studying its impact on the economy to avoid losing out, veteran Malaysian leader and former premier Mahathir Mohammad said.
He said the lopsided FTAs should not be initialled and fine prints must be scrutinised before signing any agreement, Mr. Mahathir, who was premier for 22 years, noted.
The United States-Singapore FTA was used as a model on how other countries could benefit from borderless trade without tax, but Singapore did not need to give up anything when it signed the agreement as it was a freeport and it does not impose tax anyway, Mahathir said.
However, he cautioned countries like Malaysia would have to give up many things for such an agreement that is more beneficial to the United States.
Speaking at the inaugural discourse series on ‘Strategic Positioning of the Malays in a Borderless World’, Mr. Mahathir said that bilateral FTAs were merely “lateral” tactics that would eventually help the Westerners achieve a borderless world and subsequently monopolise the global economy.
“I am not saying that we shouldn’t sign FTAs,” he said adding “but we must reject clauses that will put us at the losing end.”
“Without political power, the Malays would be marginalised just like the American Indians in United States, Aborigines in Australia and Maoris in New Zealand,” he said.
“Central America, for example, is actually controlled by American banana plantation operators, hence it is called Banana Republic,” he observed.
Mr. Mahathir said Malaysia could have lost its grip on the economy if it gave in to Western-prescribed measures to overcome the economic crisis of 1997.
“We took unprecedented measures to protect our interest, and we have succeeded”, the former premier said, who was widely credited for stabilisation of Malaysian economy during the 1997 Asian financial crisis.
He pegged the local currency Ringgit to the US dollar and did not allow it to free float, a move that protected the currency and Malaysia was not hard hit as Thailand.