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Monday, July 15, 2013

Are we ready for TPPA?

This is the most secretive and often feared agreement that Malaysia is involved in.
By Zb Othman
KUALA LUMPUR: Twelve Pacific Rim countries meet in Kota Kinabalu, Sabah, today to negotiate terms for the Trans Pacific Partnership Agreement (TPPA), a far reaching, all encompassing free trade agreement (FTA) few people know about.
As far as global trade negotiations go, this is the most secretive and often feared agreement that Malaysia is involved in.
The new agreement, which has been in negotiations since 2008, would bind participants to rules on everything from food safety to medicine to Internet behaviour.
The 12 countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam — will meet for the 18th round of talks but the US has stated its intention to wrap everything up by October.
The secretive nature of the talks, with details being negotiated kept under wraps, has raised suspicions on the provisions of the pact. Negotiators say details of the talks are not released because of the sensitive nature of the negotiations, but a former US senior official has hit the nail right on the head.
Former US Trade Representative Ron Kirk, who now advises transnational corporations, said if the text were made public, negotiators would be walking away from the negotiations because they would be so unpopular.
In Malaysia, various groups have come up in opposition to Malaysia’s participation. Groups opposing the trade pact are calling it Malaysia’s biggest mistake.
Former prime minister Dr Mahathir Mohamad calls it a political tool of the US to contain China’s expansion. The government on the other hand has consistently said it remains committed to joining the TPP.
The Ministry of International Trade and Industry (MITI), which represents Malaysia in the negotiations, said Malaysians should not fear the agreement, which would among others, open up business opportunities for Malaysian companies and attract investments. MITI said its negotiators will protect Malaysia’s interest in hammering out a deal.
However, critics are saying that Malaysia may be out of its depth to enter the TPPA club, with behemoths like the US and Japan and other industrialised countries such as Australia and Canada as members.
Worse still, while people who are not directly involved in the talks are excluded, 600 trade “advisors” who are mainly representatives of big American corporations enjoy privileged access to draft text and negotiations. These include Wal-Mart Stores Inc, Monsanto Co, Bank of America Corp, JPMorgan Chase & Co, Cargill Inc, Exxon Mobil Corp and Chevron Corp.
Huge benefits
The government is looking at the huge benefits that TPPA would bring to these shores, as much as US$40 bi l l ion (RM127.03 billion) in annual export gains and US$25 billion in annual income gains by 2025.
It has also assured small and medium enterprises that their businesses would not evaporate, in fact they will be allowed to get preferential access to the US’ trillion dollar economy and US$500 billion in government tenders alone.
Yet these assurances are more than balanced by the concerns raised by citizen groups in Malaysia and in every country currently engaged at the talks. Critics say MITI’s negotiators may be blinded by the perceived advantages and are ignoring some of the innocuous but far-reaching provisions of the agreement.
One of these is the Investor State Dispute Settlement (ISDS), which is really worrying. It is the same one that got Ecuador slapped with a US$1.8 billion payment when Occidental Petroleum Corp sued the country for loss of income when one of its contracts was terminated under Ecuadorian law.
This means that under the TPPA, corporations can sue the Malaysian government if they think their income is being threatened.
Under previous free trade proposals by the US, the ISDS apparently allows foreign corporations and their deep pockets to hire expensive lawyers, to bypass domestic laws and challenge government policies and regulations meant to protect public interest.
From leaked papers, it is also understood that the TPPA would discourage governments from imposing capital controls or banning financial products that are risky such as derivatives. This means that Malaysia’s capital control, which saved it from the effects of the 1997-98 financial crisis, would also be banned.
While the government has repeatedly assured critics that the negotiations would take into account Malaysia’s vulnerabilities and protect some industries with exceptions, it is clear that the US is in the driving seat.
Mahathir said one of the objectives of the TPPA is political, ie to contain China, which is conspicuously absent from the talks. Looking at the TPPA as a weapon to curb China is not hard. The US wants to remain the power in the Pacific area and the TPPA is essentially an adjunct to its military designs for the region.
This brings us to the most damning criticism of the TPPA itself, which is that it is not a free trade pact at all. Only five out of the 29 chapters of the TPPA, according to leaks, are all about trade and trade facilitation.
The rest of the chapters concern other things like patents, procurement and environment, some of which had been rejected by Malaysia under the failed US-Malaysia FTA because they would affect Malaysia’s domestic policies that include the Bumiputera quotas and government procurement.
With these concerns in mind, it would be better if the government could take a step back and reconsider whether we need the TPPA more than the US needs us to be in the TPPA, considering Malaysia’s strategic position in the region.

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