CAP: Malaysia should pull out of TPPA negotiations

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The Consumers Association of Penang (CAP) has urged the government to withdraw from the TPPA negotiations, as the pact will damage our prospects for future economic and social development.

Negotiations on the Trans-Pacific Partnership Agreement (TPPA) took place in Hawaii, expected to be the last round of the TPPA negotiations. The chief negotiators and their team met on 24-27 July followed by the meeting of the Ministers of Trade on 28-31 July.

The Ministers were expected to resolve all the outstanding issues and to conclude the TPPA text by 31 July. After some editing and “legal scrubbing”, the agreement was expected to be signed in October or November 2015.

The meetings in Hawaii this week were therefore crucial. They represented the last chance for Malaysia to make the right choices that would affect the people and our future generations of Malaysians.

The Consumers’ Association of Penang (CAP) is convinced that the TPPA is an agreement that is deeply flawed and will have devastating effects on the Malaysian economy and society, while bringing hardly any benefits at all.

We therefore call on the Prime Minister, the Minister of International Trade and Industry, and the Cabinet, to withdraw Malaysia from the TPPA negotiations and to not be a part of the conclusion of the negotiations or to the eventual signing of the agreement.

We also call on all Members of Parliament to be aware of the issues involved in the TPPA and to speak up against Malaysia’s continuing participation, and to take a vote against Malaysia joining the TPP.

At the recent negotiations in Hawaii, there was great danger that the United States in particular would put intense pressure on Malaysia to agree to its terms and conditions on the remaining issues of the TPPA.

The US believed it was in a strong position because the President had obtained fast track authority from the Congress. This allows the US Administration to place the TPPA in front of the US Congress for it to vote “yes or no” but not to change the text.

There is thus the danger that the US will try to ram through its views on the outstanding issues that were the focus of attention in the Hawaii meeting.

Among the main outstanding issues at this Hawaii round of negotiations were:

  • making intellectual property protection longer and stronger for the benefit of transnational companies, particularly the pharmaceutical industry, and thus weakening the role and availability of cheaper generic medicines.
  • whether Malaysia will be able to take health measures such as control over tobacco marketing which is being challenged by many provisions of the TPPA.
  • expanding the rights of copyright holders and thus making textbooks, journals, scientific information and digital information expensive for longer.
  • eliminating import duties on almost all items, and allowing foreign companies free entry into the service sectors.
  • pressurising Malaysia to join many international treaties, including UPOV 1991, which will reduce the ability of farmers to control their own seeds and make them dependent on and pay royalties on seeds belonging to transnational companies.
  • finalising the details of the investor-to-state dispute system, whereby foreign investors are enabled to claim billions of ringgit from the government for any loss of future profits due to introduction or changes in national or state policies or even in implementing existing laws and policies.
  • asking Malaysia to accept new rules on government procurement whereby the government loses the right to provide preferences to local businesses in its procurement of goods and services.
  • asking Malaysia to accept new rules on state-owned enterprises in which companies linked to the government will not be allowed to receive government assistance or to give preferences to local people and companies when purchasing or selling materials or services.
  • forbidding or restricting the right of government to regulate the inflow and outflow of funds and giving unprecedented rights to foreign financial institutions to sue the government in an international tribunal.

If the Malaysian Minister and his delegation succumb to the pressures, the adverse effects include the following:

  • higher prices for medicines, making them out of reach of the poor and the middle class. For example, the latest medicines for Hepatitis C now cost over RM300, 000 for a 12-week treatment.
  • local generic medicine companies will find it more difficult to survive, and importation of many cheap generic medicines will also be difficult and delayed. This will deprive Malaysian patients of their right to access to treatment, and cause many thousands of unnecessary deaths and continued untreated serious ailments.
  • the protection of public health through control over tobacco sales will be compromised as these measures can be challenged by the tobacco companies making use of TPPA provisions. The sale of tobacco products kills many thousands of Malaysians each year.
  • the elimination of tariffs across the board will threaten the viability of many local industries, and threaten the jobs and livelihoods of thousands of local people.
  • thousands of small scale farmers will have their livelihoods threatened by cheap imports and they have to pay more for their seeds and other agricultural inputs.
  • students and other Malaysians will have to pay high prices for their books and information materials for longer, or else forgo these because of the higher prices.
  • government will be restricted from regulating the flows of funds into and out of the country, thus losing a crucial policy tool to ensure financial stability and avoid financial crises. This will be especially detrimental because of Malaysia’s vulnerability to new global financial crises.
  • our local businesses and people will no longer be able to enjoy preferences or assistance from government projects and expenditure, as foreigners from TPPA countries will be given treatment equal to or better than the citizens.
  • state enterprises and companies in which government has a stake will be curbed in their operations and the large foreign companies will be better able to take over their share of the local market.
  • the sovereign right of the nation to make policies and of Parliament to enact laws and the judiciary to interpret laws will be jeopardised because of the TPPA’s investor-state dispute system whereby foreigners can sue the government for billions of ringgit in a foreign tribunal which has been shown to be biased in favour of the foreign investors.

Whilst the TPPA will have such serious adverse effects on Malaysians, there is hardly any benefit that the TPPA will bring. Malaysia already enjoys market access to the United States and other developed countries for almost all our important products, while market access to other Asean and Asian countries is already obtained through our trade agreements with them.

There is thus no reason for Malaysia to join the TPPA. It is not too late for the government to make the right decision, and withdraw from the TPPA before the negotiations are concluded.

There should be no embarrassment to withdraw from an agreement which does not benefit but instead harms the country. Many other countries have made decisions not to complete their negotiations when faced with an outcome of a trade agreement that is unfavourable to them.

Instead, it would be a shame and a national tragedy to complete and join in an agreement as comprehensive and as damaging as the TPPA, which will undo the Independence that the country’s past leaders have won for Malaysia, and which will damage our prospects for future economic and social development.

The Prime Minister, the Minister for International Trade and Industry, and the Cabinet should therefore make the decision now not to join the TPPA and to discontinue being part of the negotiations.

S M Mohamed Idris is president of the Consumers Association of Penang.

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