TPPA makes Malaysia liable for foreign firms’ losses, new leak show

Local critics including former prime minister Tun Dr Mahathir Mohamad are staunchly against the TPPA, with the senior politician saying that the deal would cost Malaysia its sovereignty. ― File pic
Local critics including former prime minister Tun Dr Mahathir Mohamad are staunchly against the TPPA, with the senior politician saying that the deal would cost Malaysia its sovereignty. ― File pic

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KUALA LUMPUR, March 26 — A new leak of the Trans-Pacific Partnership Agreement's (TPPA) investment chapter confirms fears that the trade deal will make signatory nations including Malaysia vulnerable to legal action by companies from partner countries.

In the latest release by whistle-blower organisation WikiLeaks, the TPPA would infuse private corporations of partner countries with special rights and standing to sue other governments for unlimited damages if laws detrimental to their profits are passed.

Additionally, the leaked chapter dated January 20 retained the controversial investor-state dispute settlement (ISDS) that would allow companies to haul governments before a supranational tribunal for any losses — both present and future — suffered as a result of a country's legislation or legal decisions.

"The TPP has developed in secret an unaccountable supranational court for multinationals to sue states. This system is a challenge to parliamentary and judicial sovereignty.

“Similar tribunals have already been shown to chill the adoption of sane environmental protection, public health and public transport policies,” WikiLeaks' founder Julian Assange said in a statement accompanying the release.

Such disputes would be arbitrated similarly to the World Bank's International Centre for Settlement of Investment Disputes (ICSID), which previously awarded US$1.8 billion (RM6.6 bilion) to Occidental Petroleum from the government Ecuador despite acknowledging that the firm violated the terms of agreement.

Previous leaks of the TPPA showed that a key stumbling block was the refusal of the US to yield on the contentious ISDS clause of the agreement, which critics contend would open signatory states to legal action by private corporations if any law is deemed harmful to a firm’s commercial interests.

The latest partial iteration shows that there is no change to the mechanism.

Another controversial part of the chapter that has also been retained is the inclusion of the TRIPS-plus clauses, which seek to enforce provisions from the expanded version of the separate Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.

TRIPS-plus subjects developing nations to the same intellectual property standards as employed in developed nations, including the perpetual extension to patents that would prevent generic competition, despite no legal obligation to do so.

Local critics including former prime minister Tun Dr Mahathir Mohamad are staunchly against the TPPA, with the senior politician saying that the deal would cost Malaysia its sovereignty.

Dr Mahathir compounded his concerns by expressing doubts about Malaysia’s ability to fend off lawsuits from foreign corporations, citing high-profile legal defeats such as the loss of the Pedra Branca dispute with Singapore.

Detractors of the agreement said signing the deal would see American companies dominating Malaysia's weaker market and cause prices of basic goods such as medicines to rise, a fear that has been confirmed by previous leaks of the deal's intellectual property chapter.

The TPPA is a free trade agreement that has been negotiated by the US, Malaysia and nine other nations as part of the larger Trans-Pacific Strategic Economic Partnership since 2010.

Critics allege that the agreement has since been co-opted by powerful corporations to allow them to trample over existing consumer, worker and environmental rights in signatory countries.

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