JULY 22 — Since Monday last week, Malaysia and 11 other parties to the Trans-Pacific Partnership (TPP) trade and investment agreement have been meeting in Kota Kinabalu to continue negotiations at the 18th round of the controversial agreement. Apart from Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam, Japan is the latest addition to these plurilateral negotiations.
Kota Kinabalu has been chosen as the venue in order to reduce the likelihood of protests. The US in particular, as the principal driver of the talks, has been keen to avoid negative publicity. However, concerned citizens have not let the choice of venue stop them. Protestors in KK this weekend were arrested under the Dangerous Drugs Act 1952 before being charged under the Peaceful Assembly Act 2012.
Criticism has arisen because the negotiations have been shrouded in secrecy and people in many of the 12 participating countries are worried the TPP will compromise their national economic sovereignty.
The TPP is branded as a regional free trade agreement (FTA), but pure trade matters are far from being the main points of contention of these negotiations, which are rumoured to conclude by October 2013. The portion genuinely concerned with trade focuses on tariffs, the bread and butter of the World Trade Organisation (WTO) whose negotiations the TPP is supplanting.
The TPP talks cover 29 areas, including how investment is regulated, the rights of state-owned enterprises (or GLCs as we know them), small and medium enterprises, food standards (which could affect halal restrictions), intellectual property rights and patents — which could raise the price of medicines — and, most worryingly, the right of multinational corporations to sue the host country. The last provision, for instance, would restrict the right of governments to restrict or expel a socially and environmentally harmful company, such as Lynas.
Critics of Barisan Nasional’s promotion of crony contracts and the dominant position of government-linked companies (GLCs) may see the TPP as a means to achieve long-awaited economic reforms in Malaysia. Foreign companies would have equal or more equal footing as local firms, who will be then be forced to be more competitive to stay relevant. However, foreign intervention may not be the best solution for a particularly Malaysian problem.
Granting too many rights to large foreign firms may stifle the development of home-grown entrepreneurs as much as the crony system does. If negotiators are not careful, the TPP will do more than upset the crony economy as it may also suffocate the space policymakers have at their disposal to shape the Malaysian economy according to the changing needs of its people.
The restrictions would apply as much to the present government as they would to any future government. Japan and Korea’s big corporations achieved success through a mixture of affirmative policies and protection, which are measures we should not deny to deserving Malaysian companies. As Cambridge economist Ha-Joon Chang has pointed out, all successful industrialising countries have used such measures in the earlier stage of development.
The TPP is also viewed as an attempt by the US to sway influence in the Pacific Rim away from China, who is not party to the talks. Malaysia already enjoys good trading relations with both the US and China. During the first five months of 2013, China was our largest trading partner (14.3 per cent) while the US was fifth (8.1 per cent).
Institut Rakyat is of the view that we should tread carefully in any trade talks so as not to become the mouse deer trapped between two raging elephants.
Observers in the know have remarked that the US approach to FTAs has been driven more by geopolitical ambitions rather than economic concerns. The US has negotiated FTAs with only three out of its top 10 trading partners. Many of its FTA partners are countries with which it enjoys military relations, such as Israel, Jordan, Korea, Singapore and Central American states. Both Europe and the US are eager to secure FTAs with the Asia-Pacific so that they will not be left out of the new “Great Game” of 21st-century world politics.
Pakatan Rakyat MPs have demanded that the Malaysian government produce a cost-benefit analysis of the TPP. No negotiator should enter talks without a clear idea of the gains and losses. Despite MITI’s promise to produce a TPP assessment report coordinated by the United Nations Development Programme (UNDP) within two weeks after a meeting with a few Pakatan Rakyat MPs and Institut Rakyat in June 2013, no information has been forthcoming so far.
Malaysia must weigh up the economic and political opportunities and costs before signing any far-reaching agreement. The Malaysian government prides itself on being a representative democracy so it must be transparent to its people about the deal it is making because it will affect our future in the Asia-Pacific region.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
