Response Towards Claims Made By The Association Of Water And Energy Research Malaysia (Awer) In The Article Dated 28 December 2015 Published In The Sun

1. We wish to respond to the article “Environment issues and the TPPA” contributed by AWER that was published in The Sun dated 28 December 2015.

2. In the article, AWER has raised its concerns on several environmental issues and we would like to address them accordingly as follows:

Will the upgrading of existing environmental laws be considered as a trade barrier if it prohibits a particular product from being sold in Malaysia? (Eg: Will an upgrade of the Minimum Energy Performance Standards (MEPS) be viewed as trade barrier for products that do not meet the new requirement?)

3. The objectives of the Environment chapter in TPPA are to ensure trade and environment policies are mutually supportive, encourage high levels of environmental protection, ensure effective enforcement of all environmental laws, and to ensure trade activities do not jeopardize environmental protection.

4. Article 20.3 (2) stipulates that “The Parties recognise the sovereign right of each Party to establish its own levels of domestic environmental protection and its own environmental priorities, and to establish, adopt or modify its environmental laws and policies accordingly”.

5. The Government retains the right to impose measures to protect the environment, including new measures that will enhance environmental protection, as long as these measures are non-discriminatory and apply to both foreign and domestic products.

6. Meanwhile, Article 20.3 (3) states that “Each Party shall strive to ensure that its environmental laws and policies provide for, and encourage, high levels of environmental protection and to continue to improve its respective levels of environmental protection”.

7. The TPPA encourages higher environmental standards. Therefore, the upgrading of our existing environmental laws will be consistent with the TPPA.

Article 20.11 focuses on voluntary mechanisms to improve the country’s environmental performance, but there are no clauses on mandatory mechanisms via any national legal framework.

8. This article will allow the voluntary mechanisms  such as certification schemes  developed by our private entities to be recognised by TPP countries., Such voluntary mechanisms can boost the access of our products to TPP markets.

9. On the other hand, while there are no clauses on mandatory measures on environmental performance, any TPP member country can still enforce mandatory measures as long as they comply with the provisions outlined under the Technical Barriers to Trade (TBT) Chapter, which include transparency and non-discriminatory rules.

The extent of which Malaysia could benefit from Article 20.15 which focuses on transition to a low emission and resilient economy, given that our country is not a technology owner in this field.

10. The TPPA takes into account the different levels of development across the 12 participating countries. Article 20.15 was introduced with an objective to allow TPP countries to engage with each other in cooperative and capacity-building activities that focuses on to transition to a low emissions economy.  Malaysia is expected to benefit from this cooperation and capacity-building activities which involve technology transfer and the exchange of knowledge, experience and expertise with other more developed TPP countries.

How can Malaysia deal with the inflow of “environmentally friendly” goods & services and the possibility of “greenwashing”?

11. Article 20.18 promotes the use of environmental goods and services by lowering the tariffs and limiting the restrictions on them. This is in line with the commitments made by all APEC countries in 2009 to reduce the tariffs on 54 items in the APEC Environmental Goods list to 0-5% by 2015. Examples of such items include steam or other vapour generating boilers, bamboo floor panels, solar water heaters and liquid filters for pollution control.

12. Greenwashing refers to the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology or company practice. If any goods or services are not deemed as environmentally friendly as claimed to be, Malaysia has our domestic laws and regulations in place to deal with the inflow of such goods and services.
    Will the TPP allow for dumping of goods with lower environmental standards from one country to another?

13. The environment chapter in the TPPA is about promoting higher environmental standards within the participating countries. The policy flexibility accorded to each TPP country in terms of regulating trade in environmental products and services will not be eroded. For Malaysia, products and services brought into the country must comply with our standards, developed by the Department of Standards Malaysia  and implemented by relevant Ministries/Agencies such as, the Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK) , the Energy Commission  and the Construction Industry Development Board (CIDB), among others.

14. The TBT Chapter under the TPPA reaffirms the WTO TBT Agreement which states that no country should be prevented from taking necessary measures to ensure the quality of its exports, or for the protection of human, animal, and plant life or health, of the environment, or for the prevention of deceptive practices, at the levels it considers appropriate. As such, Malaysia will not be prevented from adopting or maintaining technical regulations or standards in accordance with our rights and obligations. TPPA will not allow the dumping of goods with lower environmental standards.

Whether Malaysia will only end up as a buyer of goods and services or will there be local champions after the development of environmentally friendly building materials and designs.

15. At the moment, it is true that Malaysia is a buyer of major environmentally friendly goods and services. In addition to our participation in the TPPA, other measures must also be undertaken to improve the capacity and capabilities of our local companies in this sector.

16. Local entrepreneurs could utilise the TPPA as a platform to enhance their products and services via technology collaboration and capacity building in order to expand their businesses into other TPP countries. Issues surrounding the ability of our local companies to compete with foreign players are addressed under various chapters of TPPA such as Small and Medium-Sized Enterprises and Competitiveness and Business Facilitation. 

Conclusion

17. We hope that the concerns raised by AWER have been addressed through our explanations. The Government recognises that there are benefits and costs associated with the TPPA, but we are convinced that this trade agreement will help strengthen our environmental standards.

Datuk J. Jayasiri
Deputy Secretary-General (Strategy and Monitoring)
Ministry of International Trade and Industry
4 January 2016

 

 

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