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  jata  Malaysia's Free Trade Agreements

Ten Myths About The Trans-Pacific Partnership

 26 June 2013

In the fourth and final part of the Trans-Pacific Partnership series, Tiger pounces on the ten issues surrounding the agreement that it believes are myths while trying to highlight what might actually be more important factors to consider during the negotiations, before we mull inking any agreement.

This Tiger is a bit too young to really remember the good old days before the Asian Financial Crisis, when the Malaysian economy was strong enough to be known as a so-called Asian tiger. Unfortunately that reputation, much like most of the actual wild cat population has long since disappeared.

Every now and again though, we remember those good old days and begin strategising as to how we might be able to recapture the lost glory. One such plan it seems, is to expand the market for exports by signing on to free trade agreements such as the Trans-Pacific Partnership to bolster and better trade.

However, the decision to enter into negotiations and eventually sign on to this agreement has raised howls of protest from a wide spectrum of groups who fear that by joining the TPP pack, Malaysia might find itself in trap.

Nonetheless from prowling around, it seems to Tiger that while there are genuine concerns that must be addressed, there are also a lot of misconceptions that need to be cleared up. The problem is that with many of the issues, fact and fiction seem so closely intertwined.

So here are the ten myths that Tiger has sniffed out and highlighted together with some genuine concerns that might be tied to it.

1. The country will suffer because of the TPP

On the contrary, not focusing on trying to open up foreign markets to our exports is much more likely to stagnate growth. Given Malaysia's small population, we simply cannot rely solely on the local market to sustain our economy.

We must remember that if the TPP nations can come to a consensus, then this agreement will create the largest free trade area (in terms of combined gross domestic product [GDP]) in the world. Furthermore, if it is true that regional neighbours such as Thailand, Philippines and even China might be looking into joining the TPP, then Malaysia really cannot afford to be left out.


2. No engagement has been done

The Ministry of International Trade and Industry (Miti) has consulted and conducted engagement. They have met with stakeholders and briefed groups they think are relevant to the process. Other participating ministries, such as health, finance, environment and human resources among others have also engaged with their own stakeholders. So saying that there has been no engagement is probably unfair.

Perhaps the quality of the engagements that have been undertaken by Miti and the other relevant ministries could be better. With regards to this, it is not too late and Miti as well as the other ministries should proactively approach stakeholders to explain and discuss the ins and outs of the proposals being tabled


3. Only the Ministry of International Trade and Industry is involved in TPP

While Miti usually leads negotiations as a whole, it is mostly only in charge of sections related to trade and market access. Other sectors are led by the relevant ministries; government procurement for an instance actually falls under the purview of the Finance Ministry, while labour rights issues come under the Human Resources Ministry. As such these ministries too have a role to play in educating and engaging their relevant stakeholders.

Miti often appears alone in a jungle full of predators and its fellow ministries should back it up when questions relevant to their areas of expertise crop up. It may also help if each ministry, if not explaining benefits, at least justifies why the TPP won't harm us.


4. Malaysia will lose its sovereignty

Tiger likes to be the king of the jungle, so suggestions that the investor-state dispute settlement (ISDS) system might pose a threat to sovereignty or impede the ability to create laws or policies is a grave concern.

However Miti has explained that the ISDS component of the TPP is largely procedural and the agreement being negotiated will in fact allow governments to regulate for a host of reasons including health, security, morals etc.

Opposition MP Charles Santiago also highlighted that the ISDS system is more likely to be too cost-restrictive for Malaysian companies (which largely comprise small and medium enterprises). Tiger feels it is a fair point, and believes that the government must sit down with the SMEs to ensure that the ISDS is a useful protection tool for them as they venture beyond Malaysia's borders.


5. Preferential treatment will have to go

There is a lot of concern that groups currently afforded preferential treatment or access to government procurement that they might lose this right in TPP. Tiger feels that there are two issues related to this myth.

The first is that Miti is doing nothing to protect these groups. In fact Miti has said that Malaysia has only offered certain areas in which to open up government procurement. Although negotiations are ongoing, it appears that Miti is intent on ensuring that SMEs and protected groups are not suddenly shut out of the lucrative government procurement market.

Secondly, if the Malaysian economy is ever going to be taken to the next level than we are going to have to remove the protective layers that give some an edge over others. Tiger says that the sooner Malaysian companies embrace the challenge to become competitive in their own right, the better.


6. Foreign companies will dominate the Malaysian economy

While it is true that the TPP will open up the market and offer easier access for foreign companies to enter the market, the idea that the local economy will be swamped seems unlikely.

According to Miti, a substantial amount of procurement is already open to international companies, furthermore MITI has left some areas of government procurement out of what they are offering the TPP members.


7. SMEs will not benefit from TPP

There are suggestions that Malaysian companies, the majority of which are small and medium enterprises will not gain very much from increased market access in other countries. Tiger says that those who feel that local players cannot benefit from venturing into foreign markets are defeatists and have already been proven wrong by the Malaysian companies that have secured contracts overseas.


8. The price of medicine will skyrocket

Chief Negotiator for Malaysia J Jayasiri explained that the proposal on the table is for an extension of patents on drugs, which would more likely delay access to generic drugs rather than cost existing prices to rise substantially. So the fear of medicine prices shooting up after the TPP is signed seems false.

However, Tiger does believe that our negotiators must ensure that we do not get caught up in an innovation versus access battle. They must ensure that people do not lose affordable access to the best medicine available.


9. America is dictating terms to the rest

Jayasiri quipped that there have been 17 rounds of negotiations so far, and that if the other TPP members had conceded every point to America, then the TPP would have been signed a long time ago.

Tiger says that it is no surprise that the Americans are looking out for their interests and the Malaysian government must look out for ours. Rather than relying on American goodwill, we should demand that our representatives defend our positions and bargain expertly to secure the best deal possible for the country.


10. The final agreement will be secret

Once the agreement text has been completed, received the Cabinet's approval and been ratified, the final agreement will be made available to the public. What will not be immediately available are the negotiating texts as they will contain attributions to other nations, some of which have periods in which such documents must remain classified.

Tiger says, now that the myths have been exposed and laid bare, let's get on with the job. Our companies have more room to roam if their hunting grounds become bigger. Tiger can understand that better than most. Many hills mean more tigers.

GRRRRR!


Related link : Trans-Pacific Partnership Agreement (TPP)

Source : http://www.kinibiz.com/story/issues/31948/tpp-the-sticking-points.html

 



Last Updated 2015-07-21 17:17:37 by vox vox

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