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  jata  Malaysia's Free Trade Agreements

The Trans-Pacific Partnership – Should We Be Afraid?

26 June 2013

In this first part of the series we look at the background of FTAs in Malaysia and the fact that these agreements have been around for a long time. Unlike many other issues, both sides of the political divide agree on the need for FTAs given the nation’s small population and export-driven economy. KiniBiz finally considers the genuine fears as well as the unfounded concerns surrounding the TPP.

On July 15, 2013, 11 nations from across the Asia-Pacific rim will congregate in Kuala Lumpur for the 18th round of talks on the Trans-Pacific Partnership agreement (TPP).

The session which could potentially be one of the last (there is talk that the participating nations want to finalise the text by October 2013), will see representatives from Australia, New Zealand, Chile, Peru, the United States, Mexico, Canada, Singapore, Vietnam, Brunei Darussalam and newcomer Japan join their Malaysian counterparts to debate and discuss the eventual text of this plurilateral free trade agreement (FTA).

The TPP has been a magnet for criticism from a host of groups and organisations across all the participating nations; be it anti-trade liberalisation, political opposition groups, small and medium business enterprises or ordinary citizens in general who find the secrecy surrounding the negotiations disconcerting.

Depending on who you ask, you may hear that the TPP is a ploy by big business to have unlimited and unregulated access to global markets aided by pandering governments more concerned about appeasing them than protecting their citizens.

Still others are convinced that the TPP is a geopolitical game driven by the United States to counter China’s rise in the region by limiting its progress in the Asia-Pacific region.

Those who are pro-trade liberalisation say that FTAs level the playing field, which by extension enhances competition ultimately leading to better quality products at lower prices. This is especially relevant for a nation like Malaysia, which has an export-driven economy and a small population.

So which is it? Is it one or the other or a bit of all of the above?

Malaysia already has six bilateral FTAs with Japan, Pakistan, New Zealand, Chile, India and Australia. We also have plurilateral FTA’s through Asean with China, the Republic of Korea, Japan, India, Australia-New Zealand and of course the Asean Free Trade Area (AFTA) itself.

Malaysia is also currently negotiating bilaterally with Turkey, the European Union and the European Free Trade Area as well as working on plurilateral agreements to enhance established FTAs with Japan and India via its Asean partnership.

According to an Institute of Strategic and International Studies (ISIS) report, the Ministry of International Trade and Industry (MITI) which usually takes point on FTA agreements says that its strategy in negotiating FTAs is usually built on a rules-based multilateral system which is then beefed up with complementary bilateral and plurilateral pacts

As such, FTAs are and have been for a while now a mainstay of our economic system, one that is unlikely to change given that we are a relatively small economy heavily reliant on exports. In fact there are suggestions that during the financial crises in 2009, Malaysia’s trade with nations that it has FTA agreements with, weathered the storm better than trade levels with non-FTA nations.

When announcing that Malaysia had joined the TPP negotiations as a full member in October 2010, a MITI statement said “the TPP offers an excellent platform to realise the creation of a huge market… Malaysia will benefit from the elimination of duties on Malaysia’s exports,” and “also enjoy elimination of specific duties”.

It is also worth noting, that the fact Malaysia has to enter into free trade pacts and embrace trade liberalisation is generally accepted by members on both sides of the political debate.

In an opinion piece, opposition MP Nurul Izzah noted that in principle Parti Keadilan Rakyat (PKR) supports FTAs. However she added that is must be an inclusive process, sensitive to the sentiments of the Malaysian people as well as regulated and monitored by the parliament.

It is a sentiment echoed by PKR’s Kelana Jaya parliamentarian Wong Chen who says that “Malaysia is an export-driven nation, so fundamentally we need to trade in order to survive economically… and trade agreements should be pursued as a national agenda.” However he too highlighted areas where engagement efforts have fallen short.

But if at the root of it, the Barisan Nasiona-led government and the opposition are on the same page (a rarity, to say the least) on the importance of FTAs to both the survival and growth of the nation’s economy, then what is the problem? Why are such a wide spectrum of groups being so vocal in their condemnation?

Just last week members of the Malay Economic Action Council (MTEM) staged a highly publicised walk-out of a consultation meeting with MITI after the ministry refused to share details of the text being negotiated. This follows published complaints by the Consumer Association of Penang, the Malaysian Nature Society and many others who have called for the government to withdraw from the talks at once pending cost analysis and more feasibility studies.

MTEM has said there was no way it could have a genuine discussion on the matter without the text or a comprehensive outline. MITI has retorted that in addition to the fact that the formulation of the text and discussions of trade negotiations are always done behind closed doors and are classified, the changing nature of the text makes it impractical to share after every round of discussions anyway.

To be fair to MITI, several academics, law experts and industry insiders have concurred that the usual practice when it comes to trade negotiations is to keep it under wraps, so the secrecy factor here isn’t really unique.

In fact proponents of the TPP have jumped to its defence on this matter. Paul A. Brown who is counsellor for economic affairs at the US Embassy in Kuala Lumpur said in an opinion piece to the Malaysian Insider that “far from being held in a vacuum, the TPP negotiations set aside a day each negotiating round for stakeholders from all the parties to have the unprecedented opportunity to present their positions and concerns directly to the negotiators.”

However secrecy is not the only sticking point. There are concerns with regards to cost and access to medicine, intellectual property and Internet freedom and even sovereignty due to the investor-state dispute settlement system.

But which are genuine concerns and what are unfounded fears developed from insufficient explanations or a lack of understanding? Is the TPP really a dangerous game or just a victim of misinformation?

As the 18th round of talks in Kuala Lumpur approaches, KiniBiz speaks to stakeholders and key players, including MITI, to identify the genuine areas of concern. We will also discuss what is fact and what is is fiction and draw conclusions on what must be done to allay fears and more importantly ensure Malaysia gets the best deal possible.

Source :  http://www.kinibiz.com/story/issues/30676/the-long-and-winding-road-ahead.html



Last Updated 2015-07-21 17:27:00 by vox vox

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