10 things to do before the TPP gets implemented

The TPP was finally signed last week, even though its implementation is not a done deal yet. There are now 2 years until the ratification and certification processes take place, before the TPP comes into force.

If the TPP does come into force in a couple of years, there are certain things that Malaysians won’t be able to do anymore. So here I give you 10 things to do before the TPP gets implemented, before it’s too late:

1. Increase minimum wage

Can the TPP halt the government to increase the minimum wage? Yes it can. ISDS protects the foreign investor against what is called ‘indirect expropriation’: measures from the government which reduce the value of the investment. A minimum wage increase can be considered a case of indirect expropriation, since it can make the investor decrease its expected profits. And as such, the foreign investor can challenge the government in an international court, as it has happened to Egypt.

2. Keep devaluating the ringgit

Similar to the previous point, an investor whose expected profits are lowered due to a weaker currency may resort to ISDS to sue the country, seeking for compensation. This is a great risk particularly to governments in crises, such as Argentina in 2001. After Argentina devalued its currency and defaulted on its debt in 2001, it got multiple suits by hedge funds not willing to accept the country’s sovereign debt restructuring.

3. Get sick… and recover!

Prices of medicine will go up. Médecins Sans Frontières/Doctors without borders has called the TPP “the most damaging trade agreement ever for global health”, stating that “brand-name drugs and vaccines would not face direct competition for excessively long periods of time while patients, medical providers like MSF, and people in TPP countries endure unnecessarily high prices.”

I don’t wish anyone getting sick. However, if you’re ever going to, do it now! Afterwards, you might not be able to afford the medicine.

4. Swap seeds with your neighbour

TPP prohibits farmers from saving and exchanging many varieties of seeds. If they do, they can be sued by seed companies, such as Monsanto.

5. Enjoy Malaysian rice

Malaysia’s rice sector is highly protected, with the protection justified largely by arguments for food security. TPP will eliminate the subsidies given to farmers and the high duties to import rice to Malaysia. TPP will not, though, eliminate the domestic subsidies that the US government gives its own farmers, possibly making the Malaysian rice farmer unable to compete with cheaper US rice.

This is what happened to Mexico. After signing into NAFTA—a free trade agreement similar to the TPP— in 1994, Mexican tariffs on corn imports and programs supporting small farmers were removed, yet U.S. domestic subsidies were left intact. US corn farmers were then able to export their corn for a lower price than the cost of production of Mexican corn. The result has been 1.1 million small farmers, and 1.4 million other Mexicans dependent upon the farm sector, driven out of work.

Ironically, even though the price of corn went down after NAFTA, the deregulated retail price of corn-made tortillas–Mexico’s staple food–shot up almost three-fold. This is because NAFTA included service sector and investment rules which allowed a few large firms to dominate the food-processing activities and raise consumer prices. This result stands in sharp contrast to promises by NAFTA’s boosters that Mexican consumers would benefit from the pact, as some backers of the TPP are doing nowadays.

6. Take a selfie/make a video without worrying about copyright infringement

TPP will lock-in the DMCA notice-and-takedown system for monitoring copyright infringement, but with fewer requirements about the contents of takedown notices as compared to the DMCA in the US, allowing for abuse of the system.

If you have a video of your toddler dancing to some famous song and want to share it with your friends, you already possibly can’t upload it to Youtube, but still can upload it to some Malaysian website. Not for long.

7. Implement policies against climate change

With ISDS, climate action can be rendered ineffective. Governments can be contested in international courts when implementing measures to curb the use of fossil fuels, as it happened to Canada when implementing a moratorium on fracking, or when kick-starting a renewable energy project by giving subsidies or encouraging local industry, as when the US launched a WTO attack on India’s Jawaharlal Nehru National Solar Mission in 2012.

8. Buy a proton

If prices of automobiles imported from TPP-signing countries come down, that means there the price difference to buy a Proton, a Ford or a Toyota car will keep shrinking. I wonder then, who will buy Proton after TPP gets implemented?

9. Support the local industry

Due to the elimination of tariffs, SMEs from all TPP-signing countries will be able to buy raw goods at the same price, giving a natural advantage to those countries with a higher productivity performance. The US, Canada, Japan, Australia, New Zealand, Singapore all outpace Malaysia in this aspect.

When the preferential price for the raw goods goes away, Malaysian SMEs will be at a disadvantage and will not be able to compete in the domestic market, let alone overseas. As a result, according to the Malaysian Small and Medium Enterprises Association, 30% of Malaysian SMEs risk disappearing.

10. Blame the Chinese

Talking about support to the TPP, PAS president Datuk Seri Hadi Awang said “The DAP agrees. Why? Because the Chinese control trade in Malaysia. It’s the Bumiputera who are tired with the TPPA,” to which DAP publicity chief Tony Pua sarcastically replied “Umno supports TPPA, so they must be Chinese.”

The Chinese have been blamed time and again in most incredible ways (“The Chinese tsunami!”). Yet, the TPP is indisputably an anti-Chinese pact: “TPP allows America – and not countries like China – to write the rules of the road in the 21st century,” said Obama after the deal was signed. Likewise, the Malaysian Chinese won’t be able to take full advantage of the deal with the Bumiputera protections in place.

So, in the future, if Malaysia gets sued and must pay a multi-billion award to an American investor, who will be blamed? Still the Chinese? Maybe the Americans? Or maybe the local politicians who signed the deal?

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