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on 21 Jan, 02:27

TPPA Workshop by Sanya Reid Smith: Introduction

TPPA Workshop by Sanya Reid Smith: Introduction
Post brings to you a series of articles based on a recent NGO briefing on the Trans-Pacific Partnership (TPP) in Malaysia by Ms Sanya Reid Smith, an expert on Trade and Investment Rules. She has been monitoring the Trans-Pacific Partnership Agreement (TPPA) since 2011, and is also the resource expert for Bantah TPPA Malaysia.

The entire talk is uploaded on YouTube in a seven part series and can be accessed here. As topics covered within the talk were very extensive, we took the liberty to transcribe and reorganise the content into a structure that will hopefully benefit those who are still grappling with the implications of signing or not signing the controversial trade agreement. This multi-part series will look at TPPA Basics, Stakeholders, Impacts, and Miscellaneous Topics. The index of the series is attached at the end of the article.

This article introduces the TPPA and covers some background of Malaysia’s past FTA negotiation with the US. It is drawn mainly from Part 1 of the talk. Transcriptions are kept chiefly ad verbatim, with some minor edits for readability.

Video starts at 0:48

TPPA and the US connection

This is a free trade agreement between 12 countries. In addition to Malaysia there are Vietnam, Brunei, Singapore from ASEAN, as well as US, Canada, Chile, Peru, Mexico, Australia, New Zealand, and Japan.

The main one you need to remember is the US. Because when the US negotiates free trade agreements, they have a template. They have their 29 chapters, and they bring it to you and they say, you could make a few changes in the margins, and that’s it. Basically you swallow it whole. And you can see this when you look at the past US free trade agreements. They’re all very similar. But there are a couple of new tricks in the TPP that makes it worse for Malaysia. Fresh new tricks.

Malaysia did not sign Malaysia-US FTA in 2007

For those of you who remember what was happening here in 2007 to 2008, when Abdullah Badawi was the Prime Minister, Malaysia was negotiating a bilateral US free trade agreement. That was basically the same thing minus the new tricks, and just two countries.

At that time, Malaysia had a lot of negotiation rounds, but in the end didn’t sign. Because the cabinet had, I think, 58 red lines of things that they said were bad for Malaysia and for the national interest. The US was inflexible and they insisted on it, so tidak jadi. There was no agreement.

What happened after that? Did America bomb Malaysia? No lah. Malaysia kept exporting as it has been until today, kept getting foreign direct investment, a certain amount. So if we don’t sign the TPPA, what happens? We continue as today.

TPPA has 24 non-trade chapters

Well, the TPP is 6,000 pages long approximately, 30 chapters. Of those 30 chapters, 6 are about what you would think of as a free trade agreement. You think an FTA is about exporting laptops made in Penang to America with zero tariffs, right? Exporting baju made in Malaysia to America. Yes, that is in the TPP.

But, the other 24 out of the 30 chapters are about Malaysia’s laws and regulations. Malaysia’s environmental laws. Labour laws. Intellectual property laws that affect medicine prices and text books. The ability of state and local governments to regulate. So only 6 out of the 30 chapters are about trade.

The US has 14 more years to remove tariffs than Malaysia

And in those 6 chapters, the general rule is that the TPP countries remove the tariffs, the taxes on each other’s exports. So, you would think that everybody removes them over the same period of time, and they gradually go down. I had a quick look. Malaysia has a maximum of 16 years, enam belas tahun, to remove its tariffs.

Guess how long the US has. They’re more developed right? In the World Trade Organisation, the developed are supposed to liberalise more quickly. It’s supposed to be special and differential treatment exceptions for the developing countries. But in the TPP, the US has given themselves 30 years before they remove their most sensitive tariffs. Malaysia got 16. So this is special and differential treatment for the US.

Index of the Series

This series contains 20 articles on the TPP, and can be read in any order. The series is also being translated into Malay.