Anti-TPPA: Debunking the misconceptions

The writer debunks some of the myths about TPPA, and why the opposition to it serves beyond, if at all, the purpose of only these various special interest groups.

By Anas Alam Faizli, FMT

It has been many months since the Trans Pacific Partnership Agreement (TPPA) caught the public’s serious attention and subsequently brought into broad daylight from the covert negotiations it has enjoyed since 2010. Since then, dialogues, workshops, awareness campaigns, media literature and negotiations amongst various civil society organisations have taken place.

Bantah TPPA, the largest single voice yet far in the ongoing battle against TPPA, has made significant inroads into increasing public awareness and engaging various stakeholders, industry experts, as well as the government to address the potential harms of the TPPA onto ordinary Malaysians at large.

However, there are other antagonists to the TPPA too; ranging from political personalities, special interest groups and even protectionism pundits.

But the TPPA is bigger than that. Its implications are real and will affect real Malaysian people on the ground regardless of political belief, race or interest.

Bantah is not against free trade, but against TPPA; against giving trade partners free passports to have claim onto our domestic regulations and ultimately, our sovereignty . TPPA is neither about fair trade nor even about free trade alone, given that only six of the 29 negotiated chapters are about trade. The remaining chapters are all potential threats to Malaysia’s sovereignty and economic development.

Therefore, I humbly attempt to debunk some of the myths about TPPA, and why the opposition to it serves beyond, if at all, the purpose of only these various special interest groups.

1) Opposing TPPA is pro-protectionism

Supporters of TPPA will always ride on the open market promises that the TPPA allegedly offers. Local companies can penetrate the market of the US and 12 other countries and it seems that the benefits of free trade and market liberalization will be at their disposal. A few have analogized the TPPA with a six or eight lanes super highway which will open itself to our local companies upon Malaysia ratifying the TPPA. Compared to the narrow trunk roads that they are currently using, forces against TPPA will be labeled as protectionists who are jealous with the huge potentials awaiting these exporters. Is this true?

Protectionism is frowned upon by many. We read international economics and trade textbooks and we will stumble upon the curse on protectionism due to the latter’s role in the Great Depression. While we agree in principle that protectionism was to be blamed (in fact it was the US who started it), it is not a “one way traffic”. Opposing TPPA may land you on the protectionist camp (if it really is) but will TPPA guarantee that the US will not resort to protectionism forever?

We should not be so naïve that the US will dismantle its trade protection laws particularly its notorious anti-dumping and countervailing laws. While MITI negotiators are very optimistic about exploring new markets in the Asia-Pacific region, our shrimp producers have been slapped with 60% anti-dumping and countervailing duties by the US Fair Trading Commission (FTC). Is not that protectionist?

Again, we should not be misled by the obligation to reduce tariffs as part of our market access obligations. The US tariff rates on most products have long been low. What deters our exports from entering the US market is not that. It is the non-tariff barriers which make it very costly for our producers to comply with the US technical regulations, standards and conformity assessment procedures. The US has higher standards than us and it is likely that their standards will be imposed on us in case the TPPA comes into force.

2) Opposing TPPA is anti-competition

Supporters of TPPA have been harping on the possibility of TPPA enhancing market competition in Malaysia. While having a regulation that promotes the competitive process is good for the nation, there is no clear link between competition promotion and the TPPA. Malaysia already has Competition Act 2010 which regulates competition in Malaysia and the law does not discriminate between local and foreign companies.

Supposed one sees the necessity of increasing the level of competition in the market, the answer lies in the effectiveness of the provisions of this Act and their implementation by the competition authority in Malaysia, not mandatory recommendations that come from outside the country. Most free trade agreements (FTAs) do not provide for substantive and procedural rules that must be incorporated into domestic competition regulation.

3) Opposing TPPA is a Malay agenda

Supporters of the TPPA are arguing that the critical analysis of the possible impact of TPPA on government procurement only serves the Malay interests. Contrary to this perception, the arguments against the agreement are more than promoting the Malay interests.

It goes without saying that with TPPA, there is a danger of importing the more stringent intellectual property protection standards into this country. The increase in prices of medicines will not only be felt by Malays.

Non-discrimination that the TPPA strives to achieve is not the prevention of discrimination between locals.

The TPPA targets discriminatory practices that differentiate between local producers and foreign producers and between producers from different countries.

4) TPPA will help uproot corruption from outside

Whether corruption is endemic in this country is a question that may be answered differently depending on whom it is posed to. But considering the level of public dissatisfactions over government spending and the scandalous exposes that have rocked the ruling party, it is not unusual if fighting corruption is used to justify the TPPA.

But is fighting corruption impossible that an outsider’s help is necessary to make such noble intention comes true. And if the answer is yes, what regulation of trade relations between states has to do with removing the leakages that result from corrupt practices in the country?

It is true that aspects of international trade regulation are prone to corruption just as other branches of public authorities. However the task of uprooting corruption should be left to domestic regulation. FTAs, including TPPA should merely liberalize trade and remove trade barriers.

If the trend is to broaden the scope of FTAs to domestic regulation, it may be good if the high standards of US anti-corruption law be exported to our country. But is that the case as far the TPPA is concerned?

We do hope that there is an anti-corruption chapter in the draft TPPA text. If there is none, should the US be concerned with the corrupt practices by people in the Malaysian government or businesses?