Malaysiakini
LETTER

CPTPP is bad – not good - for the country

Mohd Effuan Aswadi Abdul Wahab

Published
Modified 26 Dec 2018, 8:42 am

LETTER | There are some quarters that are under the impression that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPRPP) is good for Malaysia.

This does not portray the real issues that Malaysia will face if she chooses to ratify the CPTPP. There are many challenges that Malaysia must face and the socio-economic consequences for Malaysia will be devastating as Malaysia’s policies are shaped by our multi-ethnic society.

The CPTPP is not really about free trade. In fact, only six out of 30 chapters deal directly with trade. And there are many chapters in the agreement that benefit major corporations more than the wellbeing of the people.

Some of the major chapters that are controversial are the chapters on investment, investor-state dispute settlement and state-owned enterprises, to name a few.

First of all, Malaysia already has Free Trade Agreements with many countries in the CPTPP except for Canada, Mexico and Peru. But market access to Canada, Mexico and Peru can be easily be obtained by having bilateral FTAs without having to be chained to binding rules on non-trade issues.

Anyway, Canada, Mexico and Peru are not countries with which Malaysia has significant trade with so the CPTPP will not benefit Malaysia much.

For the investment chapter, if Malaysia chooses to ratify it, the Malaysian government needs to provide foreign investors with a minimum standard of treatment which also can be interpreted as there should be no changes to laws and regulations if it leads to any negative consequences for foreign investors.

This will impose a “regulatory chill” on the Malaysian government where the government will face difficulties in introducing new policies which may be good for the people but negative for investors.

Furthermore, many conditions imposed on foreign firms are restricted. This may negatively impact the viability of local companies as they lack the expertise and technologies of foreign firms.

Another controversial chapter in the agreement is regarding state-owned enterprises (SOEs) which is the new topic in FTAs. SOEs, or better known here as government-linked companies (GLCs), have been instrumental in strengthening Malaysia’s economy by assisting numerous local SMEs.

Spillover effects from this generated employment for locals and provided business opportunities for them to grow and enhance their business. If Malaysia chooses to ratify the CPTPP, the GLCs will be restricted in the preferences that they can give to locals SMEs and this will jeopardise the growth of our SMEs.

However, we must admit that GLCs have many issues of their own but it will be best if reforms are done according to on our terms and not be forced upon by outsiders.

There are many other controversial chapters such as e-commerce, ISDS, goods, government procurement etc.

The negative points mentioned above are solid arguments against Malaysia ratifying the CPTPP as it poses an immense risk for Malaysia’s economic growth.

Moreover, Malaysia has a socio-political-economic structure that is very sensitive given the multi-ethnic nature of Malaysian society. We have huge inequalities between ethnicities and regions and the Malaysian government needs sufficient space to implement policies to close the gap.

Malaysia will lose this essential flexibility if it chooses to ratify the CPTPP. Therefore, it will be far better for Malaysia not to ratify the CPTPP.


The writer is coordinator for the Bantah TPPA/CPTPP movement.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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