COMMENT It is critically important for the people and government of Malaysia to think very carefully about the opaque, American-led Trans-Pacific Partnership Agreement (TPPA) and to recognise it for what it is.

Ostensibly, it is a multilateral trade liberalisation agreement among 11 countries – Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam.

TPPA protest Sabah arrest In reality, the Trans-Pacific Partnership is not an equal partnership that stands for mutual gain.

Essentially, it is a one-sided, legally-binding agreement which protects and enhances the economic interests of investing foreign transnational corporations, particularly from powerful countries such as the United States, and enables them to undermine a weaker country’s sovereignty and democratic foundations in the pursuit of their profits.

The Trans-Pacific Partnership (TPP) is made up of 29 chapters, but only five are about trade. The other 24 chapters deal with sensitive issues, such as patents, copyright, intellectual property, transparency, labour, development, government procurement and the environment, among others.

Exclusive negotiations have been going on in secret since 2008. And yet, 600 US business corporations have direct access to the deliberations. The only way in which information seeps out is through leaks.

In the event of a dispute, the TPP empowers the investor to sue a host government in an international court, under an Investor-State Dispute System (ISDS). For Malaysia, it will represent a return to the yoke of neo-colonialism, 56 years after Merdeka.

In the distant past, disputes over foreign investments were resolved either through the host country’s domestic judicial system or through government-to-government negotiating processes.

Today, in the TPP, foreign investor protection, through enforcement of an ISDS, threatens to undermine independent national justice systems and fundamentally shift the balance of power in a manner that detracts from the fair resolution of legal disputes.

ISDS tribunals essentially fail to meet the fundamental principles of due process, consistency and transparency, common to the Malaysian legal system.

‘Greater rights for foreign investors’

In the TPP, the substantive rights of the foreign investor have been expanded significantly through creative, elastic interpretations of the new language of current investment treaties, which are skewed heavily in favour of the economic interests of transnational corporations at the expense of the public interest, national autonomy and state sovereignty of the host country.

More than that, this system of the free market often grants foreign investors greater rights and privileges than those enjoyed by local investors under the laws and constitution of the host country.

NONE There are numerous examples of how sovereign states have suffered from the legal entanglements of such trade agreements.

In the recent case of Chevron vs the government of Ecuador, an order by an arbitral tribunal forced the executive branch of the Ecuador government to violate its constitutional separation of powers and halt the enforcement of a ruling by an appellate court.

In June 2012, in the case of the Railroad Development Corporation (RDC) vs the Republic of Guatemala, under the Central Free Trade Agreement (Cafta), the tribunal ruled that the US$11.3 million award in favour of the RDC was further enhanced by a court order to pay compound interest, dating back to the time when RDC first challenged government action.

Investor-state tribunals have constructed wide interpretations of the minimum standard of treatment language and the related fair and equitable treatment standard, proposed for the TPP, which will hold governments liable for an array of actions that meet the customary international law standard of denial of justice.

Tribunals have generated theories of investor expectations that have led to awards being granted simply because governments have altered policies of general application in response to changing circumstances, such as financial crises, or in response to public demands when environmental and other laws are violated.

Some of these interpretations have placed the economic interests of transnational corporations over and above the sovereign right of states to regulate and govern their own affairs.

Malaysian political parties, professional organisations and civil society groups have been quick to point out the pitfalls and traps set by the TPP.

Hold government to promise

The legal profession in many countries has raised serious concerns about the Investor-State dispute arbitration provisions, proposed in the TPP, pointing out that such a regime could undermine justice systems and the fair resolution of legal disputes.

It is a legitimate concern of foreign investors that they have access to an open and independent judicial system for dispute resolution in the host country.

It is therefore up to the Malaysian government to convince foreign investors that Malaysia’s judiciary is independent and impartial and that there is no justification for such a stringent dispute settlement system.

For example, the TPP will strengthen the power of profit-laden pharmaceutical companies to challenge a country’s health policies on patents and generic drugs.

NONE Many studies have shown that trade agreements with the United States or Europe have led to escalating drug prices, following strict patent rules on the sale of cheaper generic drugs and the consequent use of more expensive branded drugs.

During 2002–2006, enforced secrecy of data interrupted the introduction of cheaper generic versions of 79 percent of medicines released by 21 multinational drug companies. Such policies will drive up the cost of health care in an unacceptable way.

The TPP will also enable the tobacco industry to challenge government policies and  laws on smoking and tobacco control, enacted to implement obligations under the World Health Organisation Framework Convention on Tobacco Control.

Incredibly, the governments of Uruguay and Australia are being sued by Philip Morris for their “plain packaging” regulations. But in its TPP negotiations, the government of Australia has asserted its support for the rule of law and has refused to accept or submit to the powers bestowed upon such a system of dispute settlement.

The Malaysian government must follow Australia’s example and reject the TPP as it stands.

International Trade and Industry Minister Mustapa Mohamed has given a reassurance that the views and opinions of opposition parties and non-governmental organisations have been taken into account to protect the country’s interests.

Mustapa has promised that “if the agreement is detrimental to our sovereignty, we will not sign the TPP” and that “the people’s views and that of national interest will surely be considered.”

The people of Malaysia must hold him to that promise, but not before there is a wider, open public debate. What better way to do that than having the TPP debated meaningfully and openly in civil society forums and in Parliament?

There must be no secret negotiations or secret agreements. Transparency and accountability are imperative. Malaysia is not for sale or for exploitation.

DR RONALD McCOY is a former president of the Malaysian Medical Association and International Physicians for the Prevention of Nuclear War.