The Malay Economic Action Council (MTEM) has raised concerns over the government's alleged failure to negotiate adequate safeguards for bumiputera interests under the Trans-Pacific Partnership Agreement (TPPA).

MTEM CEO Mohd Nizam Mashar said that while International Trade and Industry Minister Mustapa Mohamed had repeatedly reassured that there are safeguards put in place under the TPPA, details of such exemptions have so far remained unclear.

Specifically, Nizam referred to exemptions that deal with what he described as the two "most dangerous" clauses in the agreement’s investment chapter - fair and equitable treatment, as well as expropriation.

Exemptions to the fair equitable treatment clause, in the context of Malaysia, would allow for government policies that accorded privileges or preferential treatment to bumiputera businesses and companies.

"Malaysia has failed to negotiate adequate exemptions on these two major clauses. Only on state-to-state dispute settlements (SSDS) that favour investors," said Nizam ( photo ) during a press conference at MTEM's office here today.

"We will put our country in a position where we will be unable to defend our domestic laws and our sovereignty will be put at stake," he said.

Under the TPPA, governments deemed to have enacted policies that go against the trade agreement or caused losses risk being sued by private corporations from any of the 12-member countries, under the Investor-State Dispute Settlement (ISDS) mechanism.

"We do not believe this is right. MTEM is against the principle that a foreign company can sue a government for a policy affecting its business in an outside court system that is lopsided in favour of the company," said Nizam.

In its press statement, MTEM said all exemptions granted to a TPPA member country must be clearly specified as a list of its non-conforming measures.

There are, however, some general obligations on minimum standard of treatment, expropriation and free capital flows that must be adhered to.

In terms of exemptions in favour of bumiputera policies, Nizam said TPPA proponents often failed to mention that there is a provision that states "provides such measures shall not affect the rights of existing licence and permit holders or future applicants for licences and permits in sectors where foreign participation is permitted."

Issue explicit statement

Meanwhile, Bantah TPPA vice-chairperson Azlan Awang noted that the government should have issued an explicit statement that guaranteed bumiputera privileges as enshrined under the Federal Constitution and will not be compromised through signing of the TPPA.

"They (the government) should also come out with a list of any laws or regulations that needed to be amended in compliance with the TPPA," he said.

Following the recently-concluded negotiation process, Azlan noted there are countries such as Singapore and Chile that appear to have been granted "more exemptions" in favour of public interest.

These exemptions, he said, include enforcement of domestic laws as a dispute settlement mechanism, as well as on enforcing capital control.

The Dewan Rakyat is expected to debate on TPPA by January next year and Prime Minister Najib Abdul Razak had previously targeted the trade deal to be signed by February in New Zealand.