COMMENT The Malaysian government insists that there are no good arguments for opposing the Trans-Pacific Partnership Agreement (TPPA). For six years, very few knew the contents of the TPPA except for the corporate lobbyists that had been drafting it in total secrecy.
All they said was that it was good for you, good for “free trade” and they just wanted you to support it. Critics were told to shut up on the grounds that they knew nothing about it. Meanwhile, the neo-liberal ideologues have maintained that the opponents of the US-inspired trade agreement do so based on “ideological” rather than substantive reasons.
This is surprising when we bear in mind that among the people who oppose the TPPA are a Nobel laureate economist Joseph Stiglitz and the world’s most notable public intellectual Noam Chomsky. Let us look at just three good reasons why we oppose the TPPA.
1. US imperialistic design and MNCs’ domination
Lest anyone has any doubts, the main purpose of US President Barack Obama’s two visits to Malaysia within the last year was to try and speed up the signing of the TPPA that is so critical to US capitalism in its effort to check the growth of China’s trade relations in the region.
It is naive for neo-liberals to claim that this TPPA is in the interest of promoting free trade in the Asia Pacific when they blithely ignore the elephant in the region, namely China. The TPPA’s blatant exclusion of China from this trade agreement is clearly the next stage of the US’ ‘Pivot to Asia’ after their military encirclement of China with a noose of military bases and warships.
This article is by no means a defence of China or China’s interests in the region; rather, it is a condemnation of US imperialistic designs which are not in the interest of free trade and harmonious co-existence in the region. US imperialistic designs do not just take a military form; they stretch into strategic economic forays by US-based multinationals in an effort to exclude China from this so-called “free trade” agreement.
The TPPA is clearly more than just a trade deal; it also imposes parameters on non-trade areas. This is the point stressed by Stiglitz. It sets new rules for everything from food safety and financial markets to medicine prices and internet freedom, requiring countries to maintain compatible regulatory regimes; facilitate corporate financial transactions; establish copyright and patent protections to govern intellectual property rights and to safeguard foreign investors.
The Investor State Dispute Settlement (ISDS) mechanism is the extrajudicial process written into the TPP (Chapter 28), whereby governments can be dragged before tribunals by corporate lawyers if they think national (health, environmental, public policy) laws violate their TPP rights or limit the MNCs’ expected profits.
These corporate lawyers can decide whether our national environmental laws, safety regulations, public policy, or labour laws get in the way of the MNCs’ profits. Thus, it has been pointed out that when Egypt attempted to raise its minimum wage recently, a French water concessionaire operating in the country lodged an ISDS suit against the Egyptian government.
Under the agreement, pharmaceutical companies, which are among those enjoying access to negotiators as “advisers”, can challenge any attempt to make generic drugs more affordable by claiming that such measures undermine their new rights granted by the (TPPA) deal. In the financial sector, the agreement will water down regulatory safeguards put in place after the 2008 financial crisis and block any ban placed on risky financial products, including those toxic derivatives that contributed to the crisis in the first place.
Chapters 9, 10, 11 of the TPPA provide a free rein to the operations of international finance capital via the dismantling of capital controls, prohibition on financial taxation and by undoing the stabilising tools set up in certain economies to counter the 2008 financial meltdown. Stiglitz has warned that the TPPA presents "grave risks" as it "serves the interests of the wealthiest”.
2. Negative impact on Malaysian SMEs
According to the PricewaterhouseCoopers' (PWC) study of the impact of the TPPA on the Malaysian economy and society,
“[…] there is potential for negative impacts on bumiputera businesses and SMEs but these impacts appear to be largely mitigated based on the concessions secured by Malaysia. The potential negative impacts are mainly due to bumiputera businesses being domestic-oriented, and dependent on government contracts and vendor programmes.
“However, there is a need to transform bumiputera businesses and SMEs to reap the full benefit of the TPPA… Despite the concessions, there is a need for programmes to increase the competitiveness of bumiputera businesses and SMEs, especially in the areas that will be open to foreign competition.”
According to the same study, only 38 percent of the SMEs in Malaysia are bumiputera-owned while the majority are non-bumiputera-owned and operated. While it is not clear how bumiputera businesses which are not dependent on government contracts and vendor programmes are expected to cope, as usual the government does not elaborate on how, if any, the 62 percent of the non-bumiputera-owned SMEs will be assisted during the onslaught by these multinational corporations after the TPPA is in place.
In recent years, SMEs in the services sector have been affected by increasing international competition. This is a major concern for SMEs which have not been able to develop their capabilities or to grow when the sub-sectors were liberalised. It is therefore surprising that the Chinese community, especially the mainly Chinese-operated SME sector, has not been more vocal in its response to the TPPA.
3. Erosion of democracy and human rights
The TPPA does not look good for democracy and human rights in the participating countries. First of all, the secrecy of the TPPA negotiation process itself was an affront to the principles and practice of democratic governance.
It has been claimed by the US government that the TPPA will be in the interest of Malaysian workers because the Malaysian government will have to abide by the stipulations relating to labour standards.
Organised labour in the United States has criticised the TPPA, arguing that the trade deal would largely benefit big business at the expense of workers in the manufacturing and service industries. Chomsky has also warned that the TPPA is "designed to carry forward the neoliberal project to maximise profit and domination and to set the working people in the world in competition with one another so as to lower wages”.
The White House has said that the TPPA is “a high standard trade agreement that levels the playing field for American workers, and businesses, supporting more made-in-America exports and higher paying American jobs”. In fact, the logic of neoliberal trade agreements like TPPA is to drive jobs to wherever they are the cheapest without a care for labour rights and labour protections as has been clearly evident in the record of MNCs all these years.
Since when have the MNCs championed international standards for workers’ rights throughout the world? Have MNCs suddenly developed a soft spot for “Trans-Pacific” workers compared to workers in the rest of the world?
Would the Malaysian government and MNCs like us to believe that the anti-union laws and policies that have been in place in this country since the Free Trade Zones were established in the seventies will give way to a new deal for all workers in Malaysia once the TPPA is ratified? Can the government spell out in no uncertain terms what workers can expect in terms of organisation and workers’ rights when we ratify the TPPA?
The chapter on labour and labour rights (Chapter 19) offers nothing substantive or meaningful, merely fluffy minimal enforcement of workers’ rights, and mandated “cooperation” to diffuse adversarial relations between workers and employers. It also contains provisions that allow foreign companies to bypass Malaysia’s industrial courts during labour disputes by the setting up of a "labour council" to mediate such disputes, and if a resolution is not reached in 60 days, the case can be referred for arbitration through the ISDS system.
It has also been pointed out that the TPPA will facilitate corporations’ control and possession over what people all over the world have come to expect as their “commons”. Hence, the internet will be increasingly privatised and subject to surveillance while the right to privacy, open communication, reporting, comment, teaching and research will be curtailed. The restrictive interpretation of US Copyright and Intellectual Property laws would become the global standard. This has grave consequences for the freedom of expression and right to information.
The human right to health will be curtailed when the TPPA reduces access to basic lifesaving generic medicines and medical procedures while public health measures will be privatised and medicines and medical services become unaffordable. And according to Food & Water Watch, under a TPPA regime, “agribusiness and biotech seed companies can now more easily use trade rules to challenge countries that ban GMO imports, test for GMO contamination, do not promptly approve new GMO crops or even require GMO labelling”.
Thus, the human right to a safe environment and the sovereignty of our nation will be curtailed when the MNCs can sue the local government that tries to put a moratorium on mining or other resource extraction that are hazardous to health of the local community.
We demand full public consultation on TPPA
It is instructive that with the election of the reform-minded Prime Minister Justin Trudeau in Canada, the Council of Canadians has demanded a full public consultation before Trudeau goes any further with the deal.
They have cited concerns over how the TPPA would impact human rights, health, employment, environment, and democracy. Since our prime minister has often professed to be likewise concerned about reform and transformation, we call on the government to undertake a full public consultation on this potentially disastrous treaty and to answer the questions we have raised.
KUA KIA SOONG is Suaram adviser