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TWN Info Service on Free Trade Agreements 16 January 2007 The third round of negotiations
was held in But the Democrat sweep of
the US House of Representatives and the Senate in the November mid-term
elections has thrown a small spanner in the works. The Democrats have
traditionally not been terribly excited about free trade pacts and may
be more protective of This in turn could add to US pressure on Malaysian negotiators to conclude a deal by the 1 July 2007 deadline - and before a careful analysis of the implications of the FTA can be carried out by the Malaysian side. US Big Business comes to town As expected, one of the main
areas of contention has been government procurement. A US FTA with Moreover, under the Ninth Malaysia Plan (2006-2010), the government is expected to spend a mouth-watering RM200 billion on various projects related to construction, education and essential infrastructure. And US negotiators could be eyeing a slice of the cake as well. The issue of market access
for US products and services in US negotiators want not only
market access but also laws that promote and protect their interests
in this country in a legally binding manner. From the An FTA could thus severely limit the government's economic policy options especially when it comes to infrastructure spending as a 'pump-priming' tool to boost economic growth. The government's ability to manoeuvre the local economy in terms of policy space will be highly restricted. But International Trade and
Industry Minister Rafidah Aziz provided an assurance: "The agreement
will not be signed if the But even without the FTA, Malaysian national carmaker Proton has been gradually losing market share. Malaysian banks, for their part, have been consolidating and merging in anticipation of foreign competition - but some analysts believe they are still ill-equipped to go head-to-head with global banking giants in a free-for-all market. So how will they fare with an FTA in force? Farmers and patients worried Indeed, the FTA will have
serious ramifications for a whole range of sectors. About 116,000 farmers
in the "rice bowl" in the north-western region of The Kedah Farmers Action Committee says it hopes that the government will postpone the discussions until the FTA and its implications are made known to the farmers. Other activists are worried
that the The big pharmaceutical firms argue that it is expensive to carry out clinical tests and it would be unfair to allow generic manufacturers to use such test data without their incurring the costs of clinical trials as well. But critics counter that a data exclusivity provision would be an added restriction for generic manufacturers and thus make it more expensive for the poor and those with HIV/AIDS to buy essential drugs. Obsession with patents Of course, there is also the whole business of patenting. US negotiators are likely to push hard for stronger protection of intellectual property rights. US FTAs usually makes demands that are 'TRIPS (Trade Related aspects of Intellectual Property Rights)-plus', that is, they go beyond a country's commitments to the World Trade Organisation. The Americans seem obsessed with patents. And if we are not careful, we might find ourselves on the losing side of the patenting game, especially if foreign multinationals begin patenting our genetic resources including the natural heritage within our rainforests. Nothing seems to be beyond the reach of these patents. There is a Norwegian company, for instance, that claims it has the exclusive patent right for a certain breed of "genetically improved" tilapia fish and it insists that no one else is allowed to breed this particular breed for commercial purposes. The same thing could happen to certain types of seeds used by our farmers. The Americans have the best patent lawyers in town. Are our Malaysian patent lawyers any match for them? An FTA could also throw a spanner into the efforts of the Malaysian government to promote the use of open source software - rather than expensive proprietary software. It will also add pressure on the government to privatise or 'liberalise' more services. How it all began Under a US Trade Promotion Authority (TPA) law, which was introduced in 2002, the Core labour standards? Yeah, right... I almost fell off my chair
laughing when I heard the The only reason the Americans are now advocating a minimum wage is to ramp up our cost of production so that local firms will lose their competitive advantage over foreign firms. Not because the Americans are interested in our workers' welfare. (All the same, from an ethical and justice point of view, we must have a minimum wage to ensure our workers are able to live with dignity and to reduce income disparities.) For the same reason, the Americans say they are interested in promoting the "right of association". But I remember what happened when, many moons ago, our Human Resources Minister announced the government would allow the formation of a national union for electronic workers: within days, he was forced to reverse his decision due to pressure from the multinational corporations already in the country. Fired for a funny expression If anything, US firms would love it if the Malaysian government were to make it easier for employers here to fire local workers at their whims and fancies. Job security for Malaysians could be at stake as both Malaysian and US firms want to make it a lot easier to fire workers. In its public submission
for the FTA, the American Malaysian Chamber of Commerce (Amcham) and
the US Chamber of Commerce observed: '' Imagine that, employers are
still not happy with our already weak labour laws! Amcham obviously
wants to make it a lot easier for employers to fire people. Perhaps
they want And what is job security
like in the Listen to what Barbara Ehren-reich, a foremost journalist, dissector of class and author of the classic book, Nickel and Dimed, had to say in a recent interview with publisher Tom Engelhardt: "I was in It is this easy ability to fire workers that corporations, both Malaysian and foreign, crave for. But such a policy would have dire consequences for workers - especially in a country with no unemployment benefits like ours. "Ask your government!" The problem is while the
Americans are going around and putting their "spin" on how
Malaysia stands to "benefit" from this FTA (as if the US is
doing us a big favour, when we know they are eyeing our financial services
sector and government procurement), the Malaysian government has been
largely silent. There has been no popular input or consultation with
say, the rice farmers in Kedah, who are really worried about agriculture
imports. Neither has there been much media coverage, public consultation
or parliamentary scrutiny of the impact the FTA is likely to have on
When an American speaker
from a The carrot and the missing sling-shot In a hurry to conclude the deal by the end of 2006, US officials have dangled a carrot in front of Malaysian negotiators. They claim that the lack of an FTA has barred Malaysian firms from bidding for US$250 billion worth of US government procurement contracts. But is that really the case?
Isn't it true that, in 2005, US firms accounted for 94 per cent of total
So, realistically, how much can Malaysian firms get out of this 6 per cent of US government procurement? The unequal negotiating strength
between the You can be sure that whatever
agreement that is concluded will prove to be far more beneficial to
the One visiting Canadian professor
- and Canadians should know, as they are part of the North American
Free Trade Agreement (NAFTA) - had this warning for Malaysians: "You
have no idea what you are getting into. It's like
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