TWN Info Service on Free Trade Agreements

07 February 2007


Protest at US embassy as Malaysia-US FTA talks proceed

On Wednesday, a group of people representing NGOs, political parties, workers' organisations and people living with HIV/AIDS held a peaceful demonstration outside the US embassy in Malaysia to register their concern over the potential negative impacts of the US-Maalysia FTA talks.

They submitted a memorandum addressed to the US ambassador to Malaysia calling for a halt to the negotiations currently in its fifth round and being held in Sabah, East Malaysia.

The memorandum, signed by over 40 NGOs and political parties, expressed concern over the possible lost in jobs should the agreement is signed while taking the US to task for imposing pressure on Malaysia to conclude the negotiations.

For further information on the demonstration see the report below (Item 1). A copy of the memorandum is also included (Item 2)


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Item 1

Protest at US embassy as Malaysia-US FTA talks proceed

Kuala Lumpur, 7 Feb (Chee Yoke Heong) -- As Malaysia and the US engaged in another round of bilateral talks to finalise a free trade agreement (FTA), a group of citizens staged a peaceful protest outside the US embassy in Kuala Lumpur Wednesday.

About 100 people representing NGOs, political parties, workers' organizations and people living with HIV/AIDS gathered with banners and placards highlighting the potential negative impacts of the talks.

The protestors shouted "Stop FTA, Stop" and "Down FTA, Down" and held up placards reading "Don't trade our lives" and "People before Patent". On guard was a large contingent from the police force, some armed with batons, shields and weapons in standby mode.

A group of people living with HIV/AIDS carried a 'coffin' to send a powerful message of the deadly implications of the agreement on the cost of drugs.

According to A. Sivarajan of the Coalition Against the US-Malaysia FTA, Wednesday morning's event is significant because it is the first time that the group has directly attempted to engage the US government. Various concern groups have previously sent memorandum and petitions expressing their worries to the Malaysian government.

He expressed disappointment that the talks are continuing despite the absence of any assessment being done on the impact the FTA will have on many segments of society. Given the negative experiences of other countries which are also negotiating FTAs with the US such as Korea and Thailand, it is likely that Malaysia will also bear the brunt and therefore talks should not go ahead until the effects on the public as well as the various sectors are fully assessed.

The protestors also criticised the secrecy in which the negotiations are being conducted and called for a more transparent process.

According to Jeyakumar Devaraj of the Coalition Against the Privatisation of Health Care Services (CAPHS), the negotiations are being conducted in a non-democratic and un-transparent manner. Before the agreement is signed, the public must be told of the terms of the proposed FTA so that the effects on workers, farmers and others could be known, he added.

CAPHS is particularly opposed to the intellectual property aspects of the US-Malaysia FTA which it says will raise the prices of medicines, as the agreement would impose IPR standards that are higher than the WTO's TRIPS agreement. For example, the US is likely to propose that the duration of patents be extended, and that the grounds for compulsory licenses be limited.

The protestors also took to task the US for pressuring the Malaysian government to conclude the talks. They said the US should instead respect the democratic right of the Malaysian people to have a say in a matter that is going to affect many aspects of their lives.

Representatives from 10 NGOs handed over a memorandum to a US embassy official to register their concern.

The memorandum which was addressed to the US ambassador to Malaysia expressed worry that the FTA would lead to a loss of jobs in both the agriculture and industrial sectors, as based on the existing US FTAs, the US is likely to require Malaysia to lower all of its tariffs on US products, whether agricultural or manufactured.

In the case of agricultural workers, their livelihoods could be threatened as they might find it difficult to compete with US subsidised agricultural products. This was the case in Mexico where three million of Mexico's ten million farmers could no longer make a living from farming following the signing of the North-American Free Trade Agreement because of the flood of US subsidised corn when Mexico lowered its tariffs.

Similarly, there is concern that the lowering of industrial tariffs could cause a flood in US products which could spell trouble for Malaysian factories and their workers. According to the US National Association of Manufacturers, it is estimated that the US will double its manufacturing exports to Malaysia in the first two years of the US-Malaysia FTA if it is signed.

Wednesday's demonstration is part of the on-going efforts against the FTA which in recent weeks included a signature campaign in the northern region of the country that won support from about 20,000 fishermen and farmers, and a joint declaration by Malaysian and US trade unions voicing dissatisfaction over the talks.

Malaysia and the US entered into the fifth round of negotiations on the FTA on Monday that will last until Friday in Sabah, a Malaysian state on the island of Borneo.

According to press reports from Sabah, the areas that are under discussion thus far included goods, services, investment, trade capacity building, financial services, labour, environment, transparency, competition and agriculture.

Despite calls by NGOs, opposition parties and others for greater transparency in the talks, the government has largely remained silent on developments except for the few releases and public statements giving scant information on the talks.

The schedule has been intense with talks being held back-to-back with the next round expected to take place next month. The last round was held in January in the US. The US hopes to wrap up the talks by the end of March before the expiry on 1 July of President Bush's trade promotion authority, which allows the President to negotiate trade pacts that Congress can only approve or reject, without making any changes.

Many observers doubt that the March deadline can be met as many issues remain contentious, including government procurement, investment, intellectual property and agriculture.

Last week, a new crisis emerged when the US House of Representatives Foreign Affairs Committee Chairman Tom Lantos wrote to the US Trade Representative, urging suspension of the FTA talks with Malaysia to protest an energy development deal signed last month between Malaysian private corporation SKS and state-owned National Iranian Oil Company.

Malaysia threatened to end free trade talks with the US if it is asked to end the energy development deal with Iran and said it will not be pressured by US demands.

"We reject the pressure being inflicted upon us... Do not bring any political matters into trade", Prime Minister Abdullah Badawi was quoted as saying.

But Schwab is unperturbed. "We are pressing ahead with Malaysia for the FTA talks," she was reported to have said. Describing Malaysia as a "tough negotiator," she hoped that talks will be wrapped up by the next round in March. +

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Item 2

To,
Mr, Christopher J. LaFleur
Ambassador of the United States to Malaysia
Embassy of the United States
376, Jalan Tun Razak,
Kuala Lumpur

US HANDS OFF MALAYSIA
STOP MALAYSIA -US FTA NEGOTIATIONS IMMEDIATELY

We are concerned Malaysian organizations and citizens have come together to express our opposition to the on going US-Malaysia Free Trade Agreement (FTA) negotiations.

The United States through its Deputy US Trade Representative Karan Bhatia last week (1/2/2007) warned that the failure of free-trade talks with Malaysia would send a message that the two countries were "not open for business" and that "It will drive investors elsewhere and create potential frustrations in the bilateral economic relationship."

This is an intimidation and harassment by the United States to colonialise Malaysia through economic domination as Washington wants to conclude negotiations on the free trade agreement (FTA) by the end of March, in time to present the deal to Congress before the president's fast-track Trade Promotion Authority expires on July 1.

Furthermore, statements by the US Congressmen to stop FTA talks with Malaysia as Malaysia has energy deals with Iran is an attempt to dictate Malaysia's external and internal policies and relationships with other countries. This is a threat to the sovereignty of Malaysia as an independent nation.

We also understand that previous US FTA with other countries have had a negative impact on their agricultural and manufacturing sectors.
For example, in Senegal 1/3 of the manufacturing workers lost their jobs because of the lower tariff towards industrial product. In Chile, 8% of the workers lost their jobs for the same reason.

Based on existing US FTAs which are very similar, we expect the US will require Malaysia to lower all of its tariffs on US products, whether agricultural or manufactured.

As workers, we are worried by the New York Times report that three million of Mexico's ten million farmers could not longer make a living from farming after NAFTA because of the flood of US subsidized corn when Mexico lowered its tariffs.

One-third of Malaysia's industrial tariffs are still unbound, so the Malaysian Government can raise them to protect Malaysian jobs at any time. If these all have to be reduced to 0% and locked there, will US products pour in? The US National Association of Manufacturers estimates that the US will double its manufacturing exports to Malaysia in the first two years of MUFTA if it is signed. As industrial workers, we are concerned that this may mean that Malaysian factories in the affected sectors will be in trouble.

Besides that, US FTAs tend to provide excessive protection for multinational investors and their profits while being weak on labour rights. Unionists and the workers are worried that MUFTA would cause more workers to lose benefits such as health insurance.

This is because , since the 1970's the Malaysian government has bowed to the pressure of US Multinationals where a National Union for Electronic Workers is not allowed due to pressure from the US Multinationals pressure. If before the FTA , the multinationals can dictate terms on the government what more now after the FTA is signed. It looks like the Malaysian government will be forced by US businesses to amend local labour law and deprive workers of their rights.

Furthermore, the European Union's independent analysis of the impact of lowering tariffs in its FTA with North Africa found that the FTA would cause a significant rise in unemployment, a fall in wages and be bad for: poverty, hunger, education and health. Even in South Korea where another US FTA negotiations is going on, it has been estimated more than 100,000 people will lose their jobs when the US-Korea FTA comes into effect.

According to the United Nations' International Labour Organization (ILO) paper on the NAFTA experience, Mexico's real wages fell by 18% in the first three years of NAFTA before it was even fully implemented. Furthermore, only 15% of the increased investment inflows were invested in production and much of that had weak linkages to the domestic economy. This 'hot money' coming in suddenly left in 1995 and USFTAs prevent capital controls which can stop this turning into a financial crisis like Malaysia experienced in 1997. The financial crisis of 1997-8 caused per capita income to fall 30% in Malaysia and unemployment rose.

The increase in unemployment in urban areas of Mexico has led to widespread social problems according to the ILO paper on NAFTA.

Of course workers also have to be able to afford the medicines they need and the school textbooks for their children. These are likely to become more expensive because of the longer intellectual property protection required in USFTAs.

We are aware of citizen's protest around the world in relation to the US FTAs as has been the experience in Latin America and most recently in Thailand and Korea. We also know that in FTAs which have been concluded with the US, commitments by developing countries have gone far beyond their obligations in the World Trade Organisation. This is most unfair and unjust.

Because of these concerns, we demand the US Government to immediately STOP ALL NEGOTIATIONS WITH THE MALAYSIAN GOVERNMENT ON THE MALAYSIA-USA FTA!

WE MALAYSIAN REJECT THE US FTA ALL TOGETHER!

This memorandum have been endorsed by :

1. Alaigal
2. Aliran Kesedaran Negara ( ALIRAN)
3. All Women Action Society (AWAM)
4. Angkatan Muda Keadilan
5. Centre for Independent Journalism
6. Community Development Centre
7. Consumer Association of Penang
8. Democratic Action Party (DAP)
9. Food Not Bombs (FNB), KL
10. Gabungan Anak Muda & Pelajar, JERIT
11. Gabungan MAnsuhkan ISA (GMI)
12. Gabungan Pekerja Kilang & Kesatuan Sekerja, Bandar Baru Bangi
13. Gabungan Pekerja Kilang & Kesatuan Sekerja, Beranang
14. Gabungan Pekerja Kilang & Kesatuan Sekerja, JERIT
15. Gabungan Pekerja Kilang & Kesatuan Sekerja, Perak
16. Gabungan Peneroka Bandar & Perumahan, JERIT
17. Inter-varsity Council
18. Jaringan Rakyat Tertindas (JERIT)
19. Jawatankuasa Kebajikan Mahasiswa/I (JKMI)
20. Jawatankuasa Sokongan Masyarakat Ladang,JERIT
21. Jawatankuasa Bertindak Ladang Sungai Rinching
22. Jawatankuasa Ladang Semenyih
23. Kesatuan Guppy Plastic Sdn Bhd
24. KL & Selangor Chinese Assembly Hall Youth Section
25. Kumpulan Kemajuan Masyarakat
26. Malaysia Youth and Students Democratic Movement (DEMA)
27. Malaysian Treatment Access & Advocacy Group (MTAAG+)
28. Monitoring Sustainability of Globalisation
29. Panggau (Sarawak)
30. Parti Islam Semalaysia (PAS)
31. Parti Keadilan Rakyat
32. Parti Rakyat Malaysia (PRM)
33. Parti Sosialis Malaysia (PSM)
34. Pemuda Sosialis
35. Pusat Komunikasi Masyarakat (KOMAS)
36. Sadia (Sarawak)
37. Sahabat Alam Malaysia
38. Sisters In Islam (SIS)
39. Solidariti Mahasiswa Malaysia (SMM)
40. Suara Rakyat Malaysia (SUARAM)
41. Suara Warga Pertiwi
42. Third World Network