[A2k] Malaysia-US FTA negotiations hit turbulence (Aliran)

[Sangeeta]

Quote from Aliran Monthly

"Other activists are worried that the United States could ask for =93test d=
ata
exclusivity=94 =96 the protection of clinical test data - to be enforced on
cheaper generic drugs such as anti-HIV medication.

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

Of course, there is also the whole business of patenting. US negotiators ar=
e
likely to push hard for stronger protection of intellectual property rights=
.
US FTAs usually makes demands that are =91TRIPS (Trade Related aspects of
Intellectual Property Rights)-plus=92, that is, they go beyond a country=92=
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 i=
f
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 =93genetically improved=94 tilapia fish and it insists tha=
t 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 paten=
t
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 =91liberalise=92 more services."

-----------------------------------------------------

Malaysia-US FTA negotiations hit turbulence
Tuesday, 09 January 2007
Aliran Monthly

The fourth round of negotiations for a US-Malaysia Free Trade Agreement is
currently in progress in San Francisco, but Malaysians have no idea what
they are getting themselves into, warns Anil Netto.

Disagreements have surfaced in the third round of negotiations in November
for a Free Trade Agreement (FTA) between Malaysia and the United States.
This has provided a glimmer of hope for a civil society coalition that has
been actively campaigning against the FTA for fear that it could be damagin=
g
to Malaysia=92s economic sovereignty and to the interests of workers, the p=
oor
and the marginalised.

The third round of negotiations was held in Kuala Lumpur in early November
while a fourth has been scheduled for December in Washington. US officials
are reportedly hopeful that the agreement can be wrapped up by the end of
March and sealed before the expiry on 1 July 2007 of a fast-track Trade
Promotion Authority that gives President George Bush the power to negotiate
trade deals with a simple congressional approval.

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. Th=
e
Democrats have traditionally not been terribly excited about free trade
pacts and may be more protective of US domestic trade while a
Democrat-controlled House may not be keen to renew the fast-track authority=
.

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 Malaysia may include provisions that could allow
US firms to bid for Malaysian government contracts. This could undermine
Malaysia=92s affirmative action policy of favouring bumiputera-controlled
enterprises.

Moreover, under the Ninth Malaysia Plan (2006-2010), the government is
expected to spend a mouth-watering RM200 billion on various projects relate=
d
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 Malaysia is also
likely to figure prominently in negotiations. The United States is
especially interested in a bigger slice of the action in the protected
Malaysian car industry and the financial services sector, where there are
restrictions on foreign-owned banks.

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 US perspective, these =93free trade=94 negotiations are designed to pro=
mote
the rights of US Big Business in Malaysia.

An FTA could thus severely limit the government=92s economic policy options
especially when it comes to infrastructure spending as a =91pump-priming=92=
 tool
to boost economic growth. The government=92s 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: =93The agreement will not be signed if the US is found to have
interfered in the country=92s procurement and determining of policies.=94 S=
he
said sectors that could benefit were electronics and agriculture goods,
textiles and clothing, rubber and wood products.

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 =93rice bowl=94 in the north-western
region of Malaysia could be especially vulnerable. Some of them have alread=
y
expressed fears that their livelihoods could be jeopardised if Malaysia
lowers import tariffs (currently around 40 per cent) and opens its domestic
market to US agricultural producers.

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 United States could ask for =93test da=
ta
exclusivity=94 =96 the protection of clinical test data - to be enforced on
cheaper generic drugs such as anti-HIV medication.

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 ar=
e
likely to push hard for stronger protection of intellectual property rights=
.
US FTAs usually makes demands that are =91TRIPS (Trade Related aspects of
Intellectual Property Rights)-plus=92, that is, they go beyond a country=92=
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 i=
f
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 =93genetically improved=94 tilapia fish and it insists tha=
t 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 paten=
t
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 =91liberalise=92 more services.

How it all began

Malaysia is the United States=92 10th largest trading partner. Two-way trad=
e
between the two countries stood at US$44 billion (RM160 billion) in 2005.

Under a US Trade Promotion Authority (TPA) law, which was introduced in
2002, the United States has entered into similar free trade agreements with
its other trading partners. Regionally, it entered into an FTA with
Singapore in 2002 and was in negotiations with Thailand. The negotiations i=
n
Thailand were opposed by civil society groups and the subsequent military
coup there added a further element of uncertainty.

Malaysia, for its part, entered into a trade and investment framework
agreement (TIFA) with the United States in May 2004. On 8 March 2006,
officials from both countries announced that they would be entering into FT=
A
negotiations. A delegation of activists submitted a petition to Malaysian
negotiators meeting at a beach hotel in Penang when the first round of
negotiations kicked off in June this year.

Core labour standards? Yeah, right...

I almost fell off my chair laughing when I heard the United States is
interested in promoting =93core labour standards=94. They think we don=92t =
know
what happened in Latin America in the 1980s, when trade unionists and
grassroots activists suffered at the hands of American-backed regimes  =96
many of them persecuted, tortured and killed by death squads.

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=92 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
=93right of association=94. But I remember what happened when, many moons a=
go,
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 mak=
e
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 an=
d
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: =91=91Malaysia=
=92s
current employment laws are too restrictive and unbalanced against
companies, thus making it very difficult for employers to terminate
under-performing employees.=92=92

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 Malaysia=92s labour laws to be similar to those i=
n
the US?

And what is job security like in the United States?

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:

=93I was in England recently talking about (my book) Bait and Switch, my
publisher told me: =91You know, people aren=92t quite understanding what yo=
u=92re
saying, how you could be laid off or fired without any procedure.=92 They
didn=92t understand the concept of employment at will. So I had to explain
that, in America, you have no rights: no right to your job, no right to a
hearing. You could be fired for a funny expression on your face.=94

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 =96 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 =93sp=
in=94
on how Malaysia stands to =93benefit=94 from this FTA (as if the US is doin=
g us
a big favour, when we know they are eyeing our financial services sector an=
d
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 Malaysia.

When an American speaker from a US think-tank was asked by a Malaysian
activist about the lack of transparency in the FTA negotiations, he
retorted, =93You are asking the wrong person. You should ask your own
government.=94

So let=92s ask again, where is the transparency?

People would like to know if the government has done a comprehensive
cost-benefit analysis to ensure that Malaysia doesn=92t lose out.
=95    Will this FTA lead to higher pharmaceutical prices, for instance?
=95    Will our farmers suffer as a result of the opening of our market to
agricultural imports from the US?
=95    What happens when US global financial and banking giants enter Malay=
sia
in a big way?
=95    Will the leeway given to US corporate giants in the local economy
reduce the space for our government to plan the economy so that it benefits
the ordinary person (rather than Big Business)?
=95    Will Malaysian firms simply be overpowered by the might and muscle o=
f
the MNCs?

Activists believe transparency in negotiations is key. If there is
transparency, then the pressure will be on the Malaysian and US governments
to come up with a fair deal. But if the negotiations are kept secret, the
Malaysian negotiators will have to horse trade (during the negotiations) an=
d
give up certain things because they have no public support.


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 lac=
k
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=92t it true that, in 2005, US firms
accounted for 94 per cent of total US government procurement while the
remaining 6 per cent was split among firms based in 170 countries and
territories?

So, realistically, how much can Malaysian firms get out of this 6 per cent
of US government procurement?

The unequal negotiating strength between the US negotiators and their
Malaysian counterparts remains a major source of concern. The United States
is a global economic powerhouse while Malaysia is only an emerging economy.
Moreover, the United States, Malaysia=92s largest trading partner, has plen=
ty
of experience in negotiating FTAs while Malaysia, an emerging economy, has
relatively little.

You can be sure that whatever agreement that is concluded will prove to be
far more beneficial to the United States and their multinational
corporations than to us.

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: =93You have no idea what you are getting into. It=92s like
Malaysia is David and you are up against Goliath (the US) and you have
forgotten to bring your sling-shot.=94


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