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Malaysia forfeits right to regulate foreign firms in TPP, warns CAP

June 25, 2012

Harakahdaily, 25 June 2012 

Jun 25: Citing leaked documents from the Trans-Pacific Partnership Agreement of which Malaysia is a part of, vocal consumer rights group Consumers Association of Penang has warned that the Malaysian government has agreed to a provision which would undermine the country’s sovereignty.

One of the provisions of the TPP as shown in a leaked chapter on investment uploaded by Washington-based non-governmental organisation Public Citizen states that foreign investors and private corporations are to be given more rights to regulate how those firms operate within member countries.

CAP said this confirmed its earlier fears that the pact would empower foreign firms to skirt domestic courts and sue the government in foreign tribunals if they were not happy with local regulations, and thus put taxpayers’ money at risk.

“This is tantamount to placing foreign corporate interests above the welfare and interests of our own citizens,” said CAP president SM Mohamed Idris in a statement to Harakahdaily.

TPP, also known as the Trans-Pacific Strategic Economic Partnership Agreement, is a free trade agreement aimed at liberalising Asia-Pacific economies.

The grouping, a US strategy to link its economy to fast-growing markets in the region, now includes the United States, Australia, Canada, New Zealand, Peru, Mexico, Chile, Singapore, Malaysia, Vietnam and Brunei.

Referring to ‘Section B’ of the leaked text, Idris (right) further pointed out that the tribunals would not meet standards of transparency common to any of the TPP countries’ domestic legal systems, and would be staffed by private sector lawyers who rotate “between acting as judges and as advocates for the investors suing the governments”.

‘Australia refused, why can’t Malaysia?’

Idris also questioned why the Malaysian government could not have followed the decision of Australia which has refused to agree to the provision.

“If the Australian government could reject this provision, why could not the Malaysian government have done the same?” he asked.

The leaked provision among others gives broad definition of ‘investment’ that includes protecting intellectual property rights, mining and manufacturing licences, exempts investors from new regulations by member states, and binding state and local government authorities to commitments by the Federal government.

“This would greatly restrict Malaysia’s ability to continue developing its regulations including in response to new threats such as climate change and financial crises or to new information (on, for example, the toxicity of a chemical or food ingredient),” said Idris.

He added with the provision, tobacco companies could now challenge Malaysia’s regulations as was the case when they sued Uruguay and Australia for their tobacco control measures.

CAP called on the government to suspend its participation in the TPP negotiations “until the texts and all relevant documents have been disclosed for public scrutiny by the Malaysian public”.

Prior to this, former prime minister Dr Mahathir Mohamad warned that Malaysia’s participation in TPP was a way for the United States to access contracts for government procurements and continue its hegemony in the Asia Pacific region.

“This is something which every country, including the United States uses to support domestic businesses and industries. Once the United States gains access, not only will it make bids but their Government pressure would be used to favour their companies,” said Mahathir, comparing the treaty to the Western-sponsored Asia Pacific Economic Conference (APEC) and the failed General Agreement on Tariff and Trade (GATT).

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