KUALA LUMPUR, July 25 (Bernama) -- The intense debate brewing over the Trans-Pacific Closer Economic Partnership Agreement (TPPA) must not be allowed to mask the obvious advantages for Malaysia.
This is in terms of market access to over 700 million consumers, potentially cheaper imports and the chance to bid for government contracts in member economies.
Malaysian contractors can vie for government procurement contracts in neighbouring TPPA countries, particularly in Brunei, Singapore as well as Australia and New Zealand, a trade expert said.
Dr Sufian Jusoh, a Senior Fellow and Associate Professor, Faculty of Law, Universiti Kebangsaan Malaysia, said although stakeholders could be concerned about foreign firms eating into local contracts, and as a result continue harping on the downsides, the focus should also be on the benefits from an expanded regional market.
For instance, while Malaysia's government procurement market was estimated at US$28.1 billion in 2012, the combined market for government procurement in all 12 TPPA markets was at US$2.74 trillion.
The TPPA is important for Malaysia due to its reliance on trade and industry, increased opportunities for foreign direct investment, enhanced competitiveness and the ability to build up business and technical capacity.
"Malaysia will also enjoy lower or zero-rated tariffs for goods and market access for services.
"The government can on the other hand, negotiate for local companies to have access to technical assistance to upgrade their standards such as in agriculture or fisheries from other TPPA economies," he said during a talk on, "A Creature Called TPPA" at Wisma Bernama here today.
Politicians, non-governmental organisations (NGOs) and various interest groups have condemned Malaysia's participation in the TPPA negotiations, alleging, among others that it would jeopardise bumiputra interests and about 600,000 foreign companies would enter the domestic market.
In reality, Malaysia can limit the access to foreign contractors as far as government procurement is concerned or reserve the right in certain sensitive areas known as "carve-out" in the annexe of non-conforming measures, limiting the entities in the annexes to the Government Procurement Chapter, or put in place high thresholds to the access to government procurement.
Malaysia is currently playing host to the 18th round of TPPA negotiations in Kota Kinabalu attended by Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, United States, Vietnam.
"The advantages go beyond tariffs," said Sufian, who is also an External Consultant and Senior Fellow at the World Trade Institute in Bern, Switzerland.
He also said concerns that Malaysia would lose its sovereignty upon signing the TPPA were misplaced as the text to the agreement is a result of a joint effort by the negotiating countries and not dominated by any single member or economic superpower as alleged by certain quarters.
In drafting the text of the agreement, the participating countries including Malaysia, will have an opportunity to submit their proposals although individual countries could have strong positions on certain trade sectors.
For instance, he cited how the United States has a strong text on pharmaceuticals, especially on the extension to patented medicines. "But most of the other negotiating countries object to their position, which means it would be possible for the proposal to not be included in the agreement," he added.
He said even if pharmaceuticals were included in the TPPA, he said that the Malaysian government could maintain its purchasing policy, and have the flexibility in buying cheaper generic drugs for off-patent medicines as opposed to expensive patented medicines.
"Rather than the US, Malaysia should exercise caution in negotiating trade pacts with the European Union and especially Switzerland, which have a higher level of pharmaceutical productions and exports of patented medicines.
"Europe is home to many of the world's drug manufacturers with the pharmaceutical sector a major proportion of their Gross Domestic Product, which means they will do everything possible to protect the industry," Sufian added.
He also dismissed allegations by local politicians and NGO's as well interest groups that multinational corporations would dictate terms to Malaysia in areas such as investment or even sue the country if their conditions were not met.
"They can only take countries to court for arbitration for breach of the certain obligations under the TPPA," he said, giving the assurance that Malaysia's team of negotiators were an experienced lot, and would not sell out the country as alleged by some.
Asked if the pact would be signed later this year, Suffian said he was pessimistic about any signing in 2013, as there are many areas yet to be concluded in the negotiations.
