TPPA : No clear road ahead

The recently concluded meeting on the TPPA (Trans Pacific Partnership Agreement) on Tuesday has not given any indication on the success of the negotiations thus far.

The ambitious 2-nation free trade plan, has hit a new roadblock after four days of negotiations in Singapore.

BBC reported that sticking points over market access and differences over tariffs on imported goods were the main reasons for the impasse. Negotiators were initially hopeful that a draft deal would be ready in April.

That is when US President Barack Obama is scheduled to visit the region.

Twelve countries are involved in the TPP talks: Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

The TPPA aims to create a trade pact for the movement and goods and services in market with a combined gross domestic product (GDP) of US$28 trillion s with a population of 800 million people.

TPP members were also aiming to set a common trading standard on a range of issues, including labour regulation and environmental protection.

The TPPA discussions have been shrouded in secrecy as there is a confidentiality chapter among the 29 chapters of the TPPA.

However, Minister of International Trade and Industry, Datuk Seri Mustapha Mohamed had said last week that the draft TPPA would be debated in Parliament before Malaysia signs on the dotted line.

However, there have numerous groups who are opposed to the TPPA in the country. Among the most vocal has been Bantah TPPA (Oppose TPPA) which is a coalition of non-governmental organisations (NGOs) which last week said it would discontinue talks on the TPPA with the government.

The reason given for the pullout from the talks was due to the confidentiality clause in the TPPA which prevented the government from disclosing or sharing the provisions of the TPPA with Bantah TPPA.

The NGOs were against the TPPA because of certain controversial provisions in the agreement.

The government procurement chapter under the TPPA which runs counter to the Bumiputera preferential treatment for government contracts has also come under fire.

However, the government has said that the TPPA will have certain carved out provisions which will provide exemptions to the general provision and the government procurement chapter will have this provision.

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Another chapter disputed under the TPPA is on intellectual property and the concern among organisations opposed to the TPPA is that the patent on drugs will be extended and this will cause the cost of drugs to spiral. Consumers would not be able to buy certain generic drugs.

Another contentious chapter under the Investor State - Dispute Settlement (ISDS) is that investors can take governments to international courts to adjudicate on matters by bypassing the local court systems. This measure also has serious repercussions on the sovereignity of a nations as disputes would be settled by international.

The TPPA also seeks to reduce the state’s participation in businesses under the State – Owned Enterprises (SOE) chapter.

For countries such as Malaysia, state owned enterprises such as Khazanah Nasional Bhd play an important role in the national agenda and asking it to pare down its holdings may not be feasible.

Some analysts had suggested the US might be trying to use the TPPA as a means to undermine China's growing economic power in the region.

But differences on the issues of tariffs on imported goods, particularly between the US and Japan, are becoming difficult to overcome.

Agricultural tariffs have become a bone of contention for Japan, which is trying to protect its rice, wheat, beef and pork as well as dairy and sugar from outside competition.

Meanwhile, other TPP members with a fairly large agricultural sector available for export, are pushing for the elimination of all tariffs.

The road ahead seems uncertain for the TPPA and to sign a trade agreement which will affect the lives of millions for many years to come under so much uncertainty seems not possible at this juncture.

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