US Free-Trade Targets Asian Sovereignty, Stability

Malaysia & the Trans-Pacific Partnership Agreement (TPP)

Nile Bowie

September 22, 2012 

To commemorate Malaysia’s 55th Independence Day, Prime Minister Najib
Razak published an article highlighting the nation’s various
accomplishments, principally that while much of world’s economies are
“either flat or falling,” Malaysia is steadily delivering high figures
of economic growth. [1]
The ruling Barisan Nasional coalition, although perceived by the middle
class to be unpopular, has overseen consistent economic development and
has worked to raise incomes and provide consumer affordability. Despite
these achievements, the upper echelons of Malaysia’s ruling coalition
have seemingly endorsed a controversial international trade agreement
that will have enormous impacts on domestic consumers and will even
undermine the government’s own ability to issue legislation. The
Trans-Pacific Partnership (TPP) is a free-trade agreement led by the
United States in partnership with Asia-Pacific nations like Brunei,
Australia, New Zealand, Singapore, and others. If the agreement is
accepted by all participatory nations and successfully passed, signatory
countries must conform to a rigid set of legal regulations, including
strict intellectual property protections, authored by representatives of
big foreign corporations.

While critics of the agreement call
it “a stealth attack on democratic governance,” leading members of the
US Senate and Congress have expressed outrage over the TPP primarily due
to the climate of secrecy surrounding the negotiations. Six hundred US
corporate advisors have negotiated the TPP, and the proposed draft text
has not been made available to the public, the press or policymakers. US
Senator Ron Wyden, the Chair of the Congressional Committee with
jurisdiction over TPP, was even denied access to the negotiation texts. [2]
In Malaysia, members of parliament such as Charles Santiago have voiced
frustrations over Putrajaya’s unwillingness to release any information
regarding the agreement. [3]
Based on information contained in two leaked chapters of the TPP
agreement, the partnership aims to abolish the accountability of foreign
corporations to the governments of countries with which they trade by
introducing a myriad of new corporate rights and privileges. The
proposed agreement would make signatory governments accountable to
foreign corporations for costs imposed by national laws and regulations,
including health, safety and environmental regulations, mandating that
corporations receive compensation taken directly from domestic taxpayers
and public funds.

Advocacy website Public Citizen has confirmed the authenticity of a leaked chapter of the TPP titled, “Investment,”
and issued a detailed analysis of the text. In addition to the leaked
“Intellectual Property Rights” chapter, it can be concluded that the
agreement illustrates the major goal of US multinational corporations to
impose extreme foreign investor privileges and rights on developing
countries by giving individual corporations and investors equal standing
with each TPP signatory country’s government. NGOs such as the
Malaysian AIDS Council and the Breast Cancer Welfare Association
Malaysia have voiced their concern over the TPP’s restrictive
intellectual property laws, which allow American drug companies to
secure long-term monopolies on pharmaceutical products by preventing the
production of generic drugs, thus increasing the price of medicine. [4]
The United States is demanding aggressive intellectual property
provisions that extend existing patents on medicines for up to 10 years
in addition to the current requirement of 20 years. Malaysian Health
Minister Datuk Seri Liow Tiong Lai has spoken out against the TPP,
arguing that such an agreement would make healthcare less affordable to
the public:

are against the patent extension. According to the agreement, if a
medicine is launched in the US, and then three years later it is
launched in Malaysia, the patent would start from when it is launched
here and not when it was launched earlier in the US, this is not fair.”

The proposed legislation on Intellectual Property will have enormous
ramifications for TPP signatories, including Internet termination for
households, businesses, and organizations as an accepted penalty for
copyright infringement. In addition to allowing copyright holders to ban
parallel imports of copywritten material and prioritizing national
police to enforce copyright laws, a drastic expansion of copyright
duration for sound recordings and film is imposed. [6]
Signatory nations would essentially submit themselves to oppressive
copyright restrictions in line with American law, severely limiting
their ability to digitally exchange information on sites like YouTube,
where streaming videos can be considered copyrightable. Patricia Ranald,
convener of the Australian Fair Trade and Investment Network offers:

copyright and intellectual property rights demands by the US would lock
up the Internet, stifle research and increase education costs, by
extending existing generous copyright from 70 years to 120 years, and
even making it a criminal offense to temporarily store files on a
computer without authorization. The US, as a net exporter of digital
information, would be the only party to benefit from this.”

measures would restrict signatory nations from exercising capital
controls to prevent and mitigate financial crises and promote financial
stability. Malaysia was able to recover from the 1997 Asian Financial
Crisis more quickly than its neighbors by introducing a series of
capital control measures on the Malaysian Ringgit to prevent external
speculation. Under the TPP, nations would not have the ability to
independently pursue monetary policy and issue capital controls, and
must permit the free flow of derivatives, currency speculation and other
predatory financial instruments. [8]
Signatories to the TPP could have their domestic policies (health
policy, land use policy, government procurement decisions, regulatory
permits, intellectual property rights, monetary regulation) legally
overwritten before foreign tribunals, giving external investors the
right to pursue claims against a nation outside the regulations of that
nation’s own judicial system.

In the private “investor-state”
that the TPP is attempting to establish, national governments can be
sued by foreign corporations, submitting signatory countries to the
jurisdiction of investor arbitral tribunals, staffed by private sector
attorneys. Foreign tribunals could order governments to pay unlimited
cash compensation out of national treasuries to foreign corporations and
investors if new or existing government policy hinders investors’
“expected future profits”. Any compensation paid to private investors
and foreign corporations, in addition to large hourly fees for tribunals
and legal costs would be shouldered by the domestic taxpayer in each
signatory country. Under this regime, foreign investors and
multinational corporations can undermine the sovereignty of
participatory nations by skirting domestic regulations and limiting the
abilities of national governments to issue policy. The Trans-Pacific
Partnership would oblige nations to alter their domestic policy to
comply with twenty-six proposed chapters of legislation, including
financial, health-care, telecommunications, food and product standards,
land use and natural resources, government procurement, and more.

Undoubtedly, the Trans-Pacific Partnership is a document is constructed
to serve private, not public interests, by exempting private
corporations from any form of public accountability. The analysis
provided in this article is based on two leaked chapters of the proposed
agreement (which may or may not be subject to amendments prior to the
conclusion of negotiations); the other twenty-four chapters have not
been released for public scrutiny, or even to policymakers in those
participating countries. Other than the national delegation for each
participating country, the only people who have been allowed to see the
actual text of the proposed agreement are members of various Trade
Advisory Committees and top corporate executives, with no
representatives from academia or civil society. The blanketing secrecy
over the entire negotiation process is nothing short of alarming, with
legislation in place to keep text proposals from being publically
released until four years after the close of negotiations. [9] The next round of TPP negotiations is set to take place in Leesburg, Virginia in early September. [10] Prime Minister Najib Razak has said Malaysia is committed to being a member of the Trans-Pacific Partnership:

hope sometimes in the near future we will be able to conclude TPP. It
is important for the US to have free trade with ASEAN. ASEAN is a US$2
trillion (RM6.30 trillion) market of 600 million people and there is not
another trade bloc with momentum like it in the world.”

the TPP can be seen as an attempt by the United States to build a
coalition in which its corporate interests dominate the ASEAN region to
counter China’s increasing economic prowess. Leaders and citizens alike
must reexamine their stance on this issue and consider the enormous
negative ramifications it would hold for consumers and domestic
industry. Previous attempts to negotiate a US-Malaysia bilateral free
trade agreement in 2006 – 2010 have failed; one would hope that attempts
to implement a Trans-Pacific Partnership suffer a similar fate.

Originally published by the Asia Times Online

Nile Bowie
is a Kuala Lumpur-based American writer and photographer for the Centre
for Research on Globalization based in Montreal, Canada. He explores
issues of terrorism, economics and geopolitics.