TPPA - Are we going to sign?

Saleh Mohammed | .

The Office of the US Trade Representative in its website have the following statements:

1. President Obama’s trade agenda is dedicated to expanding economic opportunity for American workers, farmers, ranchers, and businesses. That’s why we are negotiating the Trans-Pacific Partnership (TPP), a 21st century trade agreement that will boost U.S. economic growth, support American jobs, and grow Made-in-America exports to some of the most dynamic and fastest growing countries in the world.

2. President Obama announced in November 2009 the US’ intention to participate in the TPP negotiations to conclude an ambitious, 21st-century Asia-Pacific trade agreement that reflects U.S. priorities and values. Through this agreement, we are seeking to support the creation and retention of high-quality jobs at home by increasing American exports to a region that includes some of the world’s most robust economies and that represents more than 40 percent of global trade. To ensure that we craft an agreement that addresses the issues that American businesses and workers are facing today, the Obama Administration has been working in partnership with Congress and consulting closely with stakeholders around the country throughout the process.

3. The TPP will grow trade with one of the world’s fastest growing regions, and share American values and commitment to improve labor practices and elevate environmental standards around the world.

The TPP will help American small businesses benefit from trade and also solidifying Washington’s leadership in the global economy.

The proposed agreement began in 2005 as the Trans-Pacific Strategic Partnership Agreement (TPSEP or P4). Participating countries set the goal of wrapping up negotiations in 2012, but contentious issues such as agriculture, intellectual property, and services and investments have caused negotiations to continue.

Comments by Economists and US Senator

In 2013, Joseph Stiglitz, a Keynesian economist, warned that the TPP presented "grave risks" and "serves the interests of the wealthiest." Organized labour in the US argued that the trade deal would largely benefit corporations at the expense of workers in the manufacturing and service industries.

In 2014, Noam Chomsky warned that the TPP is "designed to carry forward the neoliberal project to maximize profit and domination, and to set the working people in the world in competition with one another so as to lower wages to increase insecurity." Economist Paul Krugman reported, "... I'll be undismayed and even a bit relieved if the TPP. just fades away," and said that "... there isn't a compelling case for this deal, from either a global or a national point of view." Economist Robert Reich contends that the TPP is a "Trojan horse in a global race to the bottom, giving big corporations and Wall Street banks a way to eliminate any and all laws and regulations that get in the way of their profits."

In a letter to Michael Froman, a US Trade Representative, Senator Bernie Sanders wrote - "It is incomprehensible to me that the leaders of major corporate interests who stand to gain enormous financial benefits from this agreement are actively involved in the writing of the TPP while, at the same time, the elected officials of this country, representing the American people, have little or no knowledge as to what is in it."

What they say in New Zealand

TPPA will undermine NZ state-owned enterprises

EU releases text in US negotiations - NZ must do the same. Trade minister Tim Groser's lie that governments can't release texts of agreements under negotiation has been proved wrong - on 7 January 2014 the EU released a raft of documents it has tabled in the Transatlantic Trade and Investment Partnership (TTIP) with the US and NZ can and must do the same.

Other Critics

Some global health professionals, internet freedom activists, environmentalists, organised labour, advocacy groups, and elected officials have criticised and protested the negotiations, in large part because of the proceedings' secrecy, the agreement's expansive scope, and controversial clauses in drafts leaked to the public.. Wikileaks has published several documents since 2013.

Why so clandestine?

Nevertheless, what is known from the leaks has left a whole range of politicians, academics and civil society groups deeply worried.


It’s called the TPPA - or Trans-Pacific Partnership Agreement but in reality it’s more like a wish-list for big corporations. It is so shrouded in secrecy the public and most of our politicians, don't seem to know the finer details.

It would set the rules of commerce for roughly 40 percent of the world's economy.

Although it is called a "free trade" agreement, it is not mainly about trade. Of it's 29 draft chapters, only five deal with traditional trade issues. One chapter would provide incentives to offshore jobs to low-wage countries. Many would impose limits on government policies that we rely on in our daily lives for safe food, a clean environment, etc. Our national policies would need to comply with its rules.

It is designed to elevate foreign firms to equal status with sovereign nations, empowering them to privately enforce new rights and privileges. Firms would allegedly be allowed to sue the countries they are operating in via private courts, steering clear of national jurisdictions. It will drag governments to foreign tribunals to challenge public interest policies that they claim frustrate their expectations. The tribunals would then be authorized to order taxpayer compensation to the foreign firms for the "expected future profits" they surmise would be inhibited by the challenged policies.

In the US, some 700 official corporate "trade advisors" (most of them corporate lobbyists) have special access and can make suggestions. It has been under negotiation for about a decade and the Obama administration wants to sign the deal this year.

The TPPA has strategic policy implications for the US but the substance of the proposed agreement and its future remain undecided. The agreement is ambitious in at least three ways:

(1) in terms of its size—it would be the largest US FTA;

(2) the scope and scale of its liberalization — to comprehensively reduce barriers in goods, services, and agricultural trade as well as rules and disciplines on a wide range of topics including new policy issues that neither the WTO nor existing FTAs yet cover; and

(3) its flexibility—this “living agreement” has been and may continue to be expanded in terms of its membership and its trade and investment disciplines.

God knows to what extent this 'living agreement' will evolve into.

Recently, Datuk Seri Mustapa Mohamed said "the TPPA would scrap tariffs on goods ranging from electrical goods to palm oil and open up new markets with countries not subject to existing bilateral trade deals, such as the US, Canada, Mexico and Peru. Malaysia is seeking flexibilities for our State-Owned-Enterprises to enable them to continue with their developmental roles. On government procurement, Malaysia is safeguarding (Bumiputera) preferences by ensuring that the current SME preferences will be maintained. Failing to join would come at a cost of potentially losing foreign investment to other countries and late entry would not give Malaysia the same ability to shape the rules. We will also lose out to our competitors, who will be part of the (TPP) and enjoy preferential access to the TPP markets".

As can be seen above, the main beneficiary is the US,boosting US economic growth, support American jobs, grow Made-in-America exports, creation and retention of high-quality jobs at home by increasing American exports and addressing the issues that American businesses and workers are facing currently.

Another point to note is the cost-benefit analysis (CBA) study on the TPPA is long overdue. The interim report was done by the Unit Peneraju Agenda Bumiputera (Teraju) and Institute of Strategic and International Studies (Isis). PricewaterhouseCoopers (PwC) undertook the report on behalf of Teraju.

In June, it was reported will be ready by end July and I think it is still outstanding.

Hopefully, our minister knows what he is doing for the benefit of our beloved country with such widespread criticisms.

Many hoped that Malaysia will not sign it and if walk away, we would not lose everything - the experience gained in the negotiations is priceless...

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