International Trade and Industry Minister Mustapa Mohamed said Malaysia will not be comfortable if the US Congress is allowed to scrutinise concessions obtained by the country in the Trans Pacific Partnership Agreement (TPPA) which includes the bumiputera policy.

 

He said this will be the case if US President Barack Obama fails to obtain Trade Promotion Authority (TPA), often referred as a "fast track", which allows the president to negotiate agreements without the US Congress being able to make changes to it.

 

Mustapa said at the negotiators' level, Malaysia has been able to obtain some level of concession to exempt the bumiputera policy from the TPPA but the US Congress may not share the same sentiment if it is allowed to intervene.

 

"For example, our colleagues (negotiators) recognise that the bumiputera agenda is important to Malaysia, it is in our constitution and we are pleased that they know and recognise this as an important part of Malaysian policy.

 

"In the event the US administration does not get TPA, the bumi policy will be scrutinised by the US Congress and we will be very uncomfortable to go through that process," he told a press conference after a town hall meeting on TPPA in Kuala Lumpur today.

 

He added that other members in the TPPA negotiation have likewise expressed that they would be "uncomfortable" if their agreements were to be scrutinised by the US Congress.

 

"One, it will delay the process and secondly, it will undo whatever agreements we have negotiated among the 12 countries," he said.

 

Mustapa said this was "in a way untenable" but did not want to speculate if it would mean the demise of the TPPA, merely stating that it would be "difficult".

 

However, the minister said signals coming from US officials indicate Obama ( right ) is confident he will be able to obtain the fast track.

 

"From what we hear, the US is quite confident about getting the TPA. This is coming from the US, so we must give some weightage to that piece of information," he said.

Earlier during the town hall meeting, Mustapa said negotiators were prepared to look into concessions in the bumiputera policy, which is meant to address marginalisation in the majority community.

However, he said negotiators have asked Malaysia to be more specific in what it wants to be carved out of the TPPA and this was still a work in progress.

‘Not signing TPPA has its price, too’

He added that Malaysia has also been able to obtain exemption from the TPPA on certain aspects of public heath and small and medium enterprises.

However, he said the country was isolated on trying to obtain concessions on issues relating to labour and procurement.

“Other countries are done on these agreements, we are the only one still having issues,” he said.

For procurement, Mustapa said negotiators took issue that only the federal government’s procurement will be opened and will not include statutory and state bodies.

And on labour, he said Malaysia is negotiating on having to agree to the International Labour Organisation (ILO) declaration on fundamental principles which relates to the right to form unions, hold strikes and forced labour.

However, he said other countries are on board with Malaysia in obtaining concessions on issues such as patent and pharmaceutical intellectual rights.

Mustapa repeated emphasised to the audience of some 600 people to weigh the costs and benefits of the TPPA and not to only look the the former.

He added that if countries like Vietnam and Singapore sign onto the TPPA but Malaysia does not, it will lose out to those countries as they would enjoy trade benefits over Malaysia.

“For example, in some countries, almost 60 percent of all our products that we import we must pay an import duty of one to five percent.

“With the TPPA, when we go to Australia, about 96.5 percent of our products will enjoy duty-free access in the Australian market,” he said.

He also warned that without these benefits, existing foreign investors may opt to shift their operations to countries with TPPA benefit, resulting in job losses in Malaysia.

To a question, Mustapa said Malaysia can still walk away from the TPPA after it is signed if the costs were to outstrip the benefits, but noted that there would be political consequences such as foreign relations fallout.

Mustapa said a cost-benefit analysis of the TPPA is under way and targets to have it presented to Parliament by July, together with the TPPA draft which is presently kept secret.

He said the town hall session today is part of an ongoing engagement process, conceding that Putrajaya had not been transparent in the initial stages of the TPPA negotiations.