MALAYSIA: CAP: By joining TPPA more to lose than gain

Saturday 15 February 2014

Date: 14 February 2014

Type: News

Source:Free Malaysia Today

Keywords: TPPA, protests

GEORGE TOWN: The Consumers Association of Penang (CAP) boycotted the Trans Pacific Partnership Agreement (TPPA) consultation session organised by the Ministry of International Trade and Industry (MITI) in Kuala Lumpur today. The session was arranged as a prelude to the meeting with TPPA negotiating countries ministers to be held in Singapore at the end of this month.

CAP’s boycott of today’s consultation session, which was to get input on the TPPA, was mainly because the Putrajaya administration has yet to address numerous concerns and red lines highlighted by CAP and many others.

“It is a shame because MITI had failed to consider our numerous calls to withdraw from the TPPA,” said CAP president SM Mohamed Idris.

He noted that many organisations in Malaysia and around the world had voiced out against the TPPA, which was being negotiated by 12 countries in the Asia-Pacific region.

The countries are Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, USA and Vietnam and Malaysia.

He said Putrajaya’s assurances that it would not agree to TPPA provisions that are against national interests, were mere words.

“How would we know what is being negotiated on our behalf when the draft text is not revealed?

“Moreover, the purported benefits of the TPPA are still unsubstantiated,” said Idris in an email to FMT today.

CAP’s latest analysis shows that the TPPA costs will far outweigh the benefits and in some cases by over 6.5 times as listed in the goods chapter. Malaysia already has a Free Trade Agreement (FTA) with seven of the participating TPPA countries, except for Canada, Mexico, Peru and the USA, which reduced or removed their tariffs on Malaysian exports even further.

“So why do we even need the TPPA?"

“In view of the issues raised above, we urge the Malaysian government to withdraw from the TPPA negotiations immediately and do not sign on to the TPPA,” insisted Idris.

He pointed out that Malaysia had graduated from the US’s generalised system of preferences in 1995.

He said Malaysian exports currently faced the most-favoured nation (MFN) tariff that other World Trade Organization (WTO) member countries would face when they export to the US.

Malaysia exported more products to the US in 2012 (US$26.7 billion) than the US exported to Malaysia (US$15.9 billion).

While the US imposed tariffs on Malaysian exports for the year 2012 was worth US$207 million, Malaysia’s imposed tariffs on the US was US$720 million, for the same year.

“So if both sides remove all tariffs, except perhaps on one product, in the TPPA, Malaysia would be doing 3.5 times more liberalisation and losing 3.5 times more tariff revenue than the US,” Idris said.

He said this would be the opposite of the special and differential treatment for developing countries agreed to by all WTO members, including the US, where developing countries do less liberalisation than developed countries.

Current US tariffs on Malaysian products is at least 10% while 75% of Malaysian exports to the US face a negligible average applied tariff of 0.2%.

Malaysia’s palm oil exports already enter the US without tariffs.

Idris said that in 2007, Malaysia’s revenue from export duties amounted to RM 2,296 billion and based on past US-FTAs, the TPPA would effectively ban export taxes.

“The Malaysian government will lose US$371 million per year in tariff revenue on the top 18 US exports to Malaysia alone if it removes tariffs on these US exports in the TPPA,” he said.###

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