THE Government has been urged to withdraw from the comprehensive and progressive agreement for trans-pacific partnership (CPTPP) as it would have grave consequences on Malaysia’s business and economy, said Muslim Consumer Association (PPIM) chairman Datuk Nadzim Johan.
Nadzim told FocusM that CPTPP would only benefit big businesses and multinationals and would leave local businesses in dire straits.
“How would our local businesses compete with big businesses that would have economies of scale and greater efficiencies that would result in more unemployment and strain our balance of payments due to increased imports,” he said.
Nadzim said that Malaysia already had trade agreements (FTAs) with many countries and would not lose out on staying out of the CPTPP.
Malaysia already has FTAs with Singapore, Japan, and Australia. The three countries account for about 82% of Malaysia’s exports and 84% of imports among countries under the CPTPP.
The CPTPP is a free trade agreement among Malaysia, Australia, Brunei, Canada, Chile, Japan, Mexico, Peru, New Zealand, Singapore, and Vietnam.
The agreement came into force for Australia, Canada, Japan, Mexico, New Zealand, and Singapore in December 2018, Vietnam in January 2019, Peru in September 2021, and Malaysia on Nov 29. Brunei and Chile are now the only countries that have yet to complete their ratification processes.
On some of the contentious chapters of the CPTPP, Nadzim added that the agreement would also put Malaysia at risk of legal suits by foreign investors as it contains provisions for investor-state dispute settlements, where foreign investors could sue the government for actions related to foreign direct investment (FDI).
“The investor-state dispute settlement (ISDS) provisions allow foreign companies to sue host country governments for loss of profits, including future profits due to policy changes that promote national interest.”
An economist in policy research said that there are four outstanding issues on the CPTPP notably intellectual property rights, ISDS, labour, and government procurement.
He also pointed that IPR issues could impact the cost of health as many countries, especially developing countries will be at a disadvantage.
On government procurement, he said that our procurement market will be open to the developed countries, whereas we will not have access to the markets in the developed countries.
He said that the prime minister understands the shortcomings of getting into the CPTPP as he has expressed his concern previously and therefore should be doing the right thing.
Article by: Focus Malaysia
PPIM: WITHDRAW FROM CPTPP TO AVERT GRAVE CONSEQUENCES