Press release, 14 August 2014
The Consumers Association of Penang (CAP) is deeply concerned by the shocking process by which the United States of America (USA) squeezes more concessions from other countries it negotiates free trade agreements (FTAs) with, even after the treaty’s text is signed. This was outlined in new research released yesterday at http://tppnocertification.org/. This process of one-sided extraction of concessions is called ‘certification’ and the USA is demanding it be part of the Trans-Pacific Partnership Agreement (TPPA) currently being negotiated by Malaysia and 11 other countries including the USA.
Under US law, after the TPPA is signed, to start operating, it must pass the US Congress and then US law has required one more step in recent FTAs before it can come into force: the USA must certify that it is satisfied with the implementation of the FTA in the other country.
In practice this has meant that the other partnering country have had to negotiate their domestic laws and regulations that implement their USFTA with the US government. US government emails obtained via Freedom of Information requests show that US government lawyers have drafted the laws of the other country and have not accepted any changes to them.
CAP President Mr. S.M. Mohamed Idris said that “If this is agreed to in the TPPA, this certification process would be a gross violation of our national sovereignty. Agreeing to this would turn our Parliament into a mere rubber stamp for the US government and send us back to being a colony – doing whatever our colonial masters’ order”.
The USA has used this certification process to demand that developing countries pass laws giving the USA even more than the USFTA requires. For example Guatemala was asked to give an extra three year monopoly on medicines, keeping them unaffordable for longer, even though this was clearly not required by the USFTA.
“This is another example of the USA’s outrageous demands both on substance and process in the TPPA. It is a shameless US attempt to force through what they couldn’t get in negotiations of the TPPA text. If Malaysia agrees to allow the USA to apply this certification process to the TPPA, it would formalise and entrench the unequal bargaining power in the TPPA’, said Mr. S.M. Mohamed Idris.
The new research also points out that it is not only the US trade negotiators and Congress who make these extra demands during certification, but even US companies. One US oil company was able to get its complaint turned into an official certification requirement for the Dominican Republic for its USFTA.
US government reports on the website indicate the likely areas where the US will target Malaysia in the TPPA negotiations and/or certification process which include US complaints about Malaysia’s halal requirements, level of intellectual property protection, financial regulation, requirements for Malaysian content on television and radio, restrictions on foreign ownership of land and in the oil and gas sectors, requirements for labelling of genetically modified food and restrictions on genetically engineered products.
The analysis notes that because certification would apply between the USA and other TPPA countries, the USA could prevent the TPPA from entering into force between the USA and that specific country. And so that TPPA country, for example Malaysia, would be prevented from enjoying the main touted benefit of the TPPA – slightly lower tariffs for its exports into the USA, until it has forced Malaysia to agree to all the extra concessions the USA wants. But in the meantime, Malaysia would have to implement all the very problematic general rules of the TPPA including stronger intellectual property protection, many of which benefit the USA, as soon as Malaysia brings the TPPA into force with any other TPPA country, e.g. from ASEAN.
According to Mr S.M. Mohamed Idris, “Agreeing to this certification process would mean that Malaysia suffers the heavy costs of the TPPA, while waiting (perhaps forever) for the minor benefits. This must be factored into any cost-benefit analysis done by the Malaysian Government”.
Hence, Malaysia must insist that there is no certification requirement in the TPPA. This should be a red line which cannot be compromised. CAP is calling for this to be a red line because the Malaysian government is still negotiating the TPPA and the next round of negotiations is reported to be from 1-10 September 2014 in Vietnam.
This new research strengthens our conviction that Malaysia should withdraw from the TPPA negotiations and not sign it.