Malaysians protest against free trade talks with US

Penang, 12 June (Chee Yoke Heong) -- As Malaysia and the United States began their first round of talks on a bilateral free trade agreement (FTA), they were confronted by a group of Malaysian protesters concerned that the agreement will cause the country more harm than good.

About 200 people, many of whom are part of the 'Coalition on Malaysia-US FTA', a broad-based grouping of Malaysians which include people living with HIV/AIDS, consumers, workers, farmers, health activists and human rights groups, staged a peaceful demonstration outside the venue of the talks here this morning.

The protestors held banners and chanted slogans such as 'Stop US FTA', 'Don't trade away our lives' as the US and Malaysian officials started their negotiations which will last from 12 to 16 June.

A memorandum by the public organizations was handed to a representative of the negotiators' organizing committee by S. M. Mohammad Idris, President of the Consumers' Association of Penang (CAP), one of the groups leading the protest. Attempts to meet with a member of the Malaysian negotiating team were unsuccessful.

Speaking to a large gathering of reporters, Idris said the talks with the US have to stop as an FTA with the US is against the interests of Malaysia and its people, not only for this generation but also future generations.

"I hope being a democratically elected government, it will listen to the people and withdraw from the talks," urged the CAP President, adding that many other countries have done so and Malaysia should follow suit.

The coalition includes CAP, the Malaysian Trade Union Congress, Islamic Youth Movement Malaysia (ABIM), Positive Malaysian Treatment Access and Advocacy Group, Friends of the Earth Malaysia, Penang Inshore Fishermen's Welfare Association, Rural Citizens of Kedah, and the Third World Network.

The Penang meeting is expected to set a fast and furious pace as the US aims to complete the deal by the end of the year, to take advantage of the US President's "fast track authority" that ends in mid-2007.

When the two countries announced their intention to start negotiating a bilateral FTA on 8 March, the Malaysian Minister of International Trade and Industry Rafidah Aziz said that there was no opposition at home. But today's demonstration and the voices of concern from various segments of society in the past months have shown otherwise.

Questions about the wisdom of Malaysia entering a FTA with the US have also been raised not only by the NGO coalition but also by a wide range of prominent individuals including the former Prime Minister Mahathir Mohamed and in Parliament by the leader of the Opposition Lim Kit Siang.

In its memorandum, the NGO Coalition said the scope of the negotiations covers a wide range of sectors of tremendous importance to Malaysian citizens which can have very significant and profound impacts on jobs and food security, access to affordable medicines including threat to national sovereignty.

The NGOs are concerned that no detailed assessment of costs and benefits of the FTA to Malaysia was made prior to the start of the talks. They called for a comprehensive Cost-Benefit assessment which is made public and transparent as in the case of Environmental Impact Assessments, and most recently the launch of Social Impact Assessments.

The benefits and costs can be assessed in terms of gains and losses in trade terms, impact on jobs, the effects on policy space and flexibilities available to the country as a result of the FTA, as well as the social and environmental effects such as on access to affordable medicines, to knowledge and food security.

Rafidah said she has done the "arithmetic" and concluded that a deal would be in the broad national interest, but she failed to provide details of her calculations. While US trade groups have commissioned cost-benefit studies of a deal, so far, there has been no independent assessment conducted in Malaysia of the likely economic impacts.

"How can such negotiations take place when we are not even clear yet as to what we will gain and what we are prepared to trade-off? Who among Malaysians will gain and who will bear the loss?" the Coalition statement says.

The civil-society movement is particularly concerned that decisions on such important matters are being made in the absence of any consultations with the general public and without parliamentary oversight. Opposition leader Lim Kit Siang has likewise protested about the lack of transparency surrounding the FTA process. "To march into full negotiations with the US without such a [cost-benefit] assessment is akin to flying blind, and is an irresponsible step," warned Lim.

Such complaints are notably similar to those being lodged against the government of Thailand, where negotiations toward an FTA with the US have been shrouded in secrecy and undertaken without parliamentary oversight. The recent popular protest movement that dislodged Prime Minister Thaksin Shinawatra from power had among other issues complained against the US-Thailand FTA, which if completed, opponents contended, would undermine national sovereignty and disproportionately benefit politically connected big businesses.

As a result of the growing protest from various groups in Malaysia, and numerous memoranda and letters sent to the government, some NGOs have been invited by certain Ministries to meetings in the last few weeks. However, the Coalition says those meetings only "reaffirm our fears that the Government is ill-prepared for the type of intensive and aggressive negotiations typical of the US trade interests. They confirm the need for full public consultation."

With this latest protest, the Malaysians have joined many others in Latin America and Thailand where there are concerted efforts to oppose the FTAs that their countries are involved in with the US.

In the last round of talks in the Thai-US FTA earlier this year, the protest from the public was so strong that the chief negotiator resigned and the talks had to be postponed until after the Thai general elections in April.

The protests were directed against US demands on patents which they fear would put an end to affordable medicines. The Thai government negotiators, however, rejected the US demands on intellectual property, saying that the US conditions put Thailand and Thai drug users in a disadvantaged position.

Another public concern raised by the protestors is the FTA's potential effect on farmers, since agricultural liberalisation under other Thai FTAs has hit some farm sectors, as they have to compete against cheap imports which threaten their livelihoods.

In Latin America, FTAs were so controversial that some countries postponed the signing of FTAs until after the elections because the FTAs with the US were seen as so protracted that the governments worry that they may lose election votes should they go ahead.

Others such as Argentina, Bolivia, Brazil and Venezuela have outright rejected entering into an FTA with the US.

There is much to be wary about entering into negotiations with the US. Some analysts believe FTAs undermine the greater potential economic benefits pursued under the World Trade Organization's multilateral approach. Unlike previous US-brokered bilateral trade pacts, which targeted specific goods or projects, the present generation is more comprehensive, covering investment, services and tougher intellectual-property protections. They are also more restrictive: governments can be sued or face trade sanctions in cases where US companies feel they have been treated unfairly.

The US position at FTA negotiations surrounding intellectual-property issues controversially includes the suspension of so-called compulsory licensing agreements, which under the WTO allow countries to produce generic drugs during times of national emergencies. Similar agreements have been signed with Australia, Chile, Morocco, Singapore, Bahrain and Central American countries, and all contain provisions that oblige these countries to tighten their legislation on intellectual-property rights well beyond internationally agreed standards.

One particular area of concern in Malaysia and Thailand regards future access to life-saving anti-retroviral treatments for people with the human immunodeficiency virus (HIV), which can cause AIDS. A group of Malaysians living with HIV under the banner "Positive Malaysian Treatment Access and Advocacy Group" (MTAAG +) has written to Prime Minister Abdullah Badawi expressing its concern that generic medicines will be banned and US-patented treatments rendered unaffordable under the tougher intellectual-property provisions in a US-Malaysia FTA.

MTAAG + were well represented here this morning in the hope to bring their message across to the negotiators.

"The FTA is a US agenda and is not good for the citizens of Malaysia as it will threaten lives through among others impact on drugs prices," says Edward Low, the Director of the Group. Like many others who have met with government officials, he has no confidence that the interest of Malaysians are protected in the negotiations and joined the chorus calling for a stop to the talks.

The proposed pact is already making political waves. Former prime minister Mahathir Mohamad has warned that an FTA with the US could harm the economy by undermining the New Economic Policy, which was promulgated in the 1970s to give ethnic Malays and other indigenous groups special privileges to narrow the wealth gap with Chinese-Malaysians. Malay business associations have already called for excluding government procurement from the trade talks, which would go against the "national treatment" provisions that other US bilateral trade deals have entailed.

US companies would likely leverage an FTA to get greater access to Malaysia's financial sector, where ethnic Malays still have tight control over the industry. Similar domestic concerns surround the Proton national automotive project, which has survived over the years behind high protectionist walls that an FTA would aim to dismantle.

According to US Trade Representative Rob Portman, the FTA will provide market-opening opportunities for US companies, particularly in telecommunications, financial services, energy distribution, health care, audiovisual, and other professional services. The US also hopes to expand its agricultural exports to Malaysia beyond the current $400 million level, he said. Malaysia currently imposes a 40% tariff on imported rice, which
aims to discourage imports and enhance food security.

Malaysia currently imports about $3 billion worth of food a year, and its rice farmers would be particularly vulnerable to cheaper US imports, analysts say. They point to the example of the North American Free Trade Agreement (NAFTA), where exports of cheap corn (maize) to Mexico rapidly tripled under market-liberalizing measures and forced nearly 2 million Mexican farmers to abandon their land.

A bilateral deal could seriously erode Malaysia's current trade surplus. According to the Trade Representative's office, Malaysia's tariffs are on average twice as high as US tariffs, a situation that an FTA would aim to rectify. The US-based National Association of Manufacturers estimates that US manufacturing exports to Malaysia could more than double to $22 billion by 2010.

At the WTO, Malaysia has led resistance of developing countries to US-led demands to open government procurement, investment and competition policy, which Malaysia feared would undermine its various national projects aimed at lifting the country to developed-nation status by 2020.

After the failed WTO Cancun Ministerial conference in 2003, the WTO dropped the three issues from the WTO negotiating agenda. Observers are watching whether Malaysia will change its position and give in to the US under the FTA.