TWN Info Service on Free Trade Agreements

11 September 2006


From: http://www.malaysiakini.com/opinionsfeatures/56493

FTA talks: Adopt pragmatic approach
Imran Imtiaz Shah Yacob
Sep 8, 06 1:01pm

United States is fighting battles on all fronts these days. The war on terror, the Israeli invasion of Lebanon and the recent visit by Dr Condoleeza Rice are fresh in the minds of Malaysians.

The other battle however is being fought on home ground and scrutinized by the public. It is the ongoing bilateral free trade agreement negotiations that are being waged by Washington. Armed with the Trade Promotion Authority Act that expires on July 1, 2007, we are now besieged by experienced and skilled warrior negotiators from the US as
they begin their task of cementing 'An FTA For The Future' as stated by Ambassador Christopher J LaFleur.

The rakyat determines the nation's future. What are the potential losses and gains as well as the concessions that have to be made? Civil society groups and NGOs are taking up the issue in coordinated demonstrations and appeals to the leadership about the dearth of data and details about the effects of the FTA. The detractors of the FTA struggle against what they say are the unfair terms resulting in adverse effects on the population and ultimately the domination of the US over Malaysia.

Chanting "Don't trade away our lives' echoes the seriousness of the matter.

The collapse of the Doha talks in which developing and poorer countries fought tooth and nail against a perceived unfairness and domination by developed and rich countries signals the new era for the FTA. So what was not gained by the developed and rich through multilateral talks at the WTO is what is now on the menu of the FTA. Ironically, the developing and poorer countries are also at the table.

"History despite its wrenching pain, cannot be unlived, but if faced with courage, need not be lived again" (Maya Angelou).

History reminds us of the dawning of the British Empire, first by means of trade in the Malay Peninsula around the mid-18th century steered by Sir Francis Light culminating in the raising of the Union Jack in Penang for the first time not long after.

New York Times columnist, Thomas Friedman wrote "The hidden hand of the market will never work without a hidden fist….." (The Lexus and the Olive Tree). Neoconservative militarism and corporate globalisation are but new terms which are rooted in our antiquated struggle for independence and freedom. Friedman goes on to say that "McDonalds cannot flourish without McDonald Douglas, the designer of the US air force F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies to flourish is called the US Army, Air force, Navy and Marine Corp". And so history repeats itself.

Heavy price

The developing and poorer countries have paid a heavy price in their learning curve. The North American Free Trade Agreement (Nafta) which took effect on Jan 1, 1994 is a case in point. Nafta also dubbed (a death sentence) for Mexico's Campesinos and Indigenous peoples had served as the fan that stoked the flame of the Zapatista uprising. Recently, parliamentarians from Canada, Mexico and the US described Nafta as a "continental tragedy".

They in turn have sworn to introduce legislation in their respective constituencies to try and dismantle the agreement "brick by brick" (CanWest, Winnipeg, Tuesday, June 6, 2006).

Even Australia, an ally on the war on terror has seen US exports shoot up and Australian exports to the US scale down drastically in just one year of the FTA. The Australians are now hoping that the Americans would act on proposed changes to the FTA in its first formal review (Australian Financial Review, March 8, 2006). Thailand has been
negotiating with the US on an FTA for two years. Our neighbor has postponed the negotiations in the face of fierce protests by a broad civil society coalition under the banner "sovereignty not for sale!" and the ensuing political uncertainty there.

Now it’s our turn to face up to the challenges of that very catchy term globalisation and free trade as well as its cause and effects that shape the new world order. First of all, we are still for all intents and purposes, in negotiations. We are only at the third round of
deliberations to be held next month as part of a five-round discussion. In principle, we should explore the potential of the FTA with the US. The fact that other countries have signed a US- FTA may be to our disadvantage in the long run.

We must manage globalisation effectively and seize every opportunity. The US investments in Malaysia account for approximately US$20 billion over in 2005 with two-way trade standing at US$44.2 billion with Malaysia enjoying US$23.2 billion surplus.

Our negotiators must reiterate and stand firm on the concept of 'progressive liberalisation' as opposed to 'meaningful liberalisation'. We must maintain the negotiation standard of 'positive list' whereby only those sectors listed in the agreement will be liberalised as
opposed to the 'negative list' whereby all sectors and services will be liberalised except for those explicitly stated in the agreement.

The US will find it counter productive to adopt a take it or leave it approach on the FTA package as a whole. As certain segments of the private sector have come out in support of the FTA, there is growing dissent against it. Putting pressure on the Malaysian negotiators at the onset further complicates the matter with an adverse impact in the
political realm.

In conclusion, we cannot rely on protectionist policies in perpetuity. They were never meant to be that way. The future is now. Instead of pointing the finger of blame away from ourselves, we should look to compete on the global open market. On a level playing field we must take our positions in the game.