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The US-Malaysia free trade agreement (FTA) will alter the economic and
political fundamentals in Malaysia beyond the hopes of those seeking the
dismantling of such pro-Malay policies as the National Economic Policy
(NEP), warns an economist.Director of Monitoring Sustainability of Globalisation Charles Santiago said Malaysians should discard the tempting illusion that the FTA will be a saviour of the non-Malay community, as the impact will be felt by all.
The government enters the fourth round of negotiations with the US Trade Representative today. Critics believe that the FTA will result in an increase in drug prices, job losses and the sidelining of local industries, among other problems .
Unlike Thailand, however, which saw angry protests against a proposed FTA with the US, opposition to the US-Malaysia negotiations has been confined to a handful of activist organisations and a sprinkling of members from opposition parties.
Santiago attributed the lack of public interest to the grievances felt by minority communities against the NEP, among other policies weighted in favour of the majority Malays in education and business opportunities.
"They can't (effect change) through the ballot box and democratic process. So if the Americans can do Malaysians a favour, hey, why not - this is their approach," said Santiago in an interview with malaysiakini .
"I think what they're saying is wrong, because even non-Malays are going to get hit badly by the FTA. They don't realise this ... In the long run, it's going to hurt all Malaysians."
Santiago said the FTA with the US is not about promoting trade in goods
and services but is aimed at controlling trade and ensuring US
investors' interests are upheld and protected above even the interests
of the people.Trade between Malaysia and the US has mainly been between firms within the same industries or between companies within the same firm, said Santiago citing the United Nations 'World Investment Report'.
"We exported 43.9 percent of our manufactured products to the US - electrical goods, machineries, and audio and television products - and imported 57.3 percent of similar manufactured products from the US," said Santiago.
"(So) what is the basis of this FTA, when trade is mainly between companies in the same industry or within a company?"
Santiago said governments of developing countries are rushing to attract investments by increasingly compromising on tools that have been used to protect national interests and the interests of citizens.
"Ten years ago, we offered cheap labour and political stability. But now that is not enough. Now (investors) want the government to sign over its rights so that they can say, 'We have control over your policies," he said.
'No accountability'
He reiterated fears that the price of medicines will increase with the extension of patent periods and other restrictions against production of local generic medicine.
Citing Bangkok's roll-back of capital controls after it initially sought to prevent investors from betting on the baht, Santiago said Malaysia's announcement that it would not impose currency controls suggests the power of foreign investors over monetary and fiscal policies.
"In Thailand, it was Japanese and American money to whom are these people accountable? Nobody. They're only accountable to their own profit and loss accounts. They can ravage economies, they can destroy millions of jobs, which they have done," he claimed.
He said the terms of the US-Malaysia FTA would subject the government's 'policy space' to the dictates of foreign investor interests.
Malaysia would also be required to treat US companies on equal or no
less favourable terms as local companies, including government-linked
companies.
"It's like giving foreign nationals the same rights as citizens. The government usually scoffs at the idea, but it will become a reality if a FTA with the US is put in place. The government won't do this for migrant workers from Indonesia (for example), but they would do it for foreign companies that bring in money."
Although foreign direct investments (FDI) have declined, the answer in making Malaysia more attractive lies not in giving away more of the rights and the welfare of the people to investors and multi-national companies, he said.
"If you want to be competitive, you have to put your money in the development of new products and processes and in the education system ... that can produce creative and critical thinking people, support small and medium industries, develop infrastructure that lowers the cost of production and allows for faster movement of goods and services," he added.
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"It's like giving foreign nationals the same rights as citizens. The government usually scoffs at the idea, but it will become a reality if a FTA with the US is put in place. The government won't do this for migrant workers from Indonesia (for example), but they would do it for foreign companies that bring in money."
Although foreign direct investments (FDI) have declined, the answer in making Malaysia more attractive lies not in giving away more of the rights and the welfare of the people to investors and multi-national companies, he said.
"If you want to be competitive, you have to put your money in the development of new products and processes and in the education system ... that can produce creative and critical thinking people, support small and medium industries, develop infrastructure that lowers the cost of production and allows for faster movement of goods and services," he added.
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