Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
<B><FONT COLOR="#2f4f4f">Malaysiakini: What is the
FTA about? What issues should our government keep in mind in negotiations with
the US?</FONT></B>
<P><FONT COLOR="#2f4f4f"><B>Charles Santiago:</B></FONT>
A FTA is a preferential trade agreement between countries to enable market access
and trade privileges. The first thing to note about US FTAs is they are not about
promoting trade, but about controlling trade. These are two conceptually different
ideas.</P><P>Why are the Europeans, Japanese and Americans interested? It’s because
talks on the Doha Development Agenda broke down last year. Of course, there is
some attempt to restart the discussions, but I think the Americans feel that it
has gone on for too long. Developed countries are going one-on-one with developing
countries to get bilateral agreements – it’s a far easier way of ensuring that
their dictates are followed.</P><P>The US tells Malaysia that if we don’t sign,
we will lose out on foreign direct investments (FDI), that Malaysia is no longer
investor-friendly, and that the FTA is crucial to regaining confidence.</P><P><FONT COLOR="#2f4f4f"><B>Countries
like Singapore have already signed on. If we don’t do this with the US, will we
lose out?</B></FONT></P><P>That is the government’s argument, but let’s take
it further. In 1990, a report by the United Nations Centre for Trade and Development
said Malaysia was the 4th most attractive country for FDI – today, it is ranked
62. You have to bend over backwards to bring investors back. US investors, in
particular, are saying that the FTA is a pre-requirement. Given their substantial
investment, Malaysia’s hands are tied. Premier Abdullah Ahmad Badawi will argue
that if we do not sign up, we will lose investments and jobs.</P><P>The government
feels that Malaysia would lose its competitive edge if it does not follow Singapore
and other Asean countries in signing FTAs with the US, and that it would be left
behind in terms of leveraging the US market.</P><P>But is it true that the FTA
will promote trade? Consider that 43.9 percent of our manufactured exports are
to the US – electrical goods, machineries, and audio and television products –
and that we import 57.3 percent of identical items from the US. It’s mainly intra-
and inter-company trade, a point made in the 2005 UN ‘World Investment Report’.</P><P>An
interesting note is that companies from countries that do not have FTAs with the
US are doing better. Singapore’s trade deficit with the US increased by 200 percent
in the first year of the FTA signed in 2004.</P><P>But the point is this: trade
is already taking place. We are exporting producer items to the US, there are
value-added processes taking place there, and we have got this wonderful label
that says ‘Made in the US’ or ‘Made in Malaysia’. Why do you need a FTA?</P><P>This
is not about trade, but about ensuring that investors’ rights are protected and
that they have legal recourse to take the government to court for compensation.
There will be no arbitrary change of policies in those areas – that would constitute
a safe haven for investors.</P><P>Ten years ago, we offered cheap labour, political
stability. But now that is not enough. Now they want the government to sign over
its rights and so they can say, ‘We have control over your policies’. Now they
want the government to be subordinate to them.</P><P>In the FTAs, developed countries
are trying to bring back competition policy and investment, government procurement
and trade facilitation – issues (thrown out by the WTO in) 1996 (on grounds that
these could stifle) the developing countries’ policy space.</P><P>Competition
policy and investment, for example, tells you that you have to treat a foreign
company on equal or no less favourable terms as a local company. Can you imagine
General Motors or General Electric being given the same support as Proton?</P><P>It’s
like giving foreign nationals the same rights as citizens. The government will
scoff at the idea, but it will become a reality if the FTA is put in place. They
would not do it for migrant workers from Indonesia, for example, but they would
do it for foreign companies that bring in the money.</P><P>In terms of intellectual
property rights, those with patents will control products and processes. FTAs
are seeking to extend the 20-year period accorded to countries in the Doha Round.
The UN Human Development Report 2000 revealed that advanced countries such as
the US hold 97 percent of all patents, and multi-national companies (MNCs) hold
90 percent of all technology and product patents.</P><P><B><FONT COLOR="#2f4f4f">On
that note, how would the FTA lead to higher cost of medicines?</FONT></B></P><P>Once
it signs up, Malaysia will retrospectively change its laws to accommodate the
terms of the FTA. One of the things the US will push for is extension of the minimum
patent protection period. It may move towards 25 or 30 years. It will restrain
local generic production, which means local producers of (cheaper) medicine will
be affected.</P><P>The US only promotes competition in sectors and markets where
its MNCs want to increase investment opportunities. They are now ensuring through
FTAs that economic partners face higher and more stringent requirements on intellectual
property rights.</P><P>We will have to reduce tariffs, remove non-tariff barriers
and technical barriers to trade, as well as harmonise standards, procedures, and
regulations between trading partners. For example, Malaysian standards and customs,
licensing, and import-export procedures will have to follow American or European
standards.</P><P><B><FONT COLOR="#2f4f4f">So what can developing countries do
about this?</FONT></B></P><P>The discourse has changed to where the market and
MNCs will reign supreme. That is what happened in Thailand with the attack on
the baht and reversal of capital controls imposition.</P><P>We are at the mercy
of the markets, and governments are now pandering to investors. In the case of
Thailand, it was Japanese and American money – to whom are these people accountable?
Nobody. They’re only accountable to their own profits and loss accounts. They
can ravage economies, they can destroy millions of jobs, which they have done.</P><P>We
have not reined them in, and this is what we have to do. That’s exactly what we
see in the FTAs, where governments’ hands are increasingly being tied – today,
finance rules. This is the context in which we should see FTAs.</P><P>The US is
also really interested in the financial sector, in banks, telecommunications,
government-linked companies (GLCs). On this point, we know that in the case of
Malaysia, GLCs have a socio-economic role to play, but now, the US is saying,
‘No, take it out, this is entirely on a commercial basis’. This has happened with
GLCs in Singapore.</P><P><FONT COLOR="#2f4f4f"><B>In Thailand and other countries,
there have been huge protests against the FTA. Why don’t we see similar outrage
here?</B></FONT></P><P>Malaysians generally are the least politically aware people
in the region. But I also know that a lot of non-Malays actually welcome the FTA,
especially the non-Malay business community. They feel this is the only way to
get the government to stop supporting its pro-bumiputera policy and the National
Economic Policy. They can’t do it through the ballot box and the democratic process.
So if the Americans can do Malaysians a favour, hey, why not – this is their approach.</P><P>I’ve
talked to some Chinese Malaysian businessmen and business groups. After discussing
the problems they face with the government, the bottom line is: ‘We want
the government to stop helping the Malays’. 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.</P><P>As a grocer, for example, your customers will no longer come
to you (but will go to foreign-owned hypermarkets). You either close shop or you
agree. So the issue is not whether you are Malay, Chinese, Indian or Kadazan…Malaysians
are going to be unemployed and they are going to be in trouble. It’s going to
hit everybody.</P><P>The market is shrinking. The number of people in the market
place are no longer following the competitive process where there are thousands
of suppliers influencing prices, and so on.</P><P>The Chinese community and non-Malays
generally support the FTA and think that it’s time to rein in the government and
Malays, but in the long run it’s going to hurt all Malaysians. The single marker,
rightly or wrongly, is to discipline the government in the way that it supports
the Malays.</P><P>I think it’s very sad…(to think that) somebody else is the
problem. After 50 years, we have to wonder whether we are a nation or not. It
has come to such a point where it has become difficult to organise around the
FTA which is clearly is of concern (to all).</P><P>It’s also the government’s
failure not to have developed genuine bumiputera companies. We should stop supporting
the big conglomerates and focus on Malay small and medium industries, which really
need support. I think that’s where the focus of investments and funding should
go. It’s (this sector which is) trying to eke out an existence but is unable to
fight in the market place.</P><P>If you want to be competitive, you have to put
your money into the development of new products and processes, and in the education
system. Not the one we have right now, which is horrible, but a 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.</P><P>We have screwed things up royally. If we
want to be competitive, we have to be serious and look at the areas of competition
which we should improve. We need to re-examine ourselves and the way we run the
economy.</P><P><B><FONT COLOR="#2f4f4f">Given the concerns, wouldn’t the government
have consulted civil society and private bodies? The international trade and industry
ministry (Miti) said in a statement to the People’s Anti US-Malaysia FTA Coalition
that it had conducted a cost-benefits analysis and the necessary consultations.</FONT></B></P><P>If
they have done a cost-benefit analysis, they should make it available for public
scrutiny and for public discussion so that others can also comment on this. Miti
called us for discussions a week before the first round of FTA discussions with
the US. We questioned why they left it so late.</P><P>The Trade Investment Framework
Agreement (Tifa) is actually a preparatory process you conduct before you go into
FTA negotiations. It’s where you sit and brainstorm whether you want to go into
an agreement or not, and what should go into an agreement. From the American point
of view, therefore, there is an implicit understanding that Malaysia is entering
into formal negotiations.</P><P>It’s also the degree and quality of consultation
that took place. There must be an open consultation involving seminars, discussions,
exchange of views, work by local as well as foreign experts in the area…</P><P><B><FONT COLOR="#2f4f4f">So
before Malaysia conducted a proper Tifa process, it painted itself into a corner
by going straight into negotiations?</FONT></B></P><P>After Tifa, they could have
still said it’s too much for Malaysia and that citizens will cry foul. But,
the government is now in a corner.</P><P>The process is already showing that it’s
a race to the bottom for workers. Last week, Human Resources Minister Fong Chan
Onn said we have to change our laws so that companies can hire and fire workers
more easily because this is what investors want.</P><P>(On Dec 21, the New Straits
Times reported that the ministry is considering the proposal submitted by employers.
A committee is to be set up to look into this and related issues, including a
safety net for workers.)</P><P><I>Source: http://www.malaysiakini.com/news/61787</I>
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