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BANTAH TPPA Red Lines – Civil Society Roundtable discussion 26-27 August 2013

3rd September 2013

Below are identified redlines deemed to be non-negotiable positions which Bantah TPPA proposed to be adopted by the Malaysian Government with regards to the TPPA negotiation.

1. Chapter on Trade in Goods

(a) There should not be elimination of tariffs (zero tariff) covering all products (by Malaysia?). There should be exceptions for sensitive products (whereby if there is tariff elimination or steep tariff cuts, the local producers will be adversely affected). Thus there should be exclusion of rice, other food products, tobacco crop, alcohol, automobile sector and other sensitive industrial products where there is local production.

(b) There should not be a ban or restriction on export taxes. Malaysia depends on export taxes to enable local processing and manufacturing of several commodities, including timber, fisheries, palm oil. Export taxes are also a source of government revenue

(c) There should not be a “yarn forward rule” in textiles and clothing (whereby clothing producers in Malaysia have to source their yarn only from TPP countries, thereby raising their cost of production).


2. Chapter on Services.

(a) The services chapter has to include liberalisation on a positive list basis not a negative list basis as being demanded. In the negative list framework, all sectors are assumed liberalised totally unless placed on a “negative list.” The danger includes that all new sectors (not listed) are automatically opened to companies from other TPP countries; and existing sectors that later the country decides it wants to develop domestically, are also opened up already.

(b) There should be no disciplines on domestic regulation. This includes there should be no restrictions on licensing fees.

(c) It should not be more binding on state and local governments than the General Agreement on Trade in Services (GATS) is at the World Trade Organization (WTO)


3. Investment Chapter.

a) There should not be an investment chapter.

b) In case there is to be an investment chapter, Malaysia should not agree to an investor-to-state dispute settlement (ISDS) mechanism or provision as this makes the government vulnerable to claims and lawsuits from foreign investors of TPP countries

c) The definition of investment should be exhaustive and restricted to approved projects.

d) It should not protect existing investments in Malaysia (in the definition of ‘covered investment’) as this gives existing investors a windfall gain and greatly increases Malaysia’s legal liability.

e) There should not be pre-establishment rights.

f) It should not restrict regulation of capital flow; and thus this chapter should not require free movement of capital flows.

g) There should not be a provision on “fair and equitable treatment.”

h) There should not be an expropriation provision. At the least, there should absolutely not be a provision on expropriation that includes “indirect expropriation.”

i) There should not be restrictions on performance requirements beyond those at the WTO

j) There should not be restrictions on affirmative action requirements such as Bumiputra equity requirements, Bumiputra senior management and board of director requirements etc. If there are such provisions, Malaysia must have a horizontal exception (non-conforming measure) in Annex II (to allow future measures to violate TPP even more) for all relevant affirmative action requirements.

k) It should not bind state and local governments as a number of investment disputes have already required national governments to pay monetary damages for the violations of the investment protection provisions by state/local governments.


4. Government Procurement

(a) There should not be any government procurement chapter.

(b) If there is to be such a chapter:

i) it must have provisions or effective exceptions that allow for freedom for Malaysia to maintain policies allowing preferences for locals, and for set asides for specific local communities, as according to national objectives.

ii) it should have high enough and adequate threshold levels.

iii) it should be liberalisation on a positive list basis (only the entities listed open their procurement)

iv) Malaysia must be allowed to open fewer ministries than developed TPP Parties

v) It should not open Malaysia’s procurement at subnational (eg state and local government) levels

vi) it should not open the procurement of any SOEs/GLCs

vii) It should also not restrict offset requirements/encouragements in any way.

5. Intellectual property

(a) There should be no intellectual property chapter.

(b) If there is an IP chapter, it should not go beyond the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

i. Most importantly, there should not be any extension of patent term.

ii. There should not be any provision.

iii. not requiring data exclusivity, linkage between patent status and medicine registration, patents on new uses (or diagnostic, therapeutic and surgical methods) or ban on pre-grant patent opposition, etc.

iv. There should be no copyright term extension.

v. There should not be provisions requiring patents on plants, animals and naturally occurring microorganisms. (This would go against our Patent Act 1983.)

vi. There should not be any provision requiring Malaysia to join the International Convention for the Protection of New Varieties of Plants 1991 (UPOV Convention). (Malaysia already has the Protection of New Plant Varieties Act 2004 which should not be amended by the TPPA).

vii. There should not be any provision requiring Malaysia to join the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (1977), as amended in 1980.


6. Competition and State Owned Enterprises

(a) There should be no competition chapter

(b) If there is a competition chapter, it should not be enforceable via state-state dispute settlement.

(c) There should not be any provisions or section on state owned enterprises, as these would restrict their operations or viability.


7. Environment Chapter

(a) Should not have an Environment Chapter. Environmental concerns and the public interest should override any commercial interest;

(b) If unable to do away with the environment chapter following conditions shall apply:

i) It should not lead to undermining of existing environmental laws and policies, including international environmental agreements;

ii) Should not lead to undermining the country’s policy space in international negotiations on MEAs (multilateral environmental agreements) including UNFCCC.

iii) The United Nations Framework Convention on Climate Change should not be undermined;

iv) We should not agree to new market mechanisms under the UNFCCC or in other arrangements related to climate change;

v) Should not agree to liberalization of environmental goods and services;

vi) Should not undermine existing support for local fishermen.

(c) In relation to the IPR chapter and environment:

i) Should not undermine farmers’ rights and existing Plant Varieties Act. Should not force us to agree to UPOV 1991;

ii) Should not restrict existing flexibilities in WTO TRIPs agreement to promote local innovation and production of environmentally sound technologies.

(d) In relation to Environment and Investment chapter:

i) Should not have an investment chapter;

ii) Should not undermine policy space to carry out environmental, health and safety measures which should in fact evolve to protect the public and the environment.

8. Financial Services Chapter

(a) There should be no financial services chapter

(b) This chapter should not require Malaysia to liberalise its financial services or bind its level of financial openness.

(c) It should not in any way reduce the ability or policy space of Malaysia to regulate the financial sector, especially for the purpose of financial stability.

(d) Malaysia should not be prevented from having maximum policy space to introduce or strengthen capital controls over the inflow and outflow of funds.

(e) The chapter should not require Malaysia to open up to the establishment or spread of new financial instruments, especially introduced by foreign institutions, since the risks of this are little known.


9. Telecommunications

(a) There should be no telecommunications chapter.

(b) Any telecommunications chapter should not have additional obligations aimed at ‘major suppliers’ such as Telekom Malaysia (otherwise Telekom Malaysia’s profitability and ability to achieve social objectives may be severely harmed).


10. Food Safety and Labelling

(a) There should not be any provisions (for example in a chapter on TBT or SPS) that restrict the ability of Malaysia to regulate in favour of food safety; in particular the TPP should not require changes to our existing laws (i.e. Biosafety Act 2007 and Food (Amendment) Regulations 2010) that require the identification and labelling of genetically modified organisms (GMOs) and products of such organisms, including GM food.


11. Public Health

(a) The TPPA must not contain provisions that reduce the ability of patients and government to obtain medicines at affordable prices.

(b) It should not have any provisions that discourage or prevent the viability and growth of production and use of generic medicines.

(c) Tobacco control measures (such as regulations on cigarette packaging, and on advertising of tobacco products) should be explicitly excluded from the TPP (a ‘carve out’ for tobacco control measures).

(d) The TPP must not restrict the ability of government to require quantitative ingredient declarations or health warning labels on alcohol in as large and prominent manner as desired, for consumer/health reasons.


12. Halal Products

(a) The TPP should not reduce the ability of government to regulate halal products. Therefore there should be a carve out (exception) from the TPP for regulations on halal products.


13. Regulatory coherence chapter:

a) There should be no regulatory coherence chapter

b) If there is a regulatory coherence chapter:

i. It should only apply at the federal level

ii. It should only apply to Ministries listed

iii. It should only apply to laws

iv. It must not be enforceable via state-to-state or investor-to-state dispute settlement.

14. Transparency chapter

a) There should be no annex on pharmaceutical reimbursement

b) There should be no provisions here or in other chapters that allow the tobacco industry to influence or comment on tobacco control measures as this is contrary to the FCTC.


15. Preamble

a) This should have provisions recognising the different levels of development of the TPP Parties and therefore the lesser obligations on developing countries

b) Affirming the importance of policy and regulatory space including for health, environment, consumer protection, financial regulation etc

c) Not have support for:

i. Trade liberalisation

ii. Protection of foreign investors/investments.

iii. Stronger intellectual property protection

16. Dispute settlement chapter

a) There should be no non-violation provision


17. Exceptions

a) The exceptions chapter should have effective exceptions needed (e.g for financial crises, health, environment, consumer protection, halal etc) that apply to all chapters




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