Be an Informed Opponent of TPP, Not a Speculative One! Part 1

Warning: Personal point of views. As the title of my blog, this is Trash Talk.

Yesterday I finally got some free time watching this recording of Sanya Reid Smith presenting her opposing views on TPP. To be frank, I felt discomfort after watching the first part of the video. I find it speculative and misleading. I posted a facebook post about it after that to voice my concern. However, I do feel that I need to further blog about it to place more solid facts on this.

My Stance

I am 50% supportive of TPP, with the condition that RCEP signed successfully. I believe that both are inter-related as a form of international political agenda by two major powerhouses: United States and China. Therefore, it is important for Malaysia to have both position. If RCEP is not going to be successful, TPP could be a huge trap (It can happen just like how US turn AMF into a junk). However, if RCEP is going to be signed, TPP can be a form of defence card against China. It is always safe for Malaysia to be in both TPP and RCEP. Either M'sia will survived being a hypocrite or get squeezed in between US and China. 

The Video
Watch the video to hear Sanya's views on TPP.

Part 1: 
The Bad Examples

At 3:19, she used an example of rice import. M'sia's BERNAS is the monopoly who got special license to import rice products without paying tariffs (license end 2016). Refer to Vengedasalam's study on M'sian rice trade, we do not produce enough rice for our own. Therefore, to have a free trade on rice is extremely important to ensure food adundance. Furthermore, rice is an important food source in M'sia, if M'sia impose tariff on it, of course the government will earn a lot, but we will starve becasue we do not have the ability to fullfil our own need! Her logic will only be true if more M'sian become rice farmers, which is a bad idea for an industrailized country. Furthermore, to ship the rice from US to M'sia had increased it's costs compare to locally produced rice. No matter how much subsidies the US government gave to their farmers, if they export their rice, their subsidies came along with it. I don't think US could be that stupid to do so.

Palm oil & Indonesia is another super bad example. How could M'sia palm oil goes into Indonesia when Indonesia increases it's export tax? I can't get the logic. Indonesia is the largest palm producer n their production exceeding their own need n they never import palm oil! If Indonesia really did increase their export tax, it actually gained M'sia a better position in the market because palm oil from Malaysia will be cheaper. Furthermore, the exclusive nature of TPP had put the original members in a more disadvantage position according to Pradumna's study. If Indonesia decided to join later, they will have to get along with the original members. That's what had happened to Japan, where they have to met a lot of pre-conditions in order to get into TPP negotiations according to Kelsey.

Wrong Tarriff-Elimination Schedule Information: 4y More, Not 14y!
I don't blame her for getting it wrong. The document is 200+ pages long and she had picked a bad example: rice! Msia's rice tariff schedule is in B11 stage, 11 years to zero-tariff. While US's rice tariff schedule for Msia is in B5 stage, 5 years to zero-tariff. Therefore, the number is a tricky one to play with.

Furthermore, the max 30 years tariff schedule from US are items listed in the catagory US17 and US24. There were only 40 items under US17 cat, and 58 items under US24. Majority of the items are only enforced for Canada and New Zealand. I can't find any US17 or US24 imposed to Malaysia in the US tariff schedule. For Msia, the maximum tariff schedule is US23 cat, 20 years on cane sugar. Therefore, check the fact before taking this point. 

The Good Example

The only good example is on the scraps materials. Recycling based industries are never that green and clean. Sometimes, it could be toxic. It is possible that some developed countries are looking for a way to get rid of their trashes, using the holistic name of "recycling" and get back the recycled materials. India is the best example! It has been known that the US exported their obsolete trashes there for the purpose of recycling to get the metals. The process is in India, therefore, all those toxic wastes, gases, will be in India, and they will get back the clean recycled final products which are metals. Fishy indeed. That is the best evidence to oppose TPP.

The Strongest Point

Great point about the exception list. Mustafa is a lazy guy. If our government is hardworking, why need to hire PwC to research on TPP's impact? Why can't our government set up a team locally to do the analysis? And why M'sia hire a US firm to do the research? Isn't the outcome expected to be bias? This is a risk on M'sia for signing the deal without much effort. Another good point that Sanya brought up is about the GDP% calculation using the NTM assumption! M'sia didn't really negotiated any NTM under TPP, I can only see Japan's negotiation documents. Nobody knows what's the NTM M'sia have on the table. I could have missed it, if anybody knows what it is, do inform me!

The Speculation

The national treatment interpretation is misleading by saying member cannot ammend the law. Example in Singapore, ammendments are frequent. To ammend the law in a fair for foreigners doesn't mean you cannot ammend the law. Her way of presenting this point is speculative, and it dissapointed me when a legal expert presented the national treatment clause that way. I lose a bit respect of her becasue of that. There are many ways to have fair rules and regualation, at the same time, ensure the local small players able to compete with the foreign mega enterprises. It really depends on our own policy makers. 

Let's look at the example of IP law in Singapore. We all have to enforce national treatment clause under TRIPS agreement. However, Singapore government started a lot of temporary measures to encourge the locals to register their IP. While in M'sia, this method might not work. Why? Let say if the government gave a fund to encourage the locals to register their IP, I bet! I bet that 50% of that fund will ended up in some politician's personal bank account!

Conclusion

No conclusion by now, tomorrow I'll analyse the next part of her video.