Malaysia too hasty in signing EFTA trade agreement
Consumer’s Association of Penang - 24 June 2025
Malaysia too hasty in signing EFTA trade agreement
CAP expresses deep disappointment over the Malaysian Government’s decision to rush into signing a trade agreement with Iceland, Liechtenstein, Norway and Switzerland that together form the European Free Trade Association (EFTA) on 23 June in Norway.
The Government failed to address critical concerns raised in our Memorandum submitted earlier this month, based on the leaked text of the intellectual property (IP) annex to the Malaysia-EFTA Economic Partnership Agreement (MEEPA).
The full text of MEEPA has now been published. Contents of the IP Annex are substantially the same as the leaked text. In the CAP Memorandum, we have set out in detail our concerns on the IP Annex. We reiterate our demand that Malaysia must retain its full sovereignty to use all aspects of the flexibilities and full discretion in the World Trade Organization (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). This allows Malaysia to legislate and take any steps needed to further its national interests, including to expedite the entry of generic competition and to improve access to affordable medical products. Rising costs of healthcare, a big part of which is medicines costs, have triggered national debate and the Government has stressed the importance to increase local manufacturing. Yet the MEEPA’s IP annex requires Malaysia to effectively extend monopolies of multinational pharmaceutical companies to the detriment of local industry and affordable access.
The IP annex of MEEPA also threatens our agriculture sector. We are particularly concerned about the inclusion of the highly restrictive, inflexible legal framework for plant variety protection known as the International Union for the Protection of New Plant Varieties (UPOV 1991). We stress that Malaysia should maintain its existing Protection of New Plant Varieties Act 2004, which uniquely balances different interests in the agricultural sector and recognises farmers’ rights to save, use, exchange and sell farm-saved seed and propagating materials. We must not be pressured into joining UPOV 1991 that will go against those farmers’ rights.
Even worse, these IP commitments that require significant changes to Malaysia’s existing laws will apply to all countries, not just the EFTA members, restricting the development of our local pharmaceutical industry and adversely impacting the rights of Malaysian farmers.
Based on the published MEEPA text, we also note that government procurement has again been liberalised despite the problems with government procurement liberalisation already faced in implementing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was highlighted to the government during the MEEPA Town Hall session by the Ministry of Finance on 6 October 2023.
It is highly questionable what tangible benefits Malaysia stands to gain from the MEEPA, given the extensive commitments it is required to undertake that are lop-sided. The EFTA countries, including Switzerland, represent a relatively small export market for Malaysia — their combined population amounts to just 42% of Malaysia’s own. For example, the EFTA summary of the MEEPA states that : “For palm oil, Switzerland grants Malaysia limited preferential market access in the form of tariff-rate quotas at reduced duty rates. These concessions are identical to those granted by Switzerland to Indonesia and are subject to the same technical and sustainability requirements”. The tariff reductions are 20-40% for 12,500 tonnes/year if all the environmental criteria can be met by Malaysia. So the export volume is small, and Malaysia is not getting any additional preferential market access. As is well known, there are widespread concerns in Europe on the sustainability of Malaysia’s palm oil production.
Thus, by agreeing to obligations beyond the minimum requirements of the WTO TRIPS Agreement in the context of this limited goods market, Malaysia risks making disproportionate concessions in return for minimal economic gains.
CAP strongly urge the Malaysian government to reconsider its position and not take the next step to ratify the MEEPA until a full cost-benefit analysis and human rights impact assessment are conducted with meaningful engagement of civil society organisations, farmer organisations and patient advocacy groups. We stress that the MEEPA must not be ratified without full transparency, meaningful public consultation, parliamentary scrutiny and approval.
Mohideen Abdul Kader
President
Consumers Association of Penang
