Malaysian manufacturers wary of US move on patents
Business Times, Malaysia
Malaysian manufacturers wary of US move on patents
By Rupa Damodaran
22 August 2006
Malaysian manufacturers are wary of any move by the US to incorporate software patents and pharmaceutical patents in ongoing Free Trade Agreement (FTA) talks between the US and Malaysia.
According to the Federation of Malaysian Manufacturers (FMM), the US track record in FTAs elsewhere shows that the Americans seek to extend patents beyond what is accepted globally under the World Trade Organisation (WTO).
Such a move would not have a positive impact on trade facilitation and market access for Malaysian manufacturers, FMM president Datuk Yong Poh Kon said in Kuala Lumpur yesterday.
Strengthening intellectual property rights (IPR) enforcement generally boosts confidence among foreign companies to invest in research, software, pharmaceutical, biotechnology and technology-based industries in Malaysia.
As a WTO member, Malaysia is signatory to the Trade-Related Aspects of Intellectual Property Rights Agreement (Trips), a comprehensive multilateral agreement on intellectual property.
Yong said the US FTAs in Chile and Singapore, however, saw the US seeking to extend patents for 30 to 40 years through what it called "Trips Plus".
"We have indicated to the Government to stick to the original clause (of Trips) as there is no additional benefit for it to be extended. We feel it is a dangerous position for us to agree to as the US has a large resource of companies that would patent certain software instructions," he added.
Yong said if Malaysia agrees to extend patents beyond Trips, manufacturers would also face difficulty to produce generic drugs.
FMM adviser on WTO and FTAs and former Malaysian ambassador to WTO Datuk M. Supperamaniam said Malaysia has negotiated in the WTO for flexibility where developing countries that do not have manufacturing facilities can import generic drugs from other countries, like India.
The FTA talks between Thailand and the US broke down mainly because of this issue, as the Thais have a major health programme using generic drugs that the Americans decided should not be allowed.
FMM, which has lent its support for the Malaysia-US FTA, has called for the elimination of duties on footwear (up to 48 per cent), textile (6.5 to 14.7 per cent), apparel (1.1 to 28.6 per cent) and ceramic tableware (up to 25 per cent) to enable Malaysian products to gain better access into the US market.
"More importantly, it will bring in a new group of trade players. These are US investors who recognise that if they set up a plant in Malaysia to tap regional markets and have a full confidence that whatever they produce here they can send back to the US duty free," added Yong.
The US is Malaysia’s largest trading partner while Malaysia is the US’s 10th largest trading partner.
Total US investments in Malaysia is worth over RM76 billion while total trade grew by 8.7 per cent to RM160.95 billion from 2004 to 2005.
The Malaysia-US FTA negotiations that was launched on March 8 has seen two rounds of discussions and is expected to be concluded by the end of the year.
