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What people want is fair trade, not free trade

New Straits Times (Malaysia)

Just Sayin’: What people want is fair trade, not free trade

19 Apr 2006

Brian Yap

BEFORE the year 2000, which also happens to be the year President George W. Bush stepped into the Oval Office, the United States only had three free trade agreements - with its North American neighbours Mexico and Canada, and Israel.

Six years later, Australia, Bahrain, Chile, Jordan, Oman, Morocco, Singapore, Peru, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua have joined the list. The Republican administration, one has to assume, has a thing for free trade agreements.

And it wants more. The US administration wants to complete as many FTAs as possible before the July 2007 expiration of its authority to negotiate trade deals under special procedures requiring Congress to speed up its consideration of the deals.

Malaysia might be far from being the most populous country in the world, but we are the US’ 10th biggest trading partner. The US, on the other hand, is our largest trading partner and largest foreign investor. In 2005, we had a total of US$44 billion (RM161 billion) in two-way trade. So, understandably, we’re both very important to one another, economically speaking.

"Malaysia has been at the forefront of the economic dynamism transforming Asia in recent years," US Trade Representative Rob Portman said at the news conference announcing the beginning of talks a month ago. "Malaysia’s rapidly growing economy will help generate meaningful export opportunities for our workers, service providers and farmers."

Nice words, to be sure. Though I’m sure if Portman was in Malaysia, he’d say the same thing, but maybe substitute "our" for "your". According to the Ministry of International Trade and Industry, the issues to be negotiated under the Malaysia-US FTA are: trade in goods (including agriculture products), trade in services (including financial services), investment, government procurement, intellectual property rights, labour, environment, competition policy, Customs procedures, trade remedies, sanitary and phyto- sanitary and technical barriers to trade.

Those are some far-reaching areas. It’s not just some Malaysians who are cautious. Critics of free trade in the US often argue that these agreements open up American workers to unfair competition from low-wage countries. It’s a way for corporations to basically go around the labour laws in their home country, which includes minimum wages, the right to unionise and high-safety regulations, among others. It could be said that it’s similar to the exclusion of foreign maids from our own employment legislation, also an issue of contention.

Then there’s intellectual property rights, which one might think is all about wiping out the pirated movies and music so prevalent here. But a bigger concern than getting a DVD of The Da Vinci Code in advance is how access to much-needed drugs will be affected. Patents will prevail over patients, and generic, more affordable drugs might no longer be available.

In recent years, there have been a huge outcry from the world community over the high prices of antiretroviral drugs (ARVs), so much so that South Africa defied the law to provide HIV/AIDS victims with generic medication. With the WHO warning last year that an HIV epidemic is said to be impending in Malaysia, this is a serious concern.

There are too many issues with the potential Malaysia-US deal to fully explore here, but it’s safe to say corporate interests are often paramount in free trade agreements. The idea of benefits trickling down to the general public doesn’t really hold water either.

Let’s take a look at the North American Free Trade Agreement (Nafta). Fourteen years later, the agreement between the US, Mexico and Canada has resulted in a decrease in wages in Mexico by up to 20 per cent in certain industries, the reduction of influence in trade unions, and, the most ironic of all, a dramatic increase in immigration from Mexico to the US.

If Mexicans are supposed to benefit economically too, then why are they leaving their country even more?

Recently, in a comment to The Nation newspaper, the Argentinian ambassador to Thailand said that the economic strength of the US makes it "virtually impossible" for developing nations to negotiate a fair deal. I’m not a football fan, but I suppose it’ll be like Chelsea playing the national team. I know the minister is often referred to as the Iron Lady, but even she might have a tough time.

Of course, there are always those who will be in favour of the FTA. These proponents, however, should, at the very least, demand that the details of the agreements be explained to the public honestly and clearly. In Thailand, where people have also been opposed to the FTA, even the governor of the Bank Of Thailand acknowledged that a lack of explanation to the public played a part in their disfavour.

Ultimately, however, I think what people want is fair trade, not free trade. Nonetheless, if the argument that the FTA stands to benefit Malaysia as a whole is sound, then this, we hope, can be proven by an open discussion of what the agreement will really mean to individual Malaysians, and not just corporate interests.

The columnist is a writer at the monthly Klang Valley magazine, KLue. Email him at

 source: New Straits Times