Pejuang: Azmin making invalid 'blanket claims' on CPTPP bumi protection
International Trade and Industry Minister Azmin Ali had made invalid "blanket claims" on the protection of bumiputera interest in an upcoming crucial trade deal, said Pejuang president Mukhriz Mahathir.
The trade deal in question is the Comprehensive and Progressive Agreement for Trans-Pacific (CPTPP) which is set to be ratified in the first quarter of next year.
Azmin had told Parliament that under Annex II of the CPTPP, bumiputera privileges in government procurements, entitlement to subsidies, special licences or permits will not be affected by the deal.
Mukhriz disagreed with Azmin's claim that the status quo would remain for bumiputera interests.
"When Azmin speaks of Annex II, he is talking about exceptions to the above provisions, but these exceptions are not as extensive as he makes them out to be. The devil is in the details.
"The fact is that, except in (certain) sectors listed, Malaysia cannot maintain or enforce any 30 percent bumiputera equity requirement," he said in a statement.
Mukhriz also said that Malaysia also could not implement a requirement that investors from other CPTPP parties appoint bumiputeras as senior managers or a majority of the board of directors in a way that would impact the investors' ability to control their investments.
"Moreover, whatever carve-outs stated in Annex II do not relate to the Fair and Equitable Treatment (FET) and expropriation provisions in the body of the investment chapter.
"As a result, any affirmative action policies, including those in favour of bumiputeras, can still be challenged by foreign investors from CPTPP parties," he said.
Mukhriz said other CPTPP restrictions would also hinder government efforts to develop bumiputera businesses through government procurement and state-owned enterprises.
He warned that the CPTPP would also lead to more competition for bumiputeras involved in the agriculture industry as the deal mandates that Malaysia must be a party to the Union for the Protection of New Varieties of Plants (UPOV91).
This deal, claimed Mukhriz, will cause Malaysian farmers to relinquish their rights to develop, exchange, and sell their strains.
Negative impact on job market
As the CPTPP also involved the complete removal of import tariffs for member countries, Mukhriz said this would lead to a flood of cheap foreign goods, which could reduce the sale of local products.
"As a result of imports increasing by more than exports, the effect of the CPTPP is estimated to reduce Malaysia's trade balance by US$2.4 billion per year (RM9.6 billion).
"In addition, tariff elimination will cause Malaysia to lose import duties of RM6.4 billion annually. All of these will make it more difficult to reduce the national debt and budget deficit, already under stress by the Covid-19 response and recovery spending.
"This will also have a negative impact on the job market," said Mukhriz, who was once a deputy minister of international trade and industry.
Azmin, said Mukhriz, owed Malaysia a cost-benefit analysis (CBA) of the CPTPP.
"We are concerned that the MITI minister has started promoting and expounding only the good about CPTPP even before the CBA is completed, giving the impression that the purpose of the CBA is only to support his premature conclusion that CPTPP should be promptly ratified.
"The results of the CBA must be made known to the public and be fully debated upon in Parliament for a proper determination of whether the agreement will indeed benefit Malaysians as a whole," he said.
Malaysia was an initial signatory to the CPTPP in 2018, but the cabinet will not ratify the deal until the CBA is concluded. Putrajaya has not pledged to have the CBA debated in Parliament.
Other signatories are Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, and Vietnam. These countries account for 13 percent of global GDP.
Malaysia, Chile, and Brunei have yet to ratify the deal.
China and Taiwan have also formally applied to join the CPTPP.
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