{"id":15261,"date":"2015-11-05T21:30:25","date_gmt":"2015-11-05T13:30:25","guid":{"rendered":"http:\/\/maddruid.com\/?p=15261"},"modified":"2015-11-06T11:53:03","modified_gmt":"2015-11-06T03:53:03","slug":"2804-tpp-exit-clause-makes-sovereignty-concerns-irrelevant","status":"publish","type":"post","link":"https:\/\/maddruid.com\/?p=15261","title":{"rendered":"[2804] TPP exit clause makes sovereignty concerns irrelevant"},"content":{"rendered":"

Text to the Transpacific Partnership came out today. I have yet to go\u00a0through it fully. It is massive and it can be technical. It\u00a0is\u00a0worse than Sejarah Melayu<\/em>. It will take time.<\/p>\n

Nevertheless, I attended a briefing at the trade ministry earlier today and I think I understand\u00a0the gist of the most important chapters. My somewhat initial\u00a0impression: there are damn lots of exemptions.<\/p>\n

All these exemptions \u2014 including the continued maintenance of the Bumiputra policy, flexibility to government procurement for up to 25 years after signing\/ratification much to the benefits of\u00a0local firms and even what appears to be status quo for a lot of GLICs and GLCs \u2014 should allay nationalists, protectionists and anti-globalization groups\u2019 fears that Malaysia is\u00a0surrendering our policy space to foreign governments and multinationals.<\/p>\n

In fact, there are so many exemptions\u00a0that\u00a0I am unsure I should\u00a0support the agreement as strongly as I did previously, notwithstanding progress made on market access and tariffs. I have always understood that any FTA is not a real free trade. We live in a imperfect world and I realize\u00a0that much, but the exclusions\u00a0Malaysia won\u00a0exceed my expectations. Hence, my\u00a0surprise.<\/p>\n

But the one clause that blows those \u201dsovereignty\u201d\u009d concerns out of the water is the exit option\u00a0stated in the last chapter of the agreement. The TPP allows any country to quit the group unilaterally by giving a 6-month notice without incurring any penalty.<\/p>\n

The easy exit clause means most of the requirements under TPP, like the extension of copyrights from 50 to 70 years and protections for biologics, are reversible by simply quitting the TPP. I reject the sovereignty argument but, if joining the TPP\u00a0means\u00a0losing national sovereignty, then the ability to quit and to reverse those policies must mean Malaysia is\u00a0always be in control of its policy space.<\/p>\n

(Not everything is\u00a0reversible however. For instance, as I understand it the WTO disallows import tariffs to go up from any point of time and it does seem the TPP’s lower tariffs would be applicable\u00a0even in the case of exit… I am unsure how post-TPP-exit discriminatory tariffs would work within WTO settings however. We need a trade law expert to answer that hypothetical.)<\/p>\n

At the very least, the exit option lowers the cost and risk of joining the grouping.<\/p>\n

Whatever it\u00a0is, I come from the perspective we should always strive to create a\u00a0rules-based world\u00a0and then makes the rules as transparent as possible. To say it differently, we should reduce the discretionary powers from the authority as much as possible whenever it makes sense. I suppose, this originates from my libertarian tendency to control powers, be it states, companies or individuals.<\/p>\n

In any case, I am a bit disappointed with the concessions\u00a0Malaysia won, especially in terms of government procurement, state-owned enterprises and Bumiputra policy. I had believed TPP could liberalize Malaysia further more\u00a0than local politics would allow it. Politics won.<\/p>\n

Yet, I think I can stomach that. All this is a process\u00a0and there will be\u00a0another time. And\u00a0right now, the TPP as it is seems okay to me. As I told somebody earlier today, better in than out.<\/p>\n

Or, better we set the rules from\u00a0a position of strength instead of wanting to join later and having to accept the rules from a weaker position.<\/p>\n

Touching on the exemptions again, perhaps in retrospect we had too much strength at the negotiating table.<\/p>\n","protected":false},"excerpt":{"rendered":"

Text to the Transpacific Partnership came out today. I have yet to go\u00a0through it fully. It is massive and it can be technical. It\u00a0is\u00a0worse than Sejarah Melayu. It will take time. Nevertheless, I attended a briefing at the trade ministry earlier today and I think I understand\u00a0the gist of the most important chapters. My somewhat […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,8],"tags":[332,1627],"class_list":["post-15261","post","type-post","status-publish","format-standard","hentry","category-economics","category-politics-government","tag-free-trade","tag-trans-pacific-partnership"],"_links":{"self":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/15261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15261"}],"version-history":[{"count":20,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/15261\/revisions"}],"predecessor-version":[{"id":15281,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/15261\/revisions\/15281"}],"wp:attachment":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}