Friday 29 Mar 2024
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This article first appeared in The Edge Malaysia Weekly, on November 30 - December 6, 2015.

 

Charles-Santiago_40_TEM1086_theedgemarketsWhile Tan Sri Rebecca Fatima Sta Maria, the secretary general of the Ministry of International Trade and Industry (Miti), opines that the Trans-Pacific Partnership Agreement (TPPA) has no downside for Malaysia, opposition lawmaker Charles Santiago believes otherwise.

While he confesses to not having finished going through the 6,149 pages of the agreement, his first complaint is about the cost of medicine. He believes it could increase considerably should Malaysia sign the agreement.

“If you read the agreement that Jordan signed with the US, the prices of medicine rose 30%,” says Santiago.

Jordan and the US signed a free trade agreement that came into force on Jan 1, 2010.

Similarly, policy manager for the Malaysian AIDS Council, Fifa Rahman, has been quoted by the media as saying that studies in Jordan and Thailand found that the provisions resembling those in their agreements led to an overall increase in the cost of medicines.

“Another study by Canadian healthcare expert Professor Joel Lexchin showed that under the Comprehensive Economic and Trade Agreement, which has similar provisions to the TPPA, will increase Canadian drug costs by between 6.2% and 12.9% starting in 2023. Once the TPPA is signed, the effects will not be felt immediately, but in the long run, Fifa was quoted to have said.

Rising medicine prices would add to the government’s burden of providing subsidised healthcare to the public. A reason for the increase in medicine cost is that the patents can be extended if used for other purposes, Santiago points out.

According to the Cancer Association of Malaysia, one in four Malaysians will have cancer and 1 in 18 women will have breast cancer at some point in Malaysia. This, coupled with high levels of hypertension, an ageing Malaysian population and a healthcare budget that is dwindling, paints a bleak outlook. “Salaries are on a downward spiral — how will we cope?” Santiago asks.

While the ringgit has weakened considerably, the 2016 budget allocated RM23.3 billion or 8.6% of the total of RM267.2 billion to healthcare. About the same amount was allocated in 2015.

Santiago explains that after reading the text of the agreement, he understands that the Malaysian government has agreed to an eight-year patent on biologics from zero currently. This imposition of patents will prevent the entry of biosimilar types that are much cheaper than biologics.

“It’s good for business, yes, but it’s not good for the man on the street. The general thinking is that what is good for business is good for the country but that argument does not make sense anymore; the profits stay only with the top 1% of the population, not the 99%. So, things have to be evaluated,” he reasons.

At the same time, Santiago says he was taken aback by the US giving in to literally all of Malaysia’s requests with regard to the TPPA. This included giving in to issues such as the bumiputera agenda, state-owned enterprises and government procurement.

Santiago says Michael Frohman — the US TPPA representative — has come to Malaysia on numerous occasions, met the opposition lawmakers, Santiago included, and spent an hour or two with them each time.

“Our closeness was to the extent that we were on a first-name basis,” he explains.

He says from the outset, there was a lot of lobbying, where Frohman stressed the importance of there being a level playing field between the bumiputeras and non-bumiputeras, the Malays and the non-Malays and how the SOEs needed to be opened up.

Santiago recounts that at one meeting, Jasin Member of Parliament Datuk Ahmad Hamzah asked Frohman what would be the outcome if Malaysia did not sign the TPPA.

“Frohman was quite vocal. He said even

Vietnam can make changes, so why can’t you?

“But now, at the last moment, they (the US) gave in to what Malaysia wanted ... It was then that I realised that this agreement is not about trade, it’s about China. The US has no interest in doing business or trading with Malaysia, it’s all about China’s dominance,” he says.

Santiago disputes the claim that the TPPA creates a level playing field for the 12 members. There are countries such as the US and Japan — advanced, industrial nations now looking at high-end technology — against a country like Malaysia whose economy still relies on cheap labour, he says.

“So, do the same rules apply to both (countries)?”

To recap, the TPPA is a free trade agreement between its 12 members — Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, Vietnam and Japan — and touches on a wide range of subjects and an agreement. After seven years of negotiations, an agreement was reached on Oct 5 this year with the respective countries waiting to ratify the agreement by next year.

The Malaysian contingent was spearheaded by Miti. The free trade agreement will be debated in Parliament soon before being signed in February.

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