Pejuang strongly objects ratification of ‘economic-unfriendly’ CPTPP

PARTI Pejuang Tanahair strongly advocates against ratifying the Comprehensive and Progressive TransPacific Partnership (CPTPP). The ratification of CPTPP was also rejected by former prime minister Tun Dr Mahathir Mohamad under the Pakatan Harapan Government. 

The present Government is expected to decide on ratifying the CPTPP in October 2021.

After reviewing and holding various engagement with economists and chambers of commerce, we agree that the terms and conditions of the CPTPP agreement are not in favour to our economy and conflicts with our constitution, laws and direction.

The CPTPP will also be a liability when we agree to allow foreign companies to sue our Malaysian Government billions of ringgit for various reasons even if it is against the country’s policies, laws and constitution.

We agree and in support with the media statement by Gabung Secretariat issued on Oct 21 to reject the CPTPP by the Malay Coalition Organisation.

Pejuang rejected the CPTPP based on three main factors. The first factor is the negative list policy of the CPTPP agreement which automatically liberalises all sectors (upon ratification) including the liberalisation of government procurement and only exclude those sectors which is explicitly stated in the agreement (negative list). 

It is impossible for a government to explicitly list all the sectors that needed to be excluded, hence any oversight will leave a huge damage to the industry, especially the micro, small and medium industries.

The second factor is in term of additional markets provided by CPTPP countries. The benefits from three additional markets cannot compensate the enormous opportunity cost and lost to our economy. 

When we ratify the CPTPP agreement, we would only have an additional export access to Canada, Mexico and Peru. Malaysia already has free trade agreement with seven other CPTPP countries which to-date, the opportunities have not been fully optimised. 

Armin Baniaz Pahamin (standing) with Pejuang chairman Tun Dr Mahathir Mohamad

Only a handful of large companies will benefit from the free trade with the three additional markets.

The third factor is in terms of ‘cost’. The cost of ratifying the CPTPP agreement is not exhaustive and includes the losses to be incurred by local companies that currently enjoy almost 100% from the federal government and GLCs procurement. 

Ratifying the CPTPP agreement would limit government and government-linked companies’ (GLCs) procurement to only 40% for local companies to be shared by Bumiputera, small medium enterprises (SMEs) and companies located in Sabah and Sarawak.

This 40% restriction also applies to procurement by PETRONAS and all other big GLCs which currently practiced 70% procurement from Bumiputera companies without any restrictions to adopt 100% procurement from local companies.

The costs that need to be considered also include the risk of the Government being sued for billions of ringgits as stipulated in the investor-state dispute settlement (ISDS) rules. Governments can be sued without limit under ISDS rules. 

Why do we want to allow our Government to be sued by foreign companies and be tied in our policies without being able to move, introduce or change national policies for the benefit of our people?

Pakistan was forced to borrow and pay US$5.9 bil (in 2019) to an Australian mining company after being sued for violating Integrated Services Digital Network (ISDN) regulations. Egypt was sued for implementing the minimum wage rule in 2012. South Africa had to withdraw some of its actions under the Black Economic Empowerment’s economic restructuring policy after being sued.

We call on all chambers of commerce and political parties to jointly urge the Ministry of International Trade and Industry (MITI) not to ratify the CPTPP agreement as it does not benefit the micro, small, medium industry and will be a liability to the country. 

Only a handful of big corporations will benefit.

MITI has set October 2021 to give a decision regarding the ratification of the CPTPP agreement.


Armin Baniaz Pahamin is a Parti Pejuang Tanahair central executive committee member and chairman of the party’s central economic bureau.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.


Photo credit: Korean Times

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