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Conclusion to Pacific trade pact unlikely to happen in Obama’s visit to Malaysia

Conclusion to Pacific trade pact unlikely to happen in Obama’s visit to Malaysia

US President Barack Obama's visit to Malaysia is unlikely to see any conclusion to the ongoing Trans-Pacific Partnership Agreement (TPPA) negotiations.

Obama begins his Asian tour – encompassing South Korea, Japan, Philippines and South Korea – lacking any authority to close any trade agreements.

This is due to strong opposition from Congress against the TPPA, which is seen as a deal which benefits the elite and neglects the rest.

In a teleconference with The Malaysian Insider this morning, Congressman Brad Sherman said the TPPA was a deal which decimates the lower- and middle-income classes in the US.

"Those in Wall Street will become richer while the working class will become poorer," said Sherman, a ranking member of the trade subcommittee of the House Foreign Affairs Committee.

"The TPPA mimics many false claims made to promote previous trade agreements," he added.

According to Lori Wallach, the director of Public Citizen's Global Trade Watch, both Democrats and Republicans are strongly opposed against the TPPA.

As a result, Congress has steadfastly refused to grant Obama the fast-track authority to pass the TPPA, meaning no deals can be concluded during this tour.

Sherman and his congressional colleague Alan Grayson, held a press teleconference this morning to counter the geopolitical and foreign policy arguments raised by TPPA supporters.

Under the ongoing negotiations, the US wants national government contracts above a set threshold be made available to firms from all TPPA countries on equal terms.

However, in order to implement this rule, the “Buy American” preference would have to be waived, something which both Sherman and Grayson were firmly opposed to.

The demand from the US has also faced strong opposition in Malaysia due to the affirmative-action policies practiced by Putrajaya.

Affirmative-action policies guarantee that the Bumiputera do not miss out on their share of the economic pie in Malaysia.

Another obstacle is that the US have refused to guarantee TPPA countries that their firms would also get the same access to the procurement activities of the 52 states in the US.

Grayson, who sits in the Foreign Affairs Committee, describes the TPPA as a job-killing agreement which does not benefit the US.

"These free trade agreements want to push the country further and further into debt. Prior to signing these agreements, the US often had trade surpluses.

"Since the North America Free Trade Agreement (Nafta) came into effect, we have never had a trade deficit of less than US$140 billion (RM462 billion)."

In the past 12 years, the United States has had a trade deficit of at least US$350 billion (RM1.1 trillion), he said.

"This means that foreigners have US$350 billion to buy our assets. We are basically taking our country and selling it off cheaply," Grayson said.

Sherman said proponents of the TPPA have argued that the agreement would help contain China's growing economic might and power in the Pacific Rim.

"In reality, the TPPA would expand Chinese exports to the US under the agreement, goods which are 50 to 70% made in China, and finished in Japan or Vietnam would get duty-free access to the US.

"With a little fudging, goods 70%-90% made in China will benefit from the TPPA. They reap all the benefits and do not even need to sign any agreements or make concessions."

Sherman said he opposed many of the trade agreements which the United States had adopted over the past two decades.

"These trade deals were sold on the premise that they would expand US job growth and boost American exports.

"Instead, these trade deals contributed to a massive US global trade deficit and enormous losses in US jobs," Sherman said.

Wallach said Congress was increasingly sceptical about the TPPA and a January 2014 legislation to enact the fast-track authority ended before it even started.

The fast-track authority grants the US president the authority to negotiate international settlements which Congress can approve or disapprove but cannot amend.

"In late 2013, 180 House of Representative members announced they would never authorise fast track authority again," Wallach said.

In Malaysia, non-government organisations (NGOs) and Pakatan Rakyat have also voiced their opposition against the TPPA.

Putrajaya, especially the International Trade and Industry Ministry, have come under fire for their opaqueness in disclosing information relating to TPPA negotiations. – April 23, 2014.