Most Malaysian businesses will suffer from increased competition while citizens will pay more for drugs if Putrajaya agrees to the Trans Pacific Partnership Agreement (TPPA), Malay Economic Action Council (MTEM) chief executive Mohd Nizar Mashar said today.
The TPPA seeks to liberalise tariffs in goods and services among 12 Pacific Rim countries and bring down barriers in government procurement - a touchy subject in Malaysia where affirmative action has helped Malay businessmen to prosper.
“If government procurement was conducted on a ‘level playing field’, many Malay entrepreneurs would go under as they were not prepared to compete on that basis,” Nizam told a press conference in Kuala Lumpur.
He said the TPPA's impact would be felt in the production of basic foodstuffs such as poultry, meat, milk and cream and rice. These items are now protected by tariff rates of between 40pc and 168pc.
The TPPA would remove the tariffs and would cause local producers and farmers to loose their competitiveness.
Nizam cited the example of local rice priced at RM1.70 a kilogramme while the price of rice from the US would be RM1.43 a kilogramme under the TPPA. The loss of competitiveness would cause loss of market share,closure of certain sectors and job losses among Malaysians, he added.
He also said the healthcare sector was also bound to be adversely affected if the TPPA materialised as some countries in the pact, such as the United States, were planning to lengthen the periods of patents.
The effect of this was that generic drugs which cost much lesser would not be allowed to be sold and the public would be deprived of cheaper medications, he said,
“An example of HIV/AIDS medication which costs an average of RM15,000 now would cost RM67,000 under the TPPA,” added Nizam.
But financial experts said the pact would benefit Malaysia in the long run.
“The TPPA is beneficial to the country in the long term but there will be a period of adjustment needed to implement its changes.”
"There should be gradual opening of the sectors to realign the economy to competitive pressures as it will create the largest trade bloc in the world with a population of 790 million valued at US$28 trillion,” Ratings Agency of Malaysia (RAM) chief economist Dr Yeah Kim Leng told The Malaysian Insider. - July 11, 2013.