The coming free trade shock
Sun2Surf (Malaysia), 18 Jul 2006
The coming free trade shock
If the popular protests that have rocked the World Trade Organisation talks in past years are any indication, there will be much public anger against the free trade agreements (FTA) that are being lined up between economic giants like the US and Japan and developing countries including Malaysia.
The causes of this unhappiness are many and far-reaching. They include the loss of jobs when local goods can no longer compete with cheap imports, prohibitive healthcare costs because affordable options such as generic drugs are outlawed and serious shortfalls in public spending when revenue from tariffs disappears with their abolishment.
What is more, these casualties don’t even scratch the surface of the trade agenda that is typically negotiatied during these epoch-making FTA talks.
The evidence that has come in shows that countries that have signed FTAs with the likes of the US have been badly burnt. Even America-friendly Singapore found that its trade balance swung 200% in the US’s favour (an increase of US$2.9 billion or RM10.7 billion) in the year after the two countries inked such an agreement.
These concerns have an immediate relevance for Malaysians since the US is promising its trading partners favourable terms if they sign an FTA with Washington by the middle of next year.
With such pressure on countries that depend greatly on access to the US market, developing countries will find it difficult to resist the clout of the American negotiators.
The FTAs place the US’s trade partners in a situation that the world’s sole superpower wants and so extracting political and cultural cooperation becomes much easier for Washington. Support for the US’s war on terror and its war in Iraq are just two irons in its geo-political fire that demonstrate the leveraging power of the FTAs.
Given the tectonic shifts that will be reshaping the economic landscape worldwide, it is urgent that the people take a close interest in what will be gained and what will be traded away as the unequal partners sit down to discuss their future in free trade.
However, knowing precisely what that involves may not be possible for the public due to a confidentiality clause which is the norm in these FTAs.
This leaves the public to make known to our negotiatiors what their concerns are in definitive terms, so that these views can act as the limits beyond which they will not allow their rights to be eroded.
It is expedient therefore for every citizen to teach himself what the initials FTA portend.
