A question of talent in Malaysia

In addition to drawing Malaysians home to work, we should equip, educate and train citizens so that they have equal opportunities to excel.

The success of Talent Corporation – a brilliant idea by the prime minister to lure Malaysians abroad to return home to live and work – has been quite impressive.

I am told that many talented Malaysians have answered the prime minister’s call to help transform the nation’s economy and I’d like to think that these Malaysians have returned not just because of the lower tax rate and other personal incentives (such as tax exemptions for two completely knocked down cars) but because they truly have something valuable to offer the country.

I do not for a moment think that these Malaysians returned because they found it tough to work abroad.

Instead, I think they have taken the opportunity under the Talent Corp programme to contribute their expertise and talent to Malaysia’s growth and development.

Although it has been successful since its inception in 2011, Talent Corp (and other organisations that provide incentives to lure Malaysians home) can only be a short-term solution at best.

The longer we rely on Talent Corp, the deeper the failings of our system will get and the more serious they will become. We will continue to be unable to provide the educational training necessary to produce a skilled workforce or to retain existing Malaysians.

There are many reasons why people emigrate and work elsewhere but most leave the country because they believe that their prospects in life will improve or because they no longer feel they belong – alienation and social injustice have driven them away.

Hence, while many millions have been spent on Talent Corp (and spent wisely), I urge the government to remain committed to building capacities within our country as well.

I am not thinking of spending millions of ringgit a la BR1M (people's aid) but of giving the nation the right dose of the good old work ethic.

Schools, besides exhibiting photographs of leaders, should be places where the right values can be inculcated.

The government, via the state apparatus available to it, needs to emphasise on a daily basis the importance of hard work and the inherent character-building effects of such an effort: for example, we’d certainly have enough television airtime for educational programmes if we were to dispense with some of the more sensational shows.

The effects on employment will be obvious. If we look objectively at why we need so many foreign workers, a large chunk of our workforce neither has the right work attitude nor does it feel sufficiently motivated to work hard.

It’s true that some employers take advantage of the presence of foreign workers to depress wages but it also quite clear to many employers that foreign workers work harder and smarter.

It’s not good policy to live with this situation and look for the easy way out (that is, to keep relying on and exploiting foreign labour) without putting serious effort into changing the values and attitudes of our own workforce.

In my experience there is hardly anyone who is incorrigibly bad and beyond help.

People want to better themselves but sometimes they need to be given a leg up. Everyone is capable of realising his or her true potential through nurture, patience and perseverance.

The attitudinal change we need in this country must come from our political leaders as well as employees and employers.

Malaysians are capable of many things and must never doubt this: the sacrifice we all need to make is to be patient, to endure the difficulties of training, and to help the less able and skilled to achieve their goals.

If an analogy is required, I shall say that leaders must learn to appreciate growing their own vegetables and rearing their own chickens. The satisfaction that comes from this is far more valuable than just depending solely on buying groceries from air-conditioned supermarkets.

This is where we must embrace the culture of meritocracy wholeheartedly.

In Malaysia today, meritocracy is a bogeyman, especially among Malays, who are terribly afraid of it without even knowing what it is, and we must discard the notion that meritocracy will have unintended discriminatory or negative effects on any given social group or ethnic community.

Let’s start by understanding what the word means, which is simply this: if we have ability and talent, then we should be rewarded.

We should not reward someone merely because he or she belongs to a certain class or has some inherited privileges.

The idea is simply to inspire and motivate all citizens through ability and sheer hard work. It also means that society and government have a grave responsibility to equip, educate and train citizens so that they have equal opportunities to excel and contribute to our nation.

Citizens can then propel themselves forward and build bigger and better things for the country, which in turn transforms our economy and society. It’s a liberating idea.

Women in our workforce, for example, are fully capable of taking on more demanding tasks at senior levels but we only hear of policies intending to provide them more access to top positions – little has happened to translate policy into action.

The prejudice against women bosses is still widespread and is based on a lack of appreciation for the positive contributions they make.

The skill sets that women bring to the table are largely ignored by men who are worried that their own positions will be threatened.

But as long as women are ignored at the top levels of decision making, the country will lose out on capturing the special talents and skills they possess.

There is also a great deal of prejudice in our society against gays and other minorities who, from my personal experience, are as diligent and capable of great achievements as anyone else.

I have friends who are world-class professionals and possess great ability and integrity who belong to these minorities, and yet we seem to love waging war against them for reasons I cannot comprehend.

If we put more emphasis on creating enemies among our own people, or putting up barriers to excellence because others “threaten” our own positions, then we will never produce the right attitudes or values.

The government must lead, inspire and motivate our workforce by example and through the effective implementation of policy. Malaysians deserve fair wages, adequate training and just rewards when they achieve their targets.

This is a long-term project, of course, but nothing worthwhile can be achieved if we lack perseverance.

As such, Malaysia continues to need Talent Corp but the local workforce needs respect and encouragement if the transformation of our country is to succeed sustainably.

 Contributed by  Zaid Ibrahim, The Star/ANN

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China successfully tested new ultra hypersonic missile vehiche seeks to calm US fears

China hypersonic missile test not targeted at any country: DM CCTV News - CNTV English

The Ministry of National Defense issued a statement on Wednesday dismissing media reports that China's recent ultrahigh-speed missile test flight was aimed at delivering warheads through the missile defenses of the United States.

"It is normal for China to conduct scientific experiments within its borders according to its plans. The tests were not aimed at any nation nor any specific target," the ministry said in a written reply to China Daily.

Western media have been playing up the significance of the hypersonic missile delivery vehicle test since The Washington Free Beacon news website quoted an anonymous Pentagon official as saying that the test was conducted with the aim of sending warheads through US missile defenses.

In an article on the test, the website reported that the new hypersonic missile was detected traveling at extremely high speeds over China.

US Pentagon spokesman Jeffrey Pool told the website, "We routinely monitor foreign defense activities and we are aware of this test."

Observers said reports that play up competition on military capabilities indicate a lack of mutual understanding on the part of the militaries of China and the US, but the misperceptions can be resolved through talks.

Lack of mutual strategic trust between the two nations is the reason why the US is worried about China's military development, said Fan Jishe, an expert on US studies at the Chinese Academy of Social Sciences.

"Washington is afraid that China's growing power will reduce its influence in the region, and threaten the interests of its allies, such as Japan and the Philippines. ... The US still enjoys the leading position in military ability, both strategic weapons and conventional armaments," Fan said.

"The US has been devoted to high-tech weapons research for a long time, and China is still rather backward in this field," he said.

China has been sufficiently transparent on developments in its military technologies to allow for the development of mutual trust with other nations, he added.

Li Qingkong, deputy secretary-general of the China Council for National Security Policy Studies, said, "There is no need for the US or any other country to worry about the development of the Chinese military, given that China's military expenditure is much lower than that of the US."

Such weapons use cutting-edge technology for flying and maneuvering at ultrahigh speeds in space and within the Earth's atmosphere.

The advantages of hypersonic craft include precise targeting, very rapid delivery of weapons, and greater survivability against missile and space defenses.

The Washington Free Beacon said the US, Russia, and China are all engaged in research on hypersonic weapons, while India is also developing a hypersonic variant of its BrahMos cruise missile. - China Daily

Fighting ivory trade the China way

China crushed 6.1 tons of ivory on January 6. Image: @thewcs

CHINA, which has been described by conservationists as the world’s leading hub for the illegal ivory trade, took everyone by surprise recently by destroying some six tonnes of confiscated ivory from its stockpile.

The landmark destruction of the confiscated ivory and products such as carvings and ornaments, which were said to be amassed over the years, is indeed a good piece of news for the world and China deserve all-round applause. The fact that China chose to destroy the ivory on the first week of the New Year is a symbolic gesture of the Chinese leadership that they are in sync with the views and feelings of conservationists and animal-lovers on the subject.

The act of destroying the confiscated ivory in public for the first time by the Chinese authorities indicates that China is not prepared to tolerate the illegal trade in elephant ivory any more. The destruction of the ivory in Guangdong province sends a very powerful message to the Chinese people and the world that China is concerned with animal welfare and it is prepared to work with the international community in protecting and conserving our endangered wildlife.

Ivory is said to be a prized status symbol in the well-to-do Chinese community and it is used in traditional crafts and carvings. China and Thailand have been singled out as the two countries where the demand for ivory has been fuelling poaching activities in Africa according to the Convention on Interna­tional Trade in Endangered Species.

It was recently reported by the International Fund for Animal Welfare (IFAW) that an estimated 35,000 or more elephants are slaughtered annually in a barbaric manner by poachers for their ivory.

Ivory, which has been referred as “white gold”, is said to fetch between RM7,000 and RM8,000 per kg in the black market.

Ivory trafficking apparently is taking a toll on the elephant population around the world and its related activities are now seen by many countries as a threat to regional security.

The decision of China to step forward, perhaps for the first time in history, to destroy part of its stockpile of confiscated elephant tusks and products is indeed a giant step towards conserving and safeguarding these magnificent animals that roam our jungles.

Back home it is heartening to note that the Malaysian authorities too have been on high alert to these ivory smuggling activities. The several tons of ivory shipments worth millions of ringgit seized by our authorities over the years is still under lock and key.

I urge the authorities to emulate China’s move and destroy all the confiscated ivory in public.

Since no one has been arrested so far and we are not seeing any development on the matter, it is advisable for the authorities to destroy all the illegal ivory in our stockpile.

Destroying the confiscated stockpile of ivory will send a strong message to all parties concerned that Malaysia too does not tolerate ivory trafficking and it’s equally serious in wildlife conservation and protection.

The destruction of our stockpile will put a stop to all the speculation and allegations that some of the confiscated ivory in our stockpile has been “leaking out” secretly and is found on the black market.

The destruction of confiscated ivory in countries along the illegal ivory trafficking trade chain will send a powerful message to consumers all over the world that buying is unethical and wrong.

When the Chinese, who are well-known in the world to treasure ivory and its products, can come forward to destroy their stockpile to show their concern and support for wildlife conservation and protection, I am sure we can do the same or better.

Contributed by S. PARAM Ipoh Malaysia

Canadian entrepreneur: Malaysia conducive for start-ups

Hirsch: ‘It takes less than RM20,000 to start a new company within MGVD

KUALA LUMPUR: Canadian entrepreneur Adam Hirsch, who focuses on tech start-ups, finds Malaysia a conducive place for start-ups, not just because of low operational cost or the English language proficiency of the people, but also the ability to get fast results here.

With a recommendation from a friend in 2012 to start his business here, Hirsch told StarBiz: “We can quickly get feedbacks and easily validate the success or failure of a new idea.”

Citing an example of one of his recent ventures to provide a sales training programme for retail and food and beverages (F&B) personnels, he said after a quick check with potential clients on the ground, his team found out in less than a week that many wanted the course but were not willing to pay for it.

“This idea subsequently metamorphosised to become a digital marketing agency where we help our clients do search engine optimisation (SEO),” he said.

The venture, which is only three months old, has 15 clients comprising small and medium enterprises (SMEs).

Hirsch, who founded the Kuala Lumpur-based Mother Goose Venture Developer (MGVD) in early 2013, said he was solely interested in building businesses through his company which he described as a “venture builder platform” that brought people, ideas and resources together to build successful businesses.

The company has six active ventures at the moment, including Hijab2Go and Easy Read. Hijab2go is an e-commerce website specialising in women’s fashion brands, specifically traditional Muslim fashion, while Easy Read is a language education application that helps young adults and professionals learn new languages while reading content that is relevant to them.

“With so much of shared resources, it takes less than RM20,000 to start a new company within MGVD,” he said.
One of MGVD’s ventures, Ticket Hero, has also received a grant from Cradle Fund, an agency under the Ministry of Finance, which promotes early stage funding.

Ticket Hero is an event listing web and mobile application that helps Malaysians discover their city by listing all types of events including arts, cultural, nightlife and sports.

Hirsch, who started two Internet companies in his university days, said there were four categories of assistance available in the start-up community, namely the incubator, accelerator, venture capitalist (VC) and business builder.

“To assist a start-up is not as simple as giving them the funds and a strategy to work on. Hence, you encounter many VCs failing with that strategy. Those VCs that succeed will likely be attributed to the entrepreneurs in the start-up,” he said.

As a business builder, Hirsch, who is keen on the details of building a business, said MGVD used funds to build a business but did not disburse funds like a VC did.

“The No. 1 disease in the start-up community is talking about building companies and yet doing nothing about it. It is more hands-on where we are also involved in marketing and business development, beyond just being a service provider,” he said.

Planning to raise RM1.5mil within the start-up community this year, he said the group would start another 10 ventures within the next two years.

Adding that the group was looking for entrepreneur-in-residence, he said they would do all that was needed to get the business running to become profitable entities.

“We hope to attract more Malaysian entrepreneurs who are ready to lead a project and team. Our goal is to build as many successful businesses as possible and to help entrepreneurs to push themselves towards excellence,” he concluded.

Contributed by  Lim Wing Hooi The Star/Asia News Network

Related post:

The freelance generation

The freelance generation

Young people are finding typical nine-to-five office jobs less appealing, while companies are also realising the benefits of freelancers – more savings on office space and employee benefits.

Full-time jobs? Pfft. Who needs 'em when you can freelance at home in your jammies?

ONCE upon a time, it was only natural to seek and secure a stable job after you graduate, preferably with an established company where you can build your resume based on the reputation of the company.
But now, with the culture of the modern workforce, where demands are high and speed of work is essential, we are seeing the rise of “independent workers” – aka freelancers.

Malaysian Emoployers Federation executive director Shamsuddin Bardan said there has been a “rapid growth” in freelancing in Malaysia, especially with work that can be done online.

He said: “Freelancers have more freedom and flexibility. For some it is about following their passion and being their own boss, while at the same time earning some income.”

According to a PC.com article earlier this year, since Malaysians started using the Freelancer.com website in 2009, over 27,000 freelance jobs have been posted, and over US$851,000 earned by freelancers.

Most of the jobs originate from the Klang Valley, with Malaysian employers mainly hiring freelancers from South Asia. In line with the growth of ICT industries, the most popular projects are software architecture, MySQL and software testing.

The freelance generation

For graphic designer and videographer Zermi Ng, 25, being a freelancer had not only helped him become more productive, but also given him more free time.

“As a freelancer, I usually take about two to eight days to complete a film, and whatever time I have left is usually free for me to do what I want,” he said.

Ng said he could spend just a week to deliver a production and get the same monthly salary he would with a nine-to-five job with five days a week in the office. “The only problem is you might not get a job every month,” he said.

Shamsuddin said: “People who don’t want to be bound by the strict 9am to 5pm working hours would usually choose the freelancing path. But not all jobs can be done by freelancers.

“They usually are professions in the creative field like designers and copywriters, as well as IT or enginering professions.”

He pointed that more companies are now attracted to this new form of hiring and moving away from traditional employment.

The benefits for employers, he said, is they can “save on benefits and statutory payments” while maintaining a lean workforce and meeting bursts in demand.

“For example, a company who specialises in food and beverage will not need to hire a full-time web developer just to set up a website. In fact, the web developer doesn’t even need to show up to the office.

“By hiring full-time staff, there is space reduction, and more budget spent on benefits. If you hire a freelancer, it’s a win-win situation. Freelancers get the freedom they want and companies don’t need to spend on office space.”

According to Sam Haggar, the Malaysia country head of human resource consulting firm ManpowerGroup, freelancing is becoming a trend because more young people like the lifestyle that comes with it.

“The lifestyle of being able to be anywhere at any time while working is becoming more and more of a trend. There is also no geographical boundary when it comes to delivering their work.”

Fashion photographer Bibo Aswan, 24, started his freelance career in fashion photography and potraiture while studying in Form Two. Before he even graduated with his diploma in photography, he already had a handful of clients to start with.

Freelance fashion photographer Bibo Aswan hopes to work with a photography studio in the future to gain more professional experience and gain access to better equipment.

Even during his internship with a photography studio, he found that he preferred a more flexible working schedule. “I could actually continue to work with the studio full-time, but I chose not to. By freelancing, I don’t actually have to work everyday.”

A price to pay

It is important to note that there is a difference between freelance and part-time workers. Part-timers are employees who are entitled to all company benefits and social security like EPF and Socso, but with a lower level of commitment.

But of course, freelancers usually enjoy more freedom and flexibility. In the eyes of the law, however, they have very little leverage against their employers. And on top of that, their income is rarely as stable as that of a full-time or part-time employee.

“Freelancers are paid for their work but they have almost no benefits and have no rights of employment apart from a contract between the employer and the freelancer,” said Haggar.

According to Shamsuddin, there also have been cases where freelancers were scammed and cheated for their services. “There are ‘companies’ and ‘employers’ out there targeting freelancers. They ask for your services and then disappear without giving you payment.”

Shamsuddin said freelancers ought to be careful in dealing with their employers as they might encounter bogus companies or scams. It is vital for a freelancer to request for a civil contract, and also to check the employer and company’s background before committing to a job.

Through both freelancing and working as an employee, filmmaker Joshua Chay, 27, discovered what he wanted to achieve in his career.

Filmmaker Joshua Chay took his freelance career to the next level by starting his own production company called The Spacemen.

“I didn’t see myself working for a company because I wanted to be my own person. In that way I’m able to produce the kind of work I like and I’m passionate about,” said Chay.

Although Chay pursued a freelance career in filmmaking, he was working with many types of clients – including some he didn’t particularly enjoy working with.

“The biggest thing about my freelance career was that it was growing, and fast. But through the jobs, I realised what kind of work I didn’t want to do. So from there, I began to pick my clients and produce the type of work I enjoy and am actually good at,” said Chay.

Haggar added: “That’s one of the great advantages freelancers have – they get to choose their clients and enjoy their work.”

The path to entrepreneurship

Eventually, freelancing became a stepping stone for Chay to venture into something bigger – starting his very own company. He realised the importance of expanding his services, as well as presenting a higher credibility to clients, which is why he founded his own company, The Spacemen, with two other friends.

Ng had also taken steps to expand his services by starting his own company, Mime Studio. “Starting a company will attract more clients, and it makes it easier for us to convince them,” he said.

But on the flipside, despite the liberty freelancers have, Haggar said they often lose out on the mentorship you get from having a superior, and learning from other colleagues. “This form of working may cause young freelancers to be less business-savvy and structured, because they are without guidance.”

Because of this, Bibo plans to work with a professional photography studio in the near future. “I want to do that so I can learn the business side of things. Plus, a professional studeio would also have better resources, like proper production equipment.”

That’s one of the reasons why Chay spent around three years freelancing before he started his own company. He wanted to learn everything from scratch, from the top to the bottom of the production industry.

“Because I started out doing everything on my own, I had to learn everything. And I realised after a while that starting a company was the right move. Multi-national companies may not work with freelancers, but they might if you’re a legit company,” he said.

Freelancers may have the liberty to work when, where and how they want,but they lose out on full-time benefits and social security.

Contributed by  by Kevin Tan The Star/Asia News Network

Malaysia's property market to take a breather in 2014 and 2015

PETALING JAYA: The property market might need at least two years to digest and recover from the various cooling measures that came into effect this month, but expect it to surge again in 2016, say industry officials.

According to Malaysian Institute of Estate Agents president Siva Shanker, 2014 is expected to be a tough year for sales, but the market will find its footing next year and catch the next upcycle in 2016.

“The market ground to a standstill after Budget 2014. There was a knee-jerk reaction in sales.

“It will probably stay in the doldrums for the first half of 2014. The second half may be better,” Shanker, who is also CEO-Agency of property consultancy PPC International Sdn Bhd, told StarBiz by phone.

Shanker believes that speculation over the past few years in the primary market, resulting in “far more properties bought than needed”, had been put to a stop by the new curbs.

“The days of 20%-40% appreciation in property prices after only a few years is over, ” he said.

Even so, Shanker sees the secondary market, which he said had languished for years, regaining its lustre.

“A new launch in Bangsar could set you back RM1,500 per sq ft, compared to RM800-RM1,000 per sq ft for an existing property. The discount goes up to 50% in some prime areas,” he said.

An analyst with TA Research said that unlike previous years, many listed developers have held back on their 2014 sales targets – a departure from their usual forward guidance in December – until a clearer picture emerges from the effects of Budget 2014 and other tightening measures.

The exception is Mah Sing Group Bhd, which is aiming for a 20% increase in sales this year to RM3.6bil.

According to the analyst, policy uncertainty on several fronts – such as whether Iskandar Malaysia’s Medini is exempt from real property gains tax, or the pricing of bank loans using the net selling price of a property – remains an overhang on the market.

“The sector’s fundamentals are intact, but in terms of share prices, the catalysts are lacking,” she said.
Property players have noticed a marked slowdown in sales since the various curbs were put in place, although it is unclear by how much.

A number of high-end launches were also shelved, as developers switch their focus to the affordable segment of the market, where demand is more resilient.

Some of the projects launched post-Budget 2014 include block B of YTL Land & Development Bhd’s Fennel@Sentul East condominiums, which saw a take-up of 80% soon after it was opened for sale in mid-November, while tower A and B of Sunway Bhd’s Geo Residences were 85% sold within two weeks, HwangDBS Vickers Research noted.

In Iskandar Malaysia, however, the response to UEM Sunrise Bhd’s Almas Suites and WCT Holdings Bhd’s Medini Signature Tower 2 have been lukewarm, Maybank Research said in a report last week.

The brokerage’s only “buy” call is Glomac Bhd, even though the firm has cut its own sales target for the year ending April 30, 2014 by 18%.

CIMB Research is more upbeat. It expects buying interest to return in the first half of this year, albeit gradually, when potential homeowners realise that prices are unlikely to fall, and that inflationary pressure from the impending goods and services tax, along with other subsidy cuts, leads to higher prices.

“As these macro prudential and policy measures are meant to curb speculation and not restrain genuine demand, the impact (though negative in the short term) should be positive over the longer run because they should help to remove froth from some segments of the market.

“Also, affordability remains close to its highest ever. Robust sales by developers should provide impetus for a re-rating of property stocks,” the research house told clients earlier this month.

Hong Leong Investment Bank Research, which believes the market will stage a recovery in the second half of the year, advocates a buy-on-weakness strategy for shares amid trough valuations.

Contributed by John Loh The Star/Asia News Network

TPPA negotiations hot up in early 2014

Due to the United States political calendar and congressional politics, the TPPA negotiations will heat up the first few months of the new year. 

ONE of the major developments in the new year will be the negotiations and in fact the fate of the Trans Pacific Partnership Agreement (TPPA), which has stirred a lot of interest and controversy not only in Malaysia but also in the United States, whose government is its prime mover.

The first half of 2014 will be decisive because the US will hold mid-term congressional elections in November, and that nation’s attention will focus on that after mid-year.

Since free trade agreements are so controversial and in fact unpopular among the public in that country, the TPPA and other FTAs will be hard for the US president and his administration to champion near the election period.

This may explain why the US is in such a hurry to finish the TPPA negotiations as soon as possible. It had placed a deadline of end of 2013, but that has passed without success.
Indeed, the ministerial meeting in Singapore in the first half of December revealed many outstanding differences.

So, the negotiations will become even more intense in the next few months, with a possible ministerial meeting in February.

Malaysia is one of the significant countries that have raised several concerns about the proposals by the US.

Prime Minister Datuk Seri Najib Tun Razak himself, at a meeting in Bali last October, highlighted government procurement, state owned enterprises, investor-state dispute system and intellectual property as some of the issues that may infringe on sovereignty, implying that there should be careful consideration and caution during negotiations.

The US Trade Representative Michael Froman visited Malaysia a number of times to meet with some ministers and parliamentarians. He reportedly assured them of the United States’ understanding of Malaysia’s concerns, which he implied would be taken into account.

Malaysians are thus waiting to see how much flexibility will be given to accommodate the concerns of the public and the Government.

For instance, Malaysia formally proposed a comprehensive “carve-out” (exclusion from disciplines in the TPPA chapters) for tobacco control measures, a move that was advocated by health groups and the Health Ministry, and which has won warm congratulations from the public and media around the world, including in a New York Times editorial.

According to media reports, Malaysia has also opposed proposals for tight intellectual property rules that for instance extend the present terms for patents for medicines and asked for high thresholds for government procurement, and exemption for its bumiputra policies, while also challenging the proposed disciplines on state owned enterprises and the investor-state dispute system.

On goods market access, Malaysia will also find difficulties with the proposed ban on export duties. Recently the association of palm oil refining companies warned that their operations would be threatened if the TPPA forces the country to abolish its long-standing export tax on crude palm oil.

A ban would also cause the Government to lose around RM2bil annually in revenue, which would be a serious blow to efforts to reduce the budget deficit.

The question is whether Malaysia’s demands will be met. Even if compromise or flexibility is offered, it is crucial to examine how genuine or adequate they are. Often, the only “flexibility” is a longer period granted to implement the specific rule in question. That is not really much use.

Even if an exemption is given, it may be limited or useless. For example, in an early version of the investment chapter, available on the Internet, there is a clause that nothing in the chapter prevents the countries from undertaking health and environmental policies. But it also says provided those policies are consistent with the chapter, thereby negating the apparent space provided for exclusion.

Thus the devil is really in the details, as the saying goes. And the details have to be carefully scrutinised, because it is an old negotiating tactic to show a spirit of understanding and compromise politically but remain steadfast and uncompromising in the legal texts, and it is the latter that counts.

Another key point is that the US negotiators and government have little room to provide compromises, even if they want to. That is because it is the congress that has the real power over trade matters, including the TPPA.

Last week, some members of Congress introduced a Bill to provide the US President with fast-track authority, which means that a trade agreement like the TPPA can only be adopted or rejected by congress, but cannot be amended by it.

Without this fast-track authority, there is no confidence among other countries that what the US negotiators agree to or sign will be agreed to by congress, which can reject certain parts of the TPPA and demand changes.

As a condition for giving the fast-track authority, advocates are asking the US government to take a strong stand on issues.

This puts pressure on the US negotiators not to compromise, even if they wanted to.

For example, the Bill says that on state owned enterprises the US should seek commitments that eliminate unfair competition favouring SOEs doing commercial activity and ensure that their practices are based solely on commercial considerations.

Government policies and the SOE practices would have to abide by eliminating discrimination and market-distorting subsidies.

The US is already proposing that SOEs cannot discriminate when they buy and sell goods and services, and that they cannot receive any advantages such as cheaper loans or land and business from the government.

This would, for instance, imply SOEs being prohibited from giving preferences for bumiputra companies in their procurement.

If the definition of SOEs also include private companies in which government agencies have a share, the net will be cast very wide.

It is however still unlikely that the proposed Bill will pass, as many Democrats are opposed to fast track and some Republicans just don’t want to give President Obama anything he wants.

But here’s the problem. If fast track is given with the conditions attached, the US negotiators will have to abide by them and can’t show required flexibilities. If there is no fast track, the proposed texts agreed to by the US can more easily be rejected by congress.

Either way, there is only so much the negotiators can give in response to demands made by Malaysia or other countries, and even then the compromises can be rejected by congress.

Which goes to show how difficult FTAs are to negotiate or conclude when the US is involved, for commerce and politics are all mixed up in the pot.

Global Trends by Martin Khor

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2. Looming danger on contrast and competition of economic models
3. An eventful week on the TPPA
4. TPP affecting health policies?
5. ASEAN plans world's largest trading bloc in Asia, RCEP ...