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THE TRANS-PACIFIC PARTNERSHIP AGREEMENT... SOME HIGHLIGHTS

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INTRODUCTION The Trans-Pacific Partnership Agreement ("TPPA") was finalised on 5 October 2015, after several years of negotiations. It contains 30 chapters, addressing both trade and traderelated issues.

There are twelve participating countries to the TPPA, namely, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam ("the TPP members").

The Malaysian Parliament approved the motion for Malaysia to participate in the TPPA, and the signing ceremony was held on 4 February 2016 in Auckland, New Zealand. The domestic ratification process in Malaysia involves 26 amendments to 17 laws which may be finalised by the end of 2016.

THE OBJECTIVES The objectives of the TPPA are to continue the trade and investment liberalisation efforts undertaken through the World Trade Organisation and Free Trade Agreement initiatives of each TPP member country in the region, to develop transparent and predictable rules and disciplines with adequate recourse in the event of any dispute, as well as to develop a more transparent and inclusive regulatory environment which allows all relevant parties to engage in a meaningful and constructive manner on matters of significant economic impact.

THE FEATURES The TPPA has five defining features, namely, (a) comprehensive market access; (b) regional approach to commitments; (c) addressing new trade challenges; (d) trade inclusive; and (e) creation of a platform for regional integration.

THE HIGHLIGHTS The following are several highlights of the TPPA:

Labour Laws The signatory to the TPPA will adhere to the rights stated in the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work and its Follow-Up (1998), which is reflected in article 19.3.1 of the TPPA. This commitment envisages the incorporation and recognition of freedom of association and right to collective bargaining, abolition of all forms of forced labour including child labour, and the elimination of employment discrimination.

Several labour-related laws will have to be amended to conform to such commitment, and these include the Trade Unions Act 1959, Industrial Relations Act 1967, Employment Act 1955, Sabah Labour Ordinance (Chapter 67), Sarawak Labour Ordinance (Chapter 76), Private Employment Agencies Act 1981, Workers’ Minimum Standards of Housing and Amenities Act 1990, and the Children and Young Persons (Employment) Act 1966.

A notable change in the TPPA is the allowance of the formation of trade unions for workers that may lead to an increase in industrial action due to the wider scope of union memberships and the removal of current restrictions imposed on collective bargaining. Limitation on the rights to strike is also only imposed on nine essential services under the TPPA compared to the 18 activities currently listed in the First Schedule to the Industrial Relations Act 1967. An issue however is the extension of labour rights to foreign workers and their right to hold office in a union.

ISDS The Investor-State Dispute Settlement ("ISDS") allows investors to pursue international arbitration against a host country for violating its obligations upon a breach of investor protections where an amicable settlement cannot be reached. The fear of the ISDS is that it may empower foreign corporations to ignore and override Malaysia’s judicial, legal, and parliamentary systems, its Federal Constitution, and historical federal-state division of powers that Malaysia has developed over the decades.

However, the ISDS is not foreign to Malaysia as such provisions may be found in various Bilateral Investment Treaties (BITs) and Free Trade Agreements (FTAs) signed by Malaysia. In fact, there are carve-outs on government policies relating to public health, safety and environmental pollution in relation to ISDS under the TPPA. The Central Bank of Malaysia also retains complete autonomy in dealings with the Malaysian ringgit, foreign exchange reserves and capital controls.

Intellectual Property The Intellectual Property Chapter of the TPPA provides protection to patents, trademarks, copyrights, industrial designs, geographical indications and other forms of intellectual property based on international agreement practices.

In contrast to Malaysian laws which provide for copyright protection for up to 50 years after the author’s death, the TPPA provides a longer copyright protection term which is the life of the author and 70 years after the author’s death.

Data exclusivity One of the issues raised under the TPPA is the duration of data and marketing exclusivity. Presently, data exclusivity granted in Malaysia for new drug products containing a new chemical entity is five years, whilst the period of data exclusivity for a registered drug product is three years. However, this is given only to data concerning a second indication of a registered drug product. There is no exclusivity period granted to other types of drugs or drugs-related products.

Under the TPPA, exclusivity is extended to both data and marketing exclusivity. The TPPA has also identified various classes of products and each class is granted different protection periods. For new pharmaceutical products, the period of data and marketing exclusivity is at least five years. For new biologics, the data exclusivity period shall be at least eight years while the marketing exclusivity shall be a minimum of five years. The provisions on data and marketing exclusivity may affect the availability of generic drugs as well as marketing costs which may compromise the interest and benefit of the consumers.

CONCLUSION While the TPPA remains controversial in the eyes of many who claim that the agenda is to promote only the United States whilst disenfranchising China, others swear that it will benefit even the developing countries. Only time will tell, one way or another, as the TPPA was signed only on 4 February 2016.

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