Malaysia

The Trans-Pacific Partnership Agreement (the TPPA) is a multilateral free trade agreement which aims to further liberalise the economies of the Asia-Pacific region.

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

Introduction: The TPPA was finalised on October 5, 2015 after several years of negotiations. It contains 30 chapters, addressing both trade and trade-related issues.

The Malaysian parliament approved the motion for Malaysia to participate in the TPPA, and the signing ceremony was held on February 4, 2016 in Auckland, New Zealand. The domestic ratification process in Malaysia involves 26 amendments to 17 laws that will now have to be tabled in parliament within 24 months of such date.

The features: The TPPA has five defining features, namely: comprehensive market access; regional approach to commitments; addressing new trade challenges; trade-inclusive; and creation of a platform for regional integration.
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 form of forced labour including child labour, and elimination of employment discrimination.

Specific 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 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 is a carve-out on policies pertaining 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 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 in Malaysia granted 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 drug-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 a different protection period. 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 impact the availability of generic drugs as well as marketing costs, which may compromise the interest and benefit of the consumers.

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