Source: Free Malaysia Today
Wed, 23 Jun 2010 15:41
By Syed Jaymal Zahiid
KUALA LUMPUR: The resuming bilateral Free Trade Agreement (FTA) talks between Malaysia and the European Union (EU) reflects a shift in the government procurement policy that could be detrimental to local businesses.
Government procurement was the sensitive issue that became the stumbling block in the failed initial talks between Asean and the EU but the revelation made by International Trade and Industry Minister Mustapha Mohamad in Parliament on Monday suggested otherwise.
Mustapha had said in a reply to Klang DAP parliamentarian Charles Santiago that Malaysia is prepared to study the viability of opening up its procurement policy.
“Even though the talks are still in the early stages, the meeting session between Malaysia and EU is the best avenue to study the readiness of the Malaysian government. But there have been vast changes between the current round of talks and the previous engagement.
“Malaysia now has a world-class intellectual property rights protection system while the Competition Policy is negotiable since the National Competition Bill has been passed,” said Mustapha.
Santiago contended that the language used by the minister was a far cry from the government’s position on the procurement policy when the first of round of talks collapsed.
“The government procurement policy and the intellectual property rights were the two contentious issues that caused the collapse of the first talks,” he told FMT in Parliament here.
“Now we are ready to talk again, meaning the government is ready to open up its procurement policy,” argued the first-term Klang MP.
Policy shift bad for local businesses
Santiago said any move to open up government procurement policies for fair competition is good for the economy but he warned that the shift may do more harm than good to local businesses.
Committing the government procurement policy under the FTA means opening up government contracts to foreign bidders and this may narrow the government’s “policy space”.
“In any country, you must allow some space for policy manoeuvring but if they open up the government procurement policy, it will lose its space,” said Santiago.
The Klang MP proposed that the policy be restricted to local businesses to spur domestic growth.
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