Does the EU-Malaysia FTA undermine government policy space to regulate?

Interview with Charles Santiago
29 November 2011

Charles Santiago, MP from Malaysia, discusses the dangers of EU-Malaysia FTA, particularly due to the inclusion of an investment protection chapter. 

After the Free Trade Agreement (FTA) negotiations with the ASEAN region were stalled, the EU launched negotiations for an FTA with Malaysia on 10 September 2010. Five negotiation rounds have taken place so far with a sixth round scheduled for 8-12 February 2012.

Within the ASEAN region, currently, the EU is pursuing negotiations for FTAs which include a chapter on investment protection with Singapore and Malaysia. Discussions are ongoing to also start negotiations with Indonesia, Thailand and Philippines.

The text of the new chapters on investment protection for Singapore, Canda and India reveals that an investor-state dispute settlement mechanism is a demand from the EU. These texts are the basis for other negotiations. Therefore, if signed, the agreements will allow investors to by-pass the domestic legal system and refers disputes to international arbitration.

In an interview with TNI, Charles Santiago discusses the dangers of EU FTAs, and in particular the inclusion of an investment protection chapter. In his capacity as lawmaker, he has warned the Malaysian government "Here in Parliament, we are making laws in the best interests of the nation. But these laws can be overturned by an international arbitration panel if judged as detrimental to investors".

Charles Santiago is Member of Parliament in Malaysia, Director of Monitoring Sustainability of Globalisation, Coordinator for Coalition Against Water Privatisation (CAWP) and member of the EU-ASEAN FTA campaign.