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To: Mr. Christopher J. Lafleur, Ambassador Of The United States To Malaysia

We are concerned Malaysian organizations and citizens have come together to express our opposition to the on going US-Malaysia Free Trade Agreement (FTA) negotiations.

The United States through its Deputy US Trade Representative Karan Bhatia last week (1/2/2007) warned that the failure of free-trade talks with Malaysia would send a message that the two countries were “not open for business” and that “It will drive investors elsewhere and create potential frustrations in the bilateral economic relationship.”

This is an intimidation and harassment by the United States to colonialise Malaysia through economic domination as Washington wants to conclude negotiations on the free trade agreement (FTA) by the end of March, in time to present the deal to Congress before the president’s fast-track Trade Promotion Authority expires on July 1.

Furthermore, statements by the US Congressmen to stop FTA talks with Malaysia as Malaysia has energy deals with Iran is an attempt to dictate Malaysia’s external and internal policies and relationships with other countries. This is a threat to the sovereignty of Malaysia as an independent nation.

We also understand that previous US FTA with other countries have had a negative impact on their agricultural and manufacturing sectors.

For example, in Senegal 1/3 of the manufacturing workers lost their jobs because of the lower tariff towards industrial product. In Chile, 8% of the workers lost their jobs for the same reason.

Based on existing US FTAs which are very similar, we expect the US will require Malaysia to lower all of its tariffs on US products, whether agricultural or manufactured.

As workers, we are worried by the New York Times report that three million of Mexico’s ten million farmers could not longer make a living from farming after NAFTA because of the flood of US subsidized corn when Mexico lowered its tariffs.

One-third of Malaysia’s industrial tariffs are still unbound, so the Malaysian Government can raise them to protect Malaysian jobs at any time. If these all have to be reduced to 0% and locked there, will US products pour in? The US National Association of Manufacturers estimates that the US will double its manufacturing exports to Malaysia in the first two years of MUFTA if it is signed. As industrial workers, we are concerned that this may mean that Malaysian factories in the affected sectors will be in trouble.

Besides that, US FTAs tend to provide excessive protection for multinational investors and their profits while being weak on labour rights. Unionists and the workers are worried that MUFTA would cause more workers to lose benefits such as health insurance.

This is because , since the 1970’s the Malaysian government has bowed to the pressure of  US Multinationals where a National Union for Electronic Workers is  not allowed due to pressure from the US Multinationals pressure. If before the FTA , the multinationals can dictate terms on the government what more now after the FTA is signed. It looks like the Malaysian government will be forced by US businesses to amend local labour law and deprive workers of their rights.

Furthermore, the European Union’s independent analysis of the impact of lowering tariffs in its FTA with North Africa found that the FTA would cause a significant rise in unemployment, a fall in wages and be bad for: poverty, hunger, education and health. Even in South Korea where another US FTA negotiations is going on, it has been estimated more than 100,000 people will lose their jobs when the US –Korea FTA comes into effect.

According to the United Nations’ International Labour Organization (ILO) paper on the NAFTA experience, Mexico’s real wages fell by 18% in the first three years of NAFTA before it was even fully implemented. Furthermore, only 15% of the increased investment inflows were invested in production and much of that had weak linkages to the domestic economy. This ‘hot money’ coming in suddenly left in 1995 and USFTAs  prevent capital controls which can stop this turning into a financial crisis like Malaysia experienced in 1997. The financial crisis of 1997-8 caused per capita income to fall 30% in Malaysia and unemployment rose.

The increase in unemployment in urban areas of Mexico has led to widespread social problems according to the ILO paper on NAFTA.

Of course workers also have to be able to afford the medicines they need and the school textbooks for their children. These are likely to become more expensive because of the longer intellectual property protection required in USFTAs.

We are aware of citizen’s protest around the world in relation to the US FTAs as has been the experience in Latin America and most recently in Thailand and Korea. We also know that in FTAs which have been concluded with the US, commitments by developing countries have gone far beyond their obligations in the World Trade Organisation. This is most unfair and unjust.

Because of these concerns, we demand  the US Government to immediately STOP ALL NEGOTIATIONS WITH THE MALAYSIAN GOVERNMENT ON THE MALAYSIA-USA FTA!

WE MALAYSIAN REJECT THE US FTA ALL TOGETHER!

This memorandum have been endorsed by :

1. Alaigal
2. Aliran Kesedaran Negara ( ALIRAN)
3. All Women Action Society (AWAM)
4. Angkatan Muda Keadilan
5. Centre for Independent Journalism
6. Community Development   Centre
7. Consumer Association of Penang
8. Democratic Action Party (DAP)
9. Food Not Bombs (FNB), KL
10. Gabungan Anak Muda & Pelajar, JERIT
11. Gabungan MAnsuhkan ISA (GMI)
12. Gabungan Pekerja Kilang & Kesatuan Sekerja, Bandar Baru Bangi
13. Gabungan Pekerja Kilang & Kesatuan Sekerja, Beranang
14. Gabungan Pekerja Kilang & Kesatuan Sekerja, JERIT
15. Gabungan Pekerja Kilang & Kesatuan Sekerja, Perak
16. Gabungan Peneroka Bandar & Perumahan, JERIT
17. Inter-varsity Council
18. Jaringan Rakyat Tertindas (JERIT)
19. Jawatankuasa Kebajikan Mahasiswa/I (JKMI)
20. Jawatankuasa Sokongan Masyarakat Ladang,JERIT
21. Jawatankuasa Bertindak Ladang Sungai Rinching
22. Jawatankuasa Ladang Semenyih
23.  Kesatuan Guppy Plastic Sdn Bhd
24. KL & Selangor Chinese Assembly Hall Youth Section
25. Kumpulan Kemajuan Masyarakat
26. Malaysia Youth and Students Democratic Movement (DEMA)
27. Malaysian Treatment Access & Advocacy Group (MTAAG+)
28. Monitoring Sustainability of Globalisation
29. Panggau (Sarawak)
30. Parti Islam Semalaysia (PAS)
31. Parti Keadilan Rakyat (PKR)
32. Parti Rakyat Malaysia (PRM)
33. Parti Sosialis Malaysia (PSM)
34. Pemuda Sosialis
35. Pusat Komunikasi Masyarakat (KOMAS)
36. Sadia (Sarawak)
37. Sahabat Alam Malaysia
38. Sisters In Islam (SIS)
39. Solidariti Mahasiswa Malaysia (SMM)
40. Suara Rakyat Malaysia (SUARAM)
41. Suara Warga Pertiwi
42. Third World Network

Prepared by: PEOPLE’S COALITION AGAINST MALAYSIA-US FTA
22A, Jalan Vivekananda, Brickfields 50470 Kuala Lumpur, Malaysia.