Free Trade Agreements and ICT Industry

FTA signing with the US could literally wipe out our domestic industry in a few years. Lock up the market, send your little sister to jail and prevent any alternatives such as FOSS by suing your small startup company to through Patent infringements.

FTA discussions take place over several months (even years). So why do they come up at the last minute?

ICT and how such issues as copyrights and software patents are not familiar with the general public. We're using proprietary software anyways, so we're not losing anything on this point are we?

So it gets railroaded as negotiators feel that it's an acceptable compromise and shouldn't hold up the long process in order for the FTA to be signed.

To put in perpsective, FTA's are comprehensive, they cover a wide range of issues:

Scope of FTAs all encompassing
(in a nutshell they want to get market access to domestic markets via)

• Market Access for Goods
• Agriculture
• Cross-Border Services
• Financial Services
• Intellectual Property Rights
• Investment
• Government Procurement - Malaysia does not include/allow FTAs with these clause.
• Competition Policy
• Labor
• Environment
• Sanitary and Phytosanitary Measures
• Health/Environmental concerns eg. Mad Cow Disease
• Technical Barriers to Trade
• Trade Facilitation
• Transparency
• Increase transparency from developing governments
• Customs Administration
• Dispute Settlement Mechanisms
• Right of foreign companies to sue governments

(Source: Sanya Reid, TWN)

E-Commerce

You think you want to setup an e-commerce site because the Internet is an open place? Think again:
http://webshop.ffii.org/

http://kedaicd.com - Our friend Kedai-CD would be taken down, as will many other startup e-commerce websites

Local Resellers

Currently most of the profits made in Malaysia for proprietary softare, is similar to a pyramid scheme. Companies make money by being the exclusive retailer/distributer of some imported proprietary software product. They get a fat 30% or so profit margin, and then their resellers and distributers get a few more percentage points more. No real value is being created in the industry, it's similar to a pyramid scheme, because in IT.. you can just download software, you do not necessarily need a truck like you ship durians to markets.

Now what happens to these resellers?

Note market access for goods and competition policy. This will remove the exclusive distribution channels, local companies has set up. Proprietary software companies can set up their own distribution channels and make you irrelevant. This is a form of increased "investment" in services. The Malaysian government gladly welcomes this investment, will you?

Local Software Market

If you think that your 3 patents is going to offer protection, think again.  The local software industry which is quite new, will not be able to afford the millions of dollars in dealing with legal issues of patents. When you have 3, and they have 50 patents related to your product, your only option is to license theirs, but only for as long as they are willing to tolerate your company.

Wait.. let's switch to FOSS? Yeah.. Software Freedom!

Don't think they have covered their bases? Software patents, will be used to prevent usage of FOSS.

http://www.no-lobbyists-as-such.com/florian-mueller-blog/ballmer-linux/

Most, software is pirated lah...

FTA Intellectual Property Rights also includes stronger enforcement of copyright and IPR (cough) not just patents. Investment protection (Under Investment) means, that the Malaysian government will have to pay for what these companies *think* they're losing from their investments. Great, they wipe out your local software industry through their investments and then make you pay more for not buying their products with made up numbers.

Not wanting to lose money, the Malaysian government will then be pressured to make a civil issue (copyright infringement) a criminal one. And you'll see people start going to jail for failing to comply with copyright infringements which may include ridiculous licensing restrictions.

ICT and software involves everything you do these days. ATM machines,  point of sale terminals and inventory management, multimedia editing, banks, electricity, airports and day to day office productivity such as spreadsheets and your company website.

The FTA agreement with the US will essentially put the soverignity of our country in the hands of a few monopolistic (and evil) US corporations, give them increased protection and wipe out our nascent software industry.

There is a lot of reading and research to do, to help counter these issues and protect our local ICT market.

If you would like to help, please contact me at khairil.yusof |at| gmail.com