Khazanah, Petronas mostly ‘exempted’ from TPP, says minister

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Source: The Malaysian Insider

Malaysian state fund Khazanah Nasional and state energy firm Petronas will be largely exempted from Trans-Pacific Partnership (TPP) regulations, as Malaysia is ready to allow some exceptions, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said today.

Malaysia was one of 12 nations that finalised the trade pact with the United States. The TPP aims to liberalise commerce across nations accounting for 40 percent of the world’s economy but still needs ratification by each country.

It was not immediately clear how Khazanah and Petronas would be exempted, or what exceptions might be made, with discussions to be held with company boards in coming days. Parliament will debate the TPP after it reconvenes on October 19.

Malaysia had earlier expressed concerns that TPP would undermine its right to manage state-owned enterprises (SOEs) and policies of preferential treatment for ethnic Malays and other indigenous people, known as bumiputra.

Mustapa said Malaysia had decided to revise its initial request for an absolute carve-out of Khazanah and Petronas from the deal and had sought a compromise.

“Whatever we discuss has to be in line with our socio-economic model, including the roles of state-owned enterprises,” Mustapa told reporters.

Khazanah and Petronas would now be subject to certain TPP disciplines, although the details had yet to be determined, he said. He did not elaborate.

Petronas, the country’s oil and gas producer, has rights over reserves under federal law. The company contributed a RM29 billion dividend to the government’s revenue in 2014.

Khazanah has a programme aimed at transforming state-linked firms to develop, among other things, human capital and the bumiputra community. – Reuters, October 7, 2015.