In the ongoing negotiations on the Trans-Pacific Partnership Agreement (TPPA), it is intended to incorporate public-Private Partnerships (PPPs) in the chapter on government procurement, thereby opening up mutual access to the PPP markets of the member states.

The Malaysian government has adopted a position to carve-out PPPs from its own commitments to the TPPA. The starting point of this position is that PPPs are not properly part of government procurement and involve special features which warrant their exclusion from the procurement chapter of the TPPA. This is reflected in the fact that PPPs are administered by a special unit in the Prime Minister’s Office, Unit Kerjasama Awam Swasta (UKAS), and not by the Procurement Unit of the Ministry of Finance.

Another factor is the fear of the dominance of foreign players in Malaysia’s PPP markets. Considering the importance of PPPs in Malaysia and the potential benefits of opening up PPP markets, the paper recommends the Malaysian government to avoid completely carving out the PPPs from the trade agreement. Instead, it recommends measures to be adopted that can enable Malaysia to: a) take advantage of the opportunities created by including PPPs in the agreement, and b) overcome the perceived harmful effects arising from their inclusion. The exemption measures proposed here should be kept minimum and for a transitional period only.