By Leith van Onselen

I have written previously about the risks posed to Australia’s sovereignty and consumer welfare from the Trans-Pacific Partnership (TPP).

If the TPP goes ahead, it will establish a US-style regional regulatory framework that meets the demands of major US export industries, including pharmaceutical and digital.

The draft chapter on intellectual property rights, revealed by WikiLeaks, included a “Christmas wishlist” for pharmaceutical companies, including the proposal to extend patent protection and strengthen monopolies on clinical data. As part of the deal, the US is reportedly seeking patents for “new forms” of known substances, as well as on new uses on old medicines – a proposal which would lead to “evergreening”, whereby patents can be renewed continuously.

The pact poses a huge risk to Australia’s world class public health system, which faces cost blowouts via reduced access to cheaper generic drugs and reduced rights for the government to regulate medicine prices. It also risks stifling innovation in the event that patent terms are extended too far.

The US is also seeking to insert an Investor-State Dispute Settlement (ISDS) clause into the agreement, which could give authority to major corporations to challenge laws made by governments in the national interest in international courts of arbitration. So effectively, US companies would be allowed to sue the Australian Government under international law – a move that is being pursued by Philip Morris against Australia on plain packaging and graphic warnings for cigarettes.

The US is also opposing a proposal that would allow the circumvention of technology that restricts products to certain regions, even though this was recommended by the Australian parliament’s Inquiry into IT Pricing, as well as opposing the parallel importation of goods made under authorisation in other countries – both of which would act to maintain higher prices (to the detriment of Australian consumers).

Australia’s Trade Minister, Andrew Robb, has signaled Australia’s unbridled support for the TPP provided Australia gains significant access to agricultural markets, even labeling the agreement as a “platform for 21st-century trade rules”.



Now it appears that the TPP is only months away from being closed after a senior US trade representative declared the that the deal was at the “endgame”, whilst a former trade negotiator for the US threatened that failure to land the TPP would have “grave consequences”:

In a bullish assessment, Wendy Cutler, the acting deputy US Trade Representative, told a conference on emerging Asia that the TPP “is going to be completed and it is going to set the economic architecture for the region”… Former US ambassador to Australia Jeff Bleich said that the TPP countries were “on the cusp of closing out the agreement”. He said it “would be one of the most significant world trade agreements in all of world history”. Like Australian officials, the Obama administration view the TPP as a significant new framework for rules-based engagement… Mr Johnson told the conference that a failure to land the TPP would “be very serious” and Andrew Stoler, a former trade negotiator in the US, agreed it would have “grave consequences”.

In a separate report, Business Council of Australia chief executive, Jennifer Westacott, welcomed the TPP, citing that it would improve market access to some of Australia’s biggest trading partners:

On the TPP, Ms Westacott said it was “in all our interests to see a speedy conclusion to the TPP negotiations” given that five of Australia’s top 10 trading partners were in the region. “It will serve as a platform for Australian business to access regional markets, and provides a regional architecture for more open markets, including the deepening of the trans-regional financial sector and capital markets,” Ms Westacott said. AI Group chief executive Innes Willox said the TPP had the potential to cover areas not so far addressed in existing FTAs, such as e-commerce and behind the border barriers.

Of course, any marginal gains to Australian business could be more than offset by losses to Australian taxpayers and consumers via potential blow-outs in the Pharmaceutical Benefits Scheme, legal costs arising from fighting law suits under the ISDS clause (not to mention loss of sovereignty in setting public policy), or higher costs for digital content.

It also highlights why the text of the TPP must be released for public and parliamentary scrutiny before the agreement is signed by the Government, so that all of the costs and benefits posed by the deal can be weighed-up. Otherwise, Australia risks being sold-out for short-term political gain rather than sound long-term decisions.

[email protected]

www.twitter.com/Leithvo