A consortium of Australian business groups have released a joint statement backing the Trans-Pacific Partnership (TPP) trade negotiations, and urging trade ministers to make a concerted push to conclude negotiations when they meet in Sydney on Friday. From The AFR:
The Business Council of Australia, American Chamber of Commerce Australian chapter and the US Chamber of Commerce issued a joint statement on Wednesday declaring the US-led Trans Pacific Partnership “key to creating jobs’’…
“A successful TPP will mean more jobs, higher wages, stronger growth, a higher standard of living and new economic opportunities for Australia and the region’’…
The business groups’ Panglossian view of the TPP – the proposed regional trade agreement between 12 Pacific Rim countries, including Australia – is curious given negotiations have been carried out in secret, with very few people, even within the negotiating countries’ governments, having access to the full text of the draft agreement.
Going by the chapters that have been leaked via WikiLeaks, the TPP would establish a US-style regulatory structure that would hand considerable power to US pharmaceutical and digital firms, limiting choice and raising prices for consumers in Australia.
In November 2013 and October 2014, WikiLeaks released drafts of the intellectual property chapter, which included a “Christmas wishlist” for pharmaceutical companies, including the proposal to extend patent protection and strengthen monopolies on clinical data. Most worryingly, the US is 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, forcing-up Australian consumers’ (and taxpayers’) pharmaceutical costs via reduced access to cheaper generic drugs and reduced rights for the Government to regulate medicine prices. Such a move also risks stifling innovation in the event that patent terms are extended too far.
The US has also sought to insert an Investor-State Dispute Settlement (ISDS) clause into the TPP, 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. It’s a huge threat to Australia’s sovereignty, since it would effectively limit the Government’s ability to form public policy and its ability to regulate in the public interest.
The US has also sought to prevent 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 rules banning parallel importation of goods made under authorisation in other countries, which would hand greater power to US content creators and push-up prices for consumers.
Rather than freeing-up trade and raising citizens’ welfare, as argued by the consortium of Australian business groups, the TPP would grant greater power to international multinational corporations, increasing their rents at the expense of consumers and taxpayers.
For this reason, several notable experts have voiced strong opposition to the TPP fearing that it represents grave risks for the global trading system and citizens of countries operating within it.
Former World Trade Organisation (WTO) director-general, Supachai Panitchpakdi, claims the TPP represents a step backwards to the days before the WTO when the US and Europe controlled the global trading system to the detriment of other economies.
Nobel Prize winning economist, Joseph Stiglitz, raised similar fears in an open letter posted late last year, whereby he questioned negotiators’ secrecy and warned about “grave risks on all sorts of topics” posed by the TPP, as well as claiming that it contains “many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible”.
Paul Krugman, another nobel prize winning economist and trade expert, has also slammed the TPP, noting that it would “increase the ability of certain corporations to assert control over intellectual property [including] drug patents and movie rights”. Krugman also claimed that “there isn’t a compelling case for this deal, from either a global or a national point of view”, and that the “economic case is weak, at best”, with “the push for T.P.P… weirdly out of touch with both economic and political reality”.
The motherhood statement from the consortium of Australian business groups only serves to gloss over the dangers lurking beneath the TPP, and should not be taken seriously.
