Vocal Free Trade Agreement (FTA) advocate, Alan Oxley, has delivered another Panglossian view of the Trans-Pacific Partnership (TPP), which he claims will “will open services markets and free up investment”. From The AFR:
Free trade and the Trans Pacific Partnership trade agreement has been roundly attacked, but mostly by groups that want to push their own agendas on regulation…
The agreement [TPP], like the recently-inked Asian Free Trade Agreements, aims to open markets for services industries for example – to finance, health and transport where Australian industry is strong. This will create opportunities for those businesses to expand in Asian Pacific services markets.
Yet the ACTU opposes the TPP. It also objects to disputes provisions which allow foreign investors to challenge failure by the government to implement commitments in the agreement not to restrict foreign investment in Australia. Has it lost the plot or does it think it is protecting some sort of right to strong arm foreign-owned businesses in Australia?…
The TPP Agreement is not yet complete. It will be some time before the details are finalised and available. And contrary to the standing complaint no one has been consulted, it is practice for the government to consult with industries whose interests are in play.
When I was a representative for the Australian Treasury on trade policy back in 2003-04, Alan Oxley was a key advocate of the Australia-US FTA (AUSFTA), arguing that it would liberalise trade and investment, and unleash billions of dollars of benefits for the Australian economy.
The reality, however, has never matched his rhetoric. A decade on, the results came in and found AUSFTA had delivered negative trade outcomes.
Australia also saw both patent and copyright terms extended under the AUSFTA, which has raised the cost of pharmaceuticals and copyrighted materials.
As noted by Peter Martin, the extension of pharmaceutical patents under the AUSFTA, from 14 years to 20 years, has “suppressed the development of a generic drugs industry and cost the government $200 million per year by slowing the entry of cheap generic drugs into the pharmaceutical benefits scheme”. Moreover, “generic manufacturers have missed out on an estimated $2 billion over eight years” whereas “70 per cent of drug patents expire later in Australia than in other countries”.
Market access to US agricultural markets was also heavily restricted under the AUSFTA, with large chunks of agriculture carved-out, draconian price-based safeguards protecting US horticulture (see Annex 3A), as well as complicated product ‘rules of origin’ numbering hundreds of pages.
The end result was anything but ‘free trade’, and yet Oxley continues pushing his Panglossian view of such agreements.
Oxley’s derision of those opposed to the TPP also exposes an ideological commitment to FTA’s over sound economics and the national interest.
WikiLeaks has released drafts of the intellectual property chapter of the TPP, 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, once again 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 could 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 threat to Australia’s sovereignty, since it could effectively limit the Government’s ability to form public policy and its ability to regulate in the public interest.
The US is also seeking to prevent circumvention of technology that restricts products to certain regions 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.
So rather than “open[ing] services markets and free[ing] up investment”, as argued by Oxley, the TPP would grant greater power to international multinational corporations, increasing their rents at the expense of Australian consumers and taxpayers.
There is nothing puerile about being opposed to the TPP. It poses great costs to Australia’s consumers, taxpayers, and our world-class health system by placing the interest of US pharmaceutical and digital companies ahead of our own.
One would have hoped Oxley had learned after backing the AUSFTA to the hilt, only to discover it was a dud. Now he is making the same mistakes all over again with the TPP.
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