Listening to the commentary yesterday surrounding the Trans-Pacific Partnership (TPP) was hysterical.
According to Trade Minister Andrew Robb, who issued two media releases on the subject (here and here), the TPP “will establish a more seamless trade and investment environment across 12 countries which represent around 40 per cent of global GDP”, and will “eliminate 98 per cent of all tariffs”. In turn, the deal “will deliver enormous benefits to Australia” by opening a “new era of opportunities”, and will “drive jobs, growth and innovation for Australia”.
Prime Minister Malcolm Turnbull also chimed in, claiming the TPP “will be the foundation stone for Australia’s future prosperity”, whereas Dad’s Army’s Robert Gottliebsen typified the mainstream media’s assessment, arguing that Andrew Robb’s so-called free trade deals will “transform Australia”.
Sure, Andrew Robb might deserve praise for standing up to the US’ demands for longer monopoly periods for medicines, which would have made it easier for big pharmaceutical companies to get away with charging higher prices on medicines for longer, thus raising costs for the Pharmaceutical Benefits Scheme and Australians.
Reports also say that the final TPP agreement includes a carve-out that will prevent Big Tobacco companies from being able to sue governments over anti-smoking regulations in secret tribunals, as has occurred with Phillip Morris’ suing of Australia for its plain packaging cigarette scheme under an obscure agreement signed with Hong Kong in the early 1990s.
But, really, should we not be expecting the Government to defend these sovereign basics without fanfare? I mean, have we reached the point where not being reamed is cause for celebration?
The deeper problems lie with what we don’t know about the the TPP, which is a lot. The agreement is expected to number over 20 chapters and comprise possibly thousands of pages governing all manner of things like intellectual property rules, foreign investment, data collection, services regulation, the environment, etc.
None of the final signed chapters have been released to the public for scrutiny and they are not expected to be for several weeks. So all the public has to go on is the selective spin from governments whereby they cherry pick certain details and then tell us how great the deal will be.
It is this inherent secrecy surrounding the TPP that makes observers like me so skeptical. Take for example Australia’s win on data protection for biologic drugs, which it managed to keep to five years (Australia’s current regime). This has been hailed as a “compromise” with the US’ position for a longer period of protection. But what other compromises (if any) have been made and how will they impact on other areas of drug pricing and availability? We won’t know until the final text is released to the public.
The same goes for other patent and copyright protections embedded in the TPP. The draft intellectual property chapter, leaked by WikiLeaks a few years back, flagged the extension of patents for “new forms” of known substances, as well as on new uses on old medicines – an outcome that could lead to “evergreening”, whereby patents can be renewed continuously. It also contained clauses to prevent circumvention of technology that restricts products to certain regions – an outcome that would hand greater pricing power to copyright holders at the expense of consumers. Have these clauses been included in the final TPP text? Nobody knows.
In short, the public desperately needs to see the final TPP text to determine whether there are “ugly compromises” lurking in the agreement. Given its sheers size, and that powerful US interests were involved, I suspect there are some, if not many.
The sad truth is that Australia’s so-called free trade deals have generally over-promised and under-delivered. No better example can be found than the Australia-US FTA, which was a decade ago hailed as being a transformational agreement, but ended up being a complete and utter dog that extended patent and copyright protections to the detriment of Australian consumers.
If there are any upsides from the TPP, they are likely to be small and likely outweighed by the various gremlins buried in the text. For example, as noted today by the Lowy Institute’s Dr Leon Berkelmans, the “TPP further entrenches our IP law in international treaties” and will give “us less room to manoeuvre in the future”. And “this has caused grief in the past. Bipartisan reforms have been scuppered because they were in violation of the Australia-US Free Trade Agreement”.
Berkelmans believes “the downsides are uncertain and could be large, while the upsides are small” – a view shared by me.
In short, the champagne should be kept well and truly on ice until the full TPP text has been released to the public and fully scrutinised, including by the Productivity Commission. Only then will we know whether the deal is truly in Australia’s best interest.
