Malaysia blocks US trade shocker. Will we?

ScreenHunter_954 Jan. 22 10.33

By Leith van Onselen

The AFR has reported today how the Malaysian Government is pushing back on the Trans-Pacific Partnership (TPP) – the proposed regional trade deal between 12 Pacific Rim countries – citing concerns that it could harm its national sovereignty:

“You cannot rush into things. This is a very big trade pact, going beyond the conventional areas of tariffs. It’s natural that it’s taken quite some time” [Mustapa Mohamed, Malaysia’s International Trade and Industry Minister, said in an interview]…

“We cannot be pushing the TPP at the expense of our national interest and national agenda,” Mr Mustapa said.

The Malaysian trade minister’s cautious views contrast nicely against Australian trade minister, Andrew Robb, who 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”.

As noted previously, 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.

It’s a huge risk to Australia’s world class public health system, which risks 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 draft agreement also sought to place more restrictions on internet users by forcing ISPs to cooperate with copyright holders and terminating the accounts of repeat infringers. This is despite the High Court of Australia ruling that an ISPs inaction could not be taken as authorisation of a copyright infringement.

Finally, the US is 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, which would act to maintain higher prices (to the detriment of Australian consumers).

That the Coalition seems intent to cede Australia’s sovereignty in formulating national policy, as well as granting greater power to American pharmaceutical and digital interests, in exchange for increased agricultural access, is a huge worry. The rot began with the signing of the flawed Australia-US Free Trade Agreement by the Howard Government, which extended Australian copyright, and it appears that the Abbott Government wants to ‘finish the job’ by including ISDS processes, among other non-tariff measures.

While the Malaysians seem to understand the risks arising from the TPP, the Coalition is either oblivious or happy for Australia to become a US outpost.

It also highlights why, at a minimum, the text of the TPP (and other trade agreements) must be released for public and parliamentary scrutiny before they are signed by the Government. Otherwise, we risk being sold-out for short-term political gain rather than sound long-term decisions.

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Leith van Onselen
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  1. Soveriegnty means nothing to the free trade ideologues in Canberra. Useful idiot Robb will sign whatever they put in front of him.

    • General Disarray

      The Australian government goes weak in the knees every time the USA gives us a glance. We’re America’s Stepford wife.


    • Yeah I get a bit of a kick out of that.

      Government is bad, yet we’ll happily let someone else’s dictate to us.

    • dumb_non_economist

      My porn expert friend says it’s best to take it lying on your back rather than bending over. Oh, vaseline helps!

  2. General Disarray

    Perhaps we could outsource our trade ministry to Malaysia? At the moment it looks like we’d save some cash and get better outcomes for Australia.

  3. Whatever you think of Malaysia, it has always shown some guts in opposing the economic dictates of the US/Bretton Woods behemoth – and is none the worse for wear.

  4. This may be the greatest failure in Australia’s governing history once signed.

    Abbott is capable of singlehandedly destroying this nation.

    Inefficient & Costly Direct Action
    Productivity Destroying Maternity Leave Scheme
    ISDS and the TPP
    An NBN that is better suited to the prior decade than the next.
    A military campaign against a few thousand refugees/asylum seekers

    Every policy is only to the great detriment of our nation.

  5. Shouldn’t be too long before a US aircraft carrier is parked off Singapore on a routine mission:)

  6. Surely, nobody older than five believes the US farm lobby will seriously allow access to their agricultural industry. History should tell us that if the USA propose / wants anything it will be primarily for their best interest. Aust just might someday elect a govt. with that mindset.

  7. Very disappointing. Increased monopolies on trial data! Leave that crap in the US. You want to sell drugs, all trial data should be public. If it works like you say it does then you have nothing to worry about.

    And the region blocking rubbish, why would you sponsor anti competition policy. Unless you owe Uncle Rupert a favor?

  8. As we fiercely push away boat seekers, our sense of indentity in the world is more anchored in London and Washington than at any time, I believe in at least the last 30 years. This trade pact is a reflection of that. We dont have ASEAN like Malaysia has. Our sense of isolation will make this pact a formality. And I doubt the US will be playing anything but hardball behind the scenes. It knows our submarines are crocks. It knows our F18 fighter force is badly obselete, It knows we know China is getting stronger and stronger. I suspect this is a card the US will be playing. And on a cultural and emotional level, Australia’s relationship with the US is on a totally different level to Malaysia’s relationship with America. Interpreting this deal on a purely business basis, I believe, will only get you so far. With China, essentially it is just business. This is not the case with the Americans.