US sours on its own secretive trade shocker

ScreenHunter_698 Dec. 12 08.32

By Leith van Onselen

I have warned repeatedly about the risks posed to Australia’s sovereignty and consumer welfare from the Trans-Pacific Partnership (TPP) – the proposed regional trade deal between 12 Pacific Rim countries, including Australia.

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. 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 support for the TPP provided Australia gains significant access to agricultural markets, labeling the agreement as a “platform for 21st-century trade rules”.

Yet, warnings about the deleterious implications of the TPP have been voiced across the globe.

Nobel Prize winning economist Joseph Stiglitz, recently posted an open letter questioning negotiators’ secrecy and warning 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”.

And now, the New York Times has reported that the US Congress and trade experts are alarmed at the secrecy surrounding the TPP and the manner in which the deal has been hijacked by US pharmaceutical and digital interests, risking dangerous outcomes:

Members of Congress on both sides of the aisle have voiced anger over their limited access to negotiation proceedings…

“The majority of Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations – like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America – are being consulted and made privy to details of the agreement. As the Office of the USTR [U.S. Trade Representative] will tell you, the President gives it broad power to keep information about the trade policies it advances and negotiates secret. Let me tell you, the USTR is making full use of this authority.”

That same month, Issa, chairman of the House Oversight Committee, unilaterally released what had been the administration’s secret position on intellectual property rights, one of the most contentious subjects under negotiation. Issa wrote:

“At a time when the American people and Internet users all around the world are rightfully wary of any closed-door negotiations that could adversely impact their ability to freely and openly access the Internet, the Obama Administration continues to pursue a secretive, closed-door negotiating process for the Trans Pacific Partnership…

[International Trade expert, Jagdish] Bhagwati described the procedures governing the TPP negotiations as “ludicrous,” noting that the secrecy surrounding the talks makes it difficult for the administration to win critically important congressional approval of voting on the TPP under special (“fast track”) rules barring any amendments or filibusters…

The Electronic Frontier Foundation, a leading nonprofit advocate of open access on the Internet, argues that under a cloak of secrecy, the TPP …”puts at risk some of the most fundamental rights that enable access to knowledge for the world’s citizens”…

Oregon senator sent an email response to my inquiry:

“Right now, because of the shroud of secrecy, it is impossible for the public to be informed of what’s at stake in potential trade deals like the TPP. This secrecy and lack of informed public input makes it difficult for Congress to oversee and direct trade negotiations”…

These agreements go well beyond traditional market access issues of tariffs and quotas to become de facto industrial policies…

[The TPP] reflects a larger shift in the balance of power. As multinational or “stateless” capital diminishes the sovereignty of individual countries, including the United States, and strengthens the autonomy of international corporations, it weakens the already fragile economic security of millions of out-of-work Americans. Their plight appears to be unheeded in the world of “advisory committees.” One can only fear what comes next.

Clearly, the whole process surrounding the TPP is overly opaque. As a bare minimum, the text of the TPP should be released for public and parliamentary scrutiny before it is ratified.

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Unconventional Economist


  1. Thank you Thank you Thank you! This shocker does indeed needs the kind of sterilization only sunlight can bring.

    Robb’s “platform for 21st century trade” is pure repression!! FU Robb curl up inside Ruperts sphincter die.

  2. All politicians who have supported this and the way its been conducted need to be removed.It proves they are hostage to business and not representatives. The media, bloggers, commentators and others must pressure these weasels to resign – on both sides of the Pacific.

  3. General Disarray

    Interested Party wrote to his minister and confirmed the details will be released before it gets signed, but there won’t be a huge amount of time to scrutinise or run a campaign against it.

    For an agreement of this importance it should be made public for at least 3 months before any decision is made, IMO.

  4. Release prior to approval (DFAT)

    The TPP Agreement must go through the same democratic processes as other treaties that the Australian Government considers. Once the parties agree on the final text of the TPP Agreement, the Government will make the agreement available publicly and open to scrutiny before the Parliament considers passing it into law. After Ministers table the final TPP text in the Parliament, the Parliament’s Joint Standing Committee on Treaties will coordinate a public review of the agreement. The Committee can then invite submissions and evidence at public hearings, to help determine whether it should recommend to Parliament that the TPP be ratified. More information on the treaty making process can be found on the DFAT Treaties page.

    • …and, as with any bureaucracy or corpora-tocracy, there is often a difference between said process being followed, and said process actually being of siginficance (ie. it’s called box-ticking)…

      I must express some concern about this TPP and the likelihood that we will be further subverted to the wills of foreign powers (ie. further along the road to serfdom/peonage).

      My 2c

      • Apparently the Aust. Farmers Federation president has endorsed Aust signing this TTP. Access to US agricultural markets being the reason.

        Salt of the earth, but myopic thinkers these farmers. Do they really think that the influential US farm lobby will share.????

        The current US farm bill ( subsidy ) is US$643 million. They will happily put a 1 in front of that to protect US interests.

  5. I sent andrew robb an email asking how this benefits australia and told him i didnt want it.

    He didnt bother Replying

  6. The people protesting the TPP aren’t using the right approach…no one powerful cares about the price of australia’s medicine or digital goods.

    To really get some lobbies excited, we should start rumours that it opens up US agricultural markets to asian and australian produce, sugar, grain etc, rumours of Australian sugar lobby twisting the american’s arms and cheap meat chicken from malaysia and so on…then sit back and watch the US farm lobby swoop like a hawk and peck the eyes out of the USTR!

  7. I would not get too excited over this idea that there are objections from the US congress. Most of this is likely to turn out to be anti obama sentiment fanned by the right wing press and tea party douche bags. If it was a white republican president i doubt you would have heard much of anything from congress.

    The best you can hope for here is that the American farm lobby is resistant and influential enough to have access to the their markets taken out of the agreement and that causes a loss of enthusiasm on the part of our political traitors who are so willing to sell out this country to the highest bidder. But even then don’t hold your breath.

    Abbot is only looking out for his career after politics, a position on the board of several multinationals as a reward for his hard work in selling us out. His and the right wing hawks enthusiasm for this agreement will not be diminished.

    He sees no problem in kowtowing to the pharmaceuticals because he dosnt give a toss about poor people and its too bad if they cant afford private health cover. As long as he and his family are in the money its all good.

    As far as digital rights are concerned this man is firmly stuck in the 70’s. When you mention digital rights to him he is thinking of a VHS tape. When you mention the internet he is thinking you want to down load porn. He is of such a fundamentally different mindset and generation none of this means anything to him and he does not simply care. What is it to him if your isp details are given up to the MPA and you are prosecuted for downloading an episode of GOT. So he is quite happy to go along with murdochs aim to close off access to internet media and provide corporations with captive markets that must use thier overpriced and limited services.

    Compare all the stupid decisions of this govt to the previous. Where is the media outrage ? where is the affected uproar from the media ? Where has it gone. It isnt there anymore because he is doing what murdoch has told him to do.

    • Most of this is likely to turn out to be anti obama sentiment fanned by the right wing press and tea party douche bags.

      I wouldn’t be so certain about that.

      Senate Majority Leader Harry Reid said he opposes legislation to speed approval of trade deals, rejecting a top goal of U.S. exporters a day after President Barack Obama called for it in his State of the Union address.

      But this week, about 151 House Democrats and 23 Republicans—many of them tea partiers—wrote letters to the administration saying this time they are unwilling to give the president carte blanche to “diplomatically legislate.” If a couple dozen more lawmakers join the unlikely group of Dems and GOPers, the House could have enough votes to shoot down fast-track and derail the TPP. If Obama doesn’t get the special trade powers, Congress will likely try to make some changes to the final pact, which could cause other countries to drop out of the deal.

  8. Time for an ABC four corners report on this treaty and the Investor-State Dispute Settlement (ISDS) clause.

    Where is our ABC when we need them?

    And the Rheinhart press could do a Saturday news Review and an AFR liftout guide.

  9. Keep raising the profile of this important issue, MB.

    The TPP is a horrid attempt to take away Australian sovereignty and extend power of large corporates.

  10. notsofastMEMBER

    The question I have is how will this revive the intellectual property and patent laws the developed world used to have and respect? An essential part of these countries wealth creation process. Because without these laws to protect people who invest and create new products there will be very few people to do this. Why do this, laden yourself with debt, when someone else in another country can turn around the next day, copy your product and sell it a lower price. And whats more the someone else in the other country can do this with the full resources of their countries government, more or less, at their disposal.

    The TPP is about creating a trade block that respects intellectual property rights, but what about countries outside the trade block just coming along and stealing what ever IP the countries inside the TPP create?

    I can’t see how it will work to the benefit of the countries inside the TPP. Any decent IP or patents will just be lifted by those outside the block.

    Another question I have is, what will our countries legal system do when our people steals some other countries intellectual property from outside the TPP? And if our countries legal system does nothing, as it should give serious consideration too, how will other countries react? Or is it just another case of one rule for us, another rule for everybody else?

    Unfortunately, in the case of IP and Patents I don’t think trade blocks will work. We are in a globalised world and I believe it is either the majority of countries in who be able to sanction countries who don’t comply with IP and Patent rules or it is anything goes with the very serious consequences that will flow from this.

    • IMHO anyone that advocates an “internationalization” of US patents should be compelled to spend at least one week sitting in the “Rocket Docket” court room in Marshal Texas.

      This is where many of the most outrageous patent cases get litigated, If you’re having trouble finding the town try looking about 100 miles NE of Dallas. Yea that’s right Hicksville with a capital H.

      If you have any technology knowledge, at all, you’ll quickly realize that the fundamental idea underlying the patent is the last thing of concern, its multibillion dollar legal game where in 9 out of every 10 instances stupidity wins (only the lawyers better that with a win in 10 out of 10 cases)

      Technically Strong fundamental patents usually make weak legal patent material, if for no other reason than the hicks on the Jury are clueless (remember its Marshal Tx). I’ve looked over at the Jury during the most compelling stage of evidence where the finer points of why this patent is novel are being discussed. In one case Two jurors were playing naughts and crosses, one was completely asleep…snoring, no less than three had their eyes shut, good luck understanding the power-points….

      It’s a complete joke, yet for some reason there is an expectation that these decisions made in Marshal Tx should constitute some sort of legal basis for world wide patent protection, WHY whats in it for me?…what ever happened to the notion of Sovereignty!

      • I’m still laughing at the original comment claiming that patent laws and IP protection have been weakened recently and need to be revived.

      • notsofastMEMBER


        I was arguing that protecting IP and patent rights in small trade blocks like the TPP makes no sense in a globalised world. I wasn’t advocating to use the US system nor the US legal system which I wouldn’t touch with a barge pole, if it could be avoided.

      • notsofastMEMBER


        I would argue that the IP and Patent system in the developed countries was one of the main reasons (amongst many others) the developed countries got ahead and stayed ahead of other countries around the world. But since the end of the cold war the system has been pretty much in decline with perhaps the biggest torpedo coming when China was admitted to the WTO in 2001 without, what appears as, due consideration of its impact on the developed worlds IP and Patent system.

        As I said above, if the world can’t implement a system to emulate this then the world loses a significant engine for product development and it sends the world more in the direction of product technical stagnation than otherwise.

      • @notsofast
        I believe the current national patent systems in most of the world are fundamentally broken beyond repair. We need a new international patent system probably best based on the European which has at least maintained a little respectability.

        We probably need a 10 year transition period in during which ALL patents need to be reapplied for and technically judged by strong professionals, the old German patent system whereby companies keep each other honest is probably the best basis for anything new.

        Business process and similar patents should be simply banned

      • notsofastMEMBER


        I agree with your comment. German systems are very good and would be a good starting point. But I also think they are so often very good because…

        they have so many German people involved.

        I won’t try to describe what is about German professionals in my experience, but I suspect if we start putting a significant number of non-Germans into the system of varying nationalities, with different world views, we might be sorely disappointed with the outcomes. No matter how good the underlying system it could quickly denigrate into something resembling the United Nations.

        Having said this I think the world has to try something.

      • I would argue that the IP and Patent system in the developed countries was one of the main reasons (amongst many others) the developed countries got ahead and stayed ahead of other countries around the world.

        I would argue that IP and patent protection is used largely to stay ahead of others, rather than to get ahead in the first place.

        At the moment China sees its advantage lies with not respecting IP and patents but that will likely change as it works its way up the developmental ladder.

        Let’s not forget that one of the strongest backers of increased IP protection is Hollywood, originally established by IP pirates fleeing New York and Edison’s patents.

      • notsofastMEMBER


        But what happens when China finds other countries lifting its companies technology?

        And what happens when other countries use their military and governments intelligence apparatus against Chinese Businesses to gain an advantage for their businesses?