Australia gets ready to bend over for the US – again

After being in force for seven years, the free trade agreement Australia has with the US has yielded the former little benefit. The US has been the net beneficiary – last financial year imports from the US totalled $26 billion while exports were $9 billion. [1]

The figures for 2004-05 were $21.4 billion and $9.2 billion respectively.

Given this, one would naturally conclude Australia would be wary of further deals that would expose it to being taken advantage of by the US.

Surprisingly, such is not the case. Since March 2010, Australia has been talking to the US and seven other countries about a deal known as the Trans Pacific Partnership Agreement (TPPA), one that was supposed to be finalised in Peru in the week ended October 28. President Barack Obama is expected to announce a framework for the deal at the forthcoming APEC summit in Honolulu.

The talks have been held in secret and there has been practically no coverage in the mainstream media. The seven other countries involved are Chile, Vietnam, Malaysia, Singapore, New Zealand, Brunei and Peru.

But, despite US efforts to maintain secrecy, there have been leaks: in February, the draft text of the IP section of the TPPA was leaked online to an organisation known as Knowledge Ecology International.

And just before the talks in Peru, more documents were leaked to the Citizens Trade Campaign, an US advocacy group.

According to the leaked documents, one of the chief aims of the TPPA is to empower big drug companies to attack schemes such as Australia’s Pharmaceutical Benefits Scheme (PBS) and New Zealand’s Pharmaceutical Management Agency (PHARMAC) that provide citizens of these countries with lower-priced drugs.

If the proposals made by the US are accepted, it would mean greater restrictions on generic competition and rising medicine costs for the Asia-Pacific region.

The federal government has indicated it may accede to US proposals: back in 2010 — the first round was held in Canberra — the Australian ambassador to the US, Kim Beazley, was quoted as telling a US hearing that “everything” was on the table. Australian Trade Minister Simon Crean has reportedly said the same thing.

The leaked draft includes a proposal to lengthen and create new pharmaceutical monopolies, grant additional exclusive controls over clinical trial data and eliminate safeguards against the abuse of patients.

The US proposal seeks to ramp up second-use patents for minor variations on known drugs and any new uses of these medicines.

There is also a proposal to increase drug monopolies by patent term adjustments that will delay the bringing to market of generic equivalents of drugs; this will mean higher prices for patients.

The US wants to remove any safeguards against the abuse of patents and prevent third parties from challenging patent applications. It wants to extend the control over clinical trial data, providing an extra three years of data exclusivity for new uses of existing products.

This is in addition to five years for first uses of the same product.

Recent events have indicated that the federal government is moving to soften the public to the changes that will come with the TPPA – after all, Australia’s only response when told “jump” by the US, has generally been to respond “how high?”

For one, the idea of changes in the Medicare system has been floated recently; in the last week of October Health Minister Nicola Roxon floated the idea of a revamp of the $17 billion system.

Apart from the impact in the IP area, the TPPA also seeks to make it easier for foreign companies to control the conditions for investment; such clauses exist in the North American Free Trade Agreement (NAFTA).

In the 1990s, when Canada mooted the idea of plain paper packaging for cigarettes, it was threatened with legal action by Philip Morris. Any such action would have been judged by an international body, and not Canada’s judicial system as this is specified by NAFTA. The result was that Ottawa backed down.

Australia is contemplating a similar move by July next year and has been threatened with legal action by Philip Morris; the government recently said that it would delay the adoption of plain paper packaging until December next year.

If, as seems likely, the TPPA is finalised by then, Philip Morris would have a much better chance of winning its case because it would no longer be judged by the Australian judicial system but by an external tribunal.

In effect, what this does is compromise the sovereignty of a country to make its own laws.

The IP draft of the TPPA contains some scary proposals. Draconian measures are proposed to apply to ISPs. Laws will have to be put in place to require ISPs to co-operate with copyright owners in preventing unauthorised storage and transmission of copyrighted materials.

Legal liability for ISPs will extend beyond the provisions of the US Digital Millennium Copyright Act. Internet users will, by law, have to be identified by an ISP if copyright owners have given “effective notification of claimed infringement”.

There is also a proposal to extend the copyright period to a minimum of 95 years from creation of a work to a maximum of 120 years. Parallel trade in any copyrighted goods is ruled out altogether in the draft.

There is no indication that the Labor government will oppose the US on any front. Indeed, when the US free trade agreement was negotiated in 2004, the prime minister John Howard thought he would get some sweeteners from the US because of his close relationship with George W. Bush. But Australia got nothing. The present government has nothing like the relationship that Howard had with Bush; its chances of getting something from the TPPA are even more remote.

As the US moves into its election cycle, campaign donations assume even more importance. Media and drug companies are big donors and have to be kept happy.

Obama will need all the money he can get to fight for re-election next year, given that his poll ratings are low. The state of the economy is no help to him.

In that context, the rights or otherwise of Australians are of no importance. There are bigger fish to fry and the US appears intent on giving its big corporates the pound of flesh they are after.

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