tag:theconversation.com,2011:/au/topics/tppa-1883/articlesTPPA – The Conversation2022-05-24T18:29:08Ztag:theconversation.com,2011:article/1837162022-05-24T18:29:08Z2022-05-24T18:29:08ZNew Zealand has just joined an overtly anti-China alliance – are the economic risks worth it?<p>The <a href="https://www.nzherald.co.nz/nz/prime-minister-jacinda-arderns-united-states-trip-covid-complication-for-white-house-joe-biden-visit/CCCRB4YCJUT36MGBACVGAUAXJU/">uncertainty</a> over whether Jacinda Ardern might land a White House meeting and photo opportunity with US President Joe Biden was perhaps fitting, given the lack of clarity about one of their main topics of discussion.</p>
<p>On Monday in Tokyo <a href="https://www.aljazeera.com/economy/2022/5/23/biden-launches-economic-framework-aimed-at-countering-china">Biden launched</a> his Indo-Pacific Economic Framework (IPEF). He was flanked by the three other leaders from the “<a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/24/joint-statement-from-quad-leaders/">Quad</a>” alliance: Japan, India and Australia, whose new prime minister, Anthony Albanese, was <a href="https://abcnews.go.com/International/wireStory/albanese-sworn-pm-australia-ahead-tokyo-summit-84901549">speedily sworn in</a> so he could reach Tokyo in time.</p>
<p>Ardern <a href="https://www.beehive.govt.nz/release/pm-attends-indo-pacific-economic-framework-talks-ahead-us-travel-0">joined by video</a> and plans to discuss the IPEF directly with Biden in Washington next week, White House COVID rules permitting. But despite the high-profile launch, the IPEF remains an enigma, a high-level idea in search of substance.</p>
<p>We know it has four pillars: trade, supply chain resiliency, clean energy and decarbonisation, and tax and anti-corruption. We also know 13 countries have signed up: the Quad plus New Zealand, Brunei, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.</p>
<p>The next few months will be spent scoping the framework – something you’d expect might happen before countries opt in. But the lack of substance doesn’t matter for now. The launch was symbolic, applauding US re-engagement with the Asia-Pacific (now rebranded Indo-Pacific) region.</p>
<p>That was the easy part. Actually bringing the IPEF to fruition faces major hurdles.</p>
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<h2>US versus China</h2>
<p>Most commentators have homed in on the geopolitical conundrum. The <a href="https://www.whitehouse.gov/wp-content/uploads/2022/02/U.S.-Indo-Pacific-Strategy.pdf">Indo-Pacific Strategy</a> issued by the White House in February complained that:</p>
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<p>[China] is combining its economic, diplomatic, military, and technological might as it pursues a sphere of influence in the Indo-Pacific and seeks to become the world’s most influential power.</p>
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<p>The US views the IPEF as the vehicle to reassert its economic primacy. And Australia and Japan are fully on board.</p>
<p>The IPEF gives Albanese an <a href="https://www.scmp.com/news/china/diplomacy/article/3178699/australias-new-pm-albanese-has-chance-mend-fences-china">early opportunity</a> to dispel election campaign suggestions he is soft on China, while distinguishing himself from his predecessor <a href="https://www.theguardian.com/business/2022/feb/10/coalition-boasts-of-tough-line-on-china-but-documents-reveal-private-fears-on-trade">Scott Morrison’s belligerence</a> as trade tensions with China escalated.</p>
<p>Indian Prime Minister Narendra Modi is <a href="https://www.deccanherald.com/national/modi-agrees-to-join-biden-in-launch-of-ipef-in-tokyo-after-us-tweaks-text-of-announcement-1111645.html">more cautious</a>, especially about China. Biden’s announcement was reportedly rewritten to launch “collective discussions towards future negotiations”, which leaves India’s options open.</p>
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Read more:
<a href="https://theconversation.com/new-drives-to-counter-china-come-with-a-major-risk-throwing-fuel-on-the-indo-pacific-arms-race-168734">New drives to counter China come with a major risk: throwing fuel on the Indo-Pacific arms race</a>
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<h2>NZ’s China tightrope</h2>
<p>Aotearoa New Zealand has a bigger dilemma. For years successive governments have sat on the fence, assuming they could divorce the country’s economic dependency on China from strategic alliances that were increasingly anti-China.</p>
<p>That <a href="https://www.stuff.co.nz/national/politics/300369437/easy-growth-drives-nzs-risky-reliance-on-china">dependency is now overwhelming</a>, making the IPEF’s overtly anti-China strategy a real economic liability.</p>
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Read more:
<a href="https://theconversation.com/anzus-without-nz-why-the-new-security-pact-between-australia-the-uk-and-us-might-not-be-all-it-seems-168071">ANZUS without NZ? Why the new security pact between Australia, the UK and US might not be all it seems</a>
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<p>To have credibility, the US also needs broader buy-in from the region. Seven of the ten ASEAN countries have agreed to participate. But these are early days. <a href="https://www.eastasiaforum.org/2022/05/02/what-asean-takes-to-washington/?utm_source=subscribe2&utm_medium=email&utm_campaign=postnotify&utm_id=841389&utm_title=What%20ASEAN%20takes%20to%20Washington">Few will want to jeopardise</a> their relationship with China for nothing tangible in return.</p>
<p><a href="https://tradejusticeedfund.org/wp-content/uploads/PressMemo_ASEANCountriesInappropriateforIPEF_051022.pdf">US unions have already targeted</a> Malaysia, Indonesia and Vietnam for their poor human rights and labour records. They are hardly likely to accept US demands that they accept “gold standard” labour laws.</p>
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<img alt="" src="https://images.theconversation.com/files/464895/original/file-20220523-25-n6mt9o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/464895/original/file-20220523-25-n6mt9o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/464895/original/file-20220523-25-n6mt9o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/464895/original/file-20220523-25-n6mt9o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/464895/original/file-20220523-25-n6mt9o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/464895/original/file-20220523-25-n6mt9o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/464895/original/file-20220523-25-n6mt9o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Setting the agenda: US Trade Representative Katherine Tai at a Senate Finance Committee hearing in March.</span>
<span class="attribution"><span class="source">Getty Images</span></span>
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<h2>Domestic US politics</h2>
<p>The second hurdle is US domestic politics. There is no question the IPEF will put “America first”. But internal US consultations reveal a <a href="https://www.bloomberg.com/news/articles/2022-04-12/warren-casey-press-biden-trade-officials-to-prioritize-workers">battle between two camps</a> on what this means.</p>
<p>The Democrats’ <a href="https://www.regulations.gov/comment/USTR-2022-0002-1195">core labour and environment base</a> has been promised a new trade model that prioritises workers, the environment and domestic communities ahead of US corporate profits.</p>
<p>They’re rallying behind US Trade Representative Katherine Tai who is responsible for the trade pillar of the IPEF. Its broad scope includes the digital economy and emerging technology, labour commitments, the environment, trade facilitation, transparency and good regulatory practices, and corporate accountability.</p>
<p>These are all chapters in the <a href="https://www.mfat.govt.nz/en/about-us/who-we-are/treaties/trans-pacific-partnership-agreement-tpp/text-of-the-trans-pacific-partnership/">Trans-Pacific Partnership Agreement</a> (TPPA), including the super-sensitive issue of cross-border data flows and data localisation. But Tai’s trade mandate excludes the domestically volatile issues of market access for goods, including agriculture, which is what most countries, including New Zealand, really want.</p>
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<h2>Corporate agendas</h2>
<p>The <a href="https://citizen.typepad.com/eyesontrade/2022/05/public-submissions-to-us-government-reveal-corporate-wishlist-for-ipef-more-power-at-our-expense.html">US corporate lobby</a>, on the other hand, wants to revive the tariff-cutting agenda of the TPPA, which Tai rejects as a 20th-century model that is not fit for purpose.</p>
<p>And corporate America wants to secure strong rules to protect Big Tech from new regulation, something that falls within Tai’s “trade” mandate. They seek a champion in Secretary of Commerce Gina Raimondo, who oversees the other three pillars.</p>
<p>During this week’s <a href="https://www.whitehouse.gov/briefing-room/press-briefings/2022/05/23/on-the-record-press-call-on-the-launch-of-the-indo-pacific-economic-framework/">White House briefing</a> on the IPEF, Tai made the administration’s priorities crystal clear. While traditional stakeholders have to be part of the solution, she said, they will be</p>
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<p>ensuring that other stakeholders, like our workers, like our environmental organisations, the ones who are the smartest about climate and the policy solutions that we need, that they have premier seats at the table and that they will be influencing and shaping the policies that we create.</p>
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Read more:
<a href="https://theconversation.com/with-a-new-australian-government-and-foreign-minister-comes-fresh-hope-for-australia-china-relations-182785">With a new Australian government and foreign minister comes fresh hope for Australia-China relations</a>
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<h2>Is the IPEF worth it?</h2>
<p>Of course, the IPEF may never be concluded. It has no bipartisan support in the US. Even if the Biden administration has the best of intentions, it cannot give an assurance that future administrations will maintain improved environmental and labour standards in the US or honour commitments to other countries taking part in IPEF.</p>
<p>The Biden White House wants to avoid putting the deal to a vote in Congress. But once it drags into the next presidential election cycle it risks falling into the abyss behind the TPPA.</p>
<p>Realistically, the IPEF is a “pig in a poke”. Aotearoa New Zealand and Australia need to take a deep breath and realistically assess the opportunities and threats from such an arrangement.</p>
<p>That means assessing it next to pressing challenges like the climate emergency, lessons from the pandemic, successive global financial crises, the largely unregulated private power of Big Tech, geopolitical rivalries in a multi-polar world, New Zealand’s obligations to Māori under Te Tiriti o Waitangi, and more.</p>
<p>Then they must weigh up the options: stand aside from the negotiations, pursue alternative arrangements, or establish a clear, public negotiating mandate that would truly maximise the nations’ interests for the century ahead.</p><img src="https://counter.theconversation.com/content/183716/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Professor Kelsey was a prominent critical commentator on the Trans-Pacific Partnership Agreement.
</span></em></p>For years, New Zealand has tried to separate its economic dependency on China from its pro-Western strategic alliances. The new Indo-Pacific Economic Framework tests that balancing act even more.Jane Kelsey, Emeritus Professor of Law, University of Auckland, Waipapa Taumata RauLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1609222021-05-18T03:50:30Z2021-05-18T03:50:30ZNew Zealand is overdue for an open and honest debate about 21st-century trade relations<figure><img src="https://images.theconversation.com/files/401112/original/file-20210517-15-7z6onb.jpg?ixlib=rb-1.1.0&rect=38%2C7%2C5137%2C3437&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Anti-TPPA protesters march down Auckland's Queen Street in 2015.</span> <span class="attribution"><span class="source">GettyImages</span></span></figcaption></figure><p>With more countries considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (<a href="https://www.mfat.govt.nz/br/trade/free-trade-agreements/free-trade-agreements-in-force/comprehensive-and-progressive-agreement-for-trans-pacific-partnership-cptpp/">CPTPP</a>), New Zealand urgently needs a real public debate on the future of such trade and investment agreements.</p>
<p>In February this year the UK <a href="https://www.bbc.com/news/business-55871373">formally applied</a> to join as part of its quest for post-Brexit free trade agreements. Reportedly, <a href="https://www.bangkokpost.com/business/2063435/another-3-months-of-studies-followed-by-cptpp-decision">Thailand</a>, <a href="https://en.yna.co.kr/view/AEN20210111003900320">South Korea</a>, the <a href="https://business.inquirer.net/319987/ph-wants-to-join-mega-free-trade-pact">Philippines</a>, <a href="https://www.scmp.com/news/china/diplomacy/article/3113901/taiwan-aims-be-eligible-join-cptpp-beijing-must-revisit-japan">Taiwan</a> and even <a href="https://www.gtreview.com/news/asia/93979/">China</a> are to varying degrees considering membership.</p>
<p>Coverage of these developments is often overly simplistic, treating expansion as a notch in the belt for those who see the CPTPP as shaping the 21st century’s global trade rules.</p>
<p>Behind the headlines, the reality is more complex. Given the CPTPP restricts governments’ ability to regulate their own economies in return for notional benefits, it warrants closer scrutiny from all sides.</p>
<p>But the secrecy surrounding possible new memberships makes scrutiny difficult, just as it earlier hindered independent assessments of the Trans-Pacific Partnership Agreement (<a href="https://www.tpp.mfat.govt.nz/">TPPA</a>) and subsequent CPTPP negotiations.</p>
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<h2>Blueprint for a neoliberal trade agenda</h2>
<p>The original TPPA was always intended as a blueprint for future trade relations across the Asia-Pacific region (with the now-abandoned Transatlantic Trade and Investment Partnership proposing similar rules for US-EU trade).</p>
<p>New Zealand was primarily committed to the TPPA as an opportunity to secure a free trade agreement (FTA) with the United States, regardless of the costs.</p>
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<em>
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Read more:
<a href="https://theconversation.com/australia-has-a-great-chance-to-engage-in-trade-diplomacy-with-china-and-it-must-take-it-154737">Australia has a great chance to engage in trade diplomacy with China, and it must take it</a>
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<p>Despite vociferous <a href="https://www.rnz.co.nz/news/national/258894/thousands-of-nzers-rally-against-tppa">public protest</a> against its potential to erode national sovereignty, which forced discussion out of the shadows, the National government signed the TPPA anyway.</p>
<p>The Labour, New Zealand First and Green parties all opposed its ratification in the select committee, as did Māori in the Waitangi Tribunal. National ignored them again, ratifying the text in May 2017.</p>
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<img alt="Singapore's Minister for Trade and Industry Lim Hng Kiang shaking hands with New Zealand Prime Minister John Key" src="https://images.theconversation.com/files/401109/original/file-20210517-13-4t45ir.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/401109/original/file-20210517-13-4t45ir.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/401109/original/file-20210517-13-4t45ir.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/401109/original/file-20210517-13-4t45ir.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/401109/original/file-20210517-13-4t45ir.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/401109/original/file-20210517-13-4t45ir.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/401109/original/file-20210517-13-4t45ir.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Singapore’s Minister for Trade and Industry Lim Hng Kiang with New Zealand Prime Minister John Key after signing the Trans Pacific Partnership in Auckland in 2016.</span>
<span class="attribution"><span class="source">GettyImages</span></span>
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<h2>Labour does a U-turn</h2>
<p>Before the 2017 election, with the TPPA’s public support in tatters, the Labour Party was keen to paint itself as part of the increasingly popular movement against corporate-led globalisation.</p>
<p>Its minority report to the <a href="https://www.parliament.nz/en/pb/sc/reports/document/51DBSCH_SCR68965_1/international-treaty-examination-of-the-trans-pacific-partnership">select committee</a> noted:</p>
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<p>The Labour Party wishes to protest in the strongest terms at the government’s failure to effectively represent the long-term interests of New Zealand in the Trans-Pacific Partnership negotiations.</p>
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<p>And yet when the incoming Trump Administration <a href="https://www.politico.com/story/2019/01/23/trans-pacific-trade-pact-2017-1116638">stepped back</a> from the TPPA in early 2017, Labour turned cheerleader for a slightly modified CPTPP agreement.</p>
<p>In government Labour argued the necessary changes had been made to make the agreement acceptable, but in reality hardly anything had changed.</p>
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Read more:
<a href="https://theconversation.com/what-american-farmers-could-gain-by-rejoining-the-asia-pacific-trade-deal-that-trump-spurned-152148">What American farmers could gain by rejoining the Asia-Pacific trade deal that Trump spurned</a>
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<p>A few provisions, mainly on intellectual property rights, were <a href="https://www.mfat.govt.nz/assets/Trade-agreements/CPTPP/ANNEX-II_LIst-of-suspended-Provisions.pdf">suspended</a> but not withdrawn, while a series of side letters of <a href="https://researcharchive.vuw.ac.nz/xmlui/bitstream/handle/10063/8485/paper_access.pdf?sequence=1">questionable legal value</a> meant investors from Australia and Peru could not challenge New Zealand laws or decisions directly in dubious offshore tribunals.</p>
<p>But investors from other parties to the CPTPP – Japan, Singapore, Brunei, Malaysia, Chile, Canada and Vietnam – could still bring controversial investor-state disputes.</p>
<p>What’s more, the Labour government never withdrew ratification of the TPPA, and rolled out the same <a href="https://www.mfat.govt.nz/assets/Trade-agreements/CPTPP/CPTPP-Final-National-Interest-Analysis-8-March.pdf">economic modelling</a> it had previously stridently criticised to justify its new-look CPTPP. </p>
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<img alt="Jacinda Ardern and Winston Peters at a cabinet meeting" src="https://images.theconversation.com/files/401110/original/file-20210517-13-1yjndp4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/401110/original/file-20210517-13-1yjndp4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/401110/original/file-20210517-13-1yjndp4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/401110/original/file-20210517-13-1yjndp4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/401110/original/file-20210517-13-1yjndp4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/401110/original/file-20210517-13-1yjndp4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/401110/original/file-20210517-13-1yjndp4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">On the same side: Prime Minister Jacinda Ardern and deputy Winston Peters at a cabinet meeting after forming a coalition government in 2017.</span>
<span class="attribution"><span class="source">GettyImages</span></span>
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<h2>What’s in it for New Zealand?</h2>
<p>Countries wanting to join the CPTPP need agreement from existing parties, one by one. Each of the 11 member countries can extract a price beyond what is already in the CPTPP.</p>
<p>That level of bargaining makes it extremely difficult to secure new exemptions or concessions, or even equivalent protections for regulation of investments, services or government procurement contracts in the agreement’s various schedules. In reality, countries wanting to join will have to give a lot more.</p>
<p>New Zealand, for example, has described a bilateral free trade agreement as a “stepping stone” to the UK joining the CPTPP. What price will New Zealand demand? More <a href="https://www.ruralnewsgroup.co.nz/rural-news/rural-general-news/nz-welcomes-uk-but-must-walk-the-talk">market access</a> for agriculture (despite the recognised need to diversify the economy and markets) and no investor-state disputes.</p>
<p>The UK wants <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/901870/uk-strategy-uk-nz-free-trade-agreement.pdf">fewer limits</a> on its financial and professional services firms, stronger intellectual property rights for its pharmaceutical, manufacturing and media industries, more access to government procurement, inclusion of investor-state dispute settlement or an equivalent, and more. </p>
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Read more:
<a href="https://theconversation.com/corporations-prepare-to-sue-as-pandemic-reveals-trade-flaws-136604">Corporations prepare to sue as pandemic reveals trade flaws</a>
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<p>Why would New Zealand make such a deal? Because of the bipartisan belief that more free trade agreements are always better, regardless of the evidence showing they compound the risks to regulatory sovereignty.</p>
<p>Why would the UK put itself through this? Partly because its political leaders and trade officials are driven by the same ideology. Partly because it needs to show it can replace EU membership with other “special relationships”.</p>
<p>Ironically, Brexit was sold as restoring UK sovereignty, whereas the CPTPP would take even more of it away. But the familiar veil of secrecy prevents scrutiny and an objective cost-benefit analysis.</p>
<h2>Another free trade merry-go-round</h2>
<p>What about the likes of Thailand, the Philippines or South Korea? All three already have multiple FTAs with most CPTPP parties.</p>
<p>New Zealand, for example, has an <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/nz-korea-free-trade-agreement/">FTA with South Korea</a>, which is also a party to the Regional Comprehensive Economic Partnership (<a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-concluded-but-not-in-force/regional-comprehensive-economic-partnership-rcep/rcep-overview">RCEP</a>) just signed this year. The Philippines is a party to the New Zealand-Australia FTA with ASEAN and the RCEP. New Zealand has a bilateral <a href="https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/nz-thailand-closer-economic-partnership/">FTA with Thailand</a> as well.</p>
<p>It’s hard to imagine why those countries would give New Zealand greater market access than they were prepared to already, especially in the RCEP, and accept the CPTPP’s more onerous restrictions on their domestic policies and laws. Yet reports suggest they are eager to engage in this Faustian bargain.</p>
<p>The CPTPP risks becoming another merry-go-round in the largely secretive circus of free trade agreements. Countries seem willing to climb on board without prior public scrutiny or any compelling rationale.</p>
<p>It’s time to pull back the curtains and have an open and honest debate about the kind of trade relations New Zealand and other nations really need for the 21st century.</p><img src="https://counter.theconversation.com/content/160922/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jane Kelsey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>More countries, including a post-Brexit UK, are looking at joining the CPTPP free trade agreement. But the secrecy around negotiations makes serious analysis virtually impossible.Jane Kelsey, Professor of Law, University of Auckland, Waipapa Taumata RauLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/563612016-04-13T20:17:24Z2016-04-13T20:17:24ZWhy China could never sign on to the Trans-Pacific Partnership<p><a href="http://piie.com/publications/pubs_year.cfm?ResearchTypeID=1&ResearchYear=2016">Recent</a> estimates show that most members of the Trans-Pacific Partnership will make substantial gains, unlike those who opt not to participate. </p>
<p>US annual real income is expected to increase by 0.5% of GDP while annual exports will increase by 9.1%. Exports of Japan, Vietnam and Malaysia are expected to increase by 23.2%, 30.1% and 20.1% respectively. Non-members, on the other hand, are expected to gain little. China, for example, is expected to gain only 0.2% when the agreement is concluded in 2030.</p>
<p>So was China’s decision not to join a big mistake?</p>
<p>In 2013, the 12 countries participating in the TPP accounted for about a third of China’s trade in merchandise goods. However the US stands out as it makes up about half of the TPP in terms of exports, and about a quarter when it comes to imports. This would imply that exclusion from the TPP is essentially a lost opportunity for any country trying to secure a Free Trade Agreement (FTA) with the United States.</p>
<p>Meanwhile, a look at the Trade Complementary Index (TCI) – an indicator of how well the structures of a country’s imports and exports match – shows how much could be gained by both the US and China if the latter were included in the TPP.</p>
<p>But are those opportunities enough to get past the hurdles? Since the TPP is an agreement involving both emerging and advanced economies, it has to be more complex than those between economies at the same level of development; and it has to have sufficient room for bargaining. If China had chosen to be part of the TPP, the negotiations would have been slow and perhaps would not have ended with an agreement because of the many sensitive issues involved. </p>
<p>Some of the main stumbling blocks include state-owned enterprises, transparency, labour regulation, market-based competition and investor state disputes.</p>
<h2>State-owned enterprises (SOEs)</h2>
<p>The TPP requires that no subsidies should be provided to an SOE for its international business expansion. The goal: to ensure competition between an SOE and a private enterprise takes place on a level playing field inside the host country.</p>
<p>But <a href="http://www.ft.com/intl/cms/s/0/69253d76-633c-11e5-97e9-7f0bf5e7177b.html#axzz41eH3PAlR">China’s 150,000 SOEs</a> form the bedrock of the Chinese economy and therefore have certain privileges. </p>
<p>About a thousand SOEs are listed in the Shanghai or Shenzhen Stock Exchanges, indicating they are commercial in nature. More than 150 of these are managed by the central SASAC, and the list includes some of the largest companies in the world.</p>
<p>The Chinese government assists these SOEs in various <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2354348">ways</a>, including preferential interest rates. Although there have been exceptions under the TPP (for example New Zealand was able to get exemptions for its powerful cooperative Fonterra), it would have been an uphill battle for China to negotiate exemptions for so many of its SOEs engaged in various international operations within TPP member countries.</p>
<h2>Transparency and anti-corruption</h2>
<p>The TPP commits partners to writing and enforcing anti-bribery laws. It can be argued that enforcement would have been a challenge for China. </p>
<p>In Transparency International’s Corruption Perception index, which ranks countries based on the degree of corruption in the public sector, only two TPP countries <a href="http://www.transparency.org/cpi2014">ranked</a> below China in 2014 – Vietnam and Mexico. Although one can argue that membership in the TPP could raise the bar for China’s efforts at eradicating corruption, the gap between China and important partners (the US and Japan) is significant. The TPP could have been yet another platform for critics to accuse China of lacklustre anti-corruption efforts.</p>
<h2>Labour</h2>
<p>The inclusion of labour issues in an FTA is rare since labour rights are considered “domestic issues” and interference by external parties jeopardises the sovereignty of individual members. In this regard, the TPP can be considered bold. </p>
<p>The chapter on labour would have been a contentious issue between China and the US. For example China’s labour laws, while allowing freedom of association, require all trade unions to be affiliated with the All-China Federation of Trade Unions, which is an agency of the Chinese Communist Party. The agreement, meanwhile, requires TPP partners to adopt a legal framework that upholds fundamental labour rights as recognised by the International Labour Organization.</p>
<h2>Free and open competition</h2>
<p>A common philosophy within the TPP agreement is free competition among signatories. Firms from any TPP country will be allowed to bid for government contracts in another, for example. Testing and certification awarded by an assessment body in one country should be accepted in other countries as well. </p>
<p>The chapter on competition generally calls for member countries to reach the standards practised in countries like Singapore and New Zealand, known for their ease of doing business. But in the World Bank’s Doing Business <a href="http://www.doingbusiness.org/data">rankings</a> for 2016, China was lower than all TPP partners, except Vietnam. China would have had to negotiate hard to get exemptions for its SOEs and SMEs from these open competition clauses and chapters.</p>
<h2>Investor-State Dispute Settlement (ISDS)</h2>
<p>While it has its <a href="https://www.washingtonpost.com/blogs/monkey-cage/wp/2015/03/26/people-are-freaking-out-about-the-trans-pacific-partnerships-investor-dispute-settlement-system-why-should-you-care">critics</a>, the ISDS – a system under which an investing company can seek compensation from a host country if its property rights are violated – has been included in several FTAs recently. This is because it offers an assurance to multinational corporations that expropriation by host governments is only a remote <a href="http://aib.msu.edu/publications/insights/volume/16/issue/1">possibility</a>.</p>
<p>Over the last 15 years China has been <a href="http://www.ft.com/intl/cms/s/0/07507e0e-5e05-11e4-bc04-00144feabdc0.html#axzz41XcPJli0">signing</a> agreements containing the ISDS clause as it has been <a href="http://www.ft.com/intl/cms/s/87437290-0620-11e2-bd29-00144feabdc0,Authorised=false.html?siteedition=uk&_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F87437290-0620-11e2-bd29-00144feabdc0.html%3Fsiteedition%3Duk&_i_referer=&classification=conditional_standard&iab=barrier-app#axzz42ldHahRe">effective</a> in protecting the country’s investments abroad. However the World Justice <a href="http://worldjusticeproject.org/publication/rule-law-index-reports/rule-law-index-2015-report">Project</a>, which ranks countries on the rule of law – and regulatory enforcement in particular – shows that China fares miserably when compared with other TPP countries. Only Mexico is marginally below it.</p>
<p>It’s very likely the ISDS would have been a heated issue for China, and it is possible that like Australia, Mexico, Peru and Vietnam, China would have fought for many exemptions.</p>
<h2>Opportunity cost limited, for now</h2>
<p>China’s other international initiatives, as well as its sheer size, reduce the losses of being a TPP outsider. But it has lost an opportunity to commit to an improvement in the general trading and investment climate and drive new impetus to its dwindling export sector. </p>
<p>The agreement offers member countries a road map and a schedule to reform the business environment and make it more competitive. Countries with similar capabilities, like Japan and South Korea on the higher end and Vietnam on the lower end, will be able to divert some trade away from China. It is therefore important for China to build up its productivity to ensure it is able to compete with TPP members for market share.</p>
<p>China has also lost an opportunity to sign an FTA with the US, but following a specified TPP schedule would be seen as the US dictating the reforms in China. And the US is hardly likely to penalise China given its importance to world trade.</p>
<p>China has always reformed using its own timetable. For a country that is establishing its legitimacy as a global economic power, it has to write its own future. The rules of the TPP may not fit the current state of the Chinese economy. China has to mould a domestic economy that is large enough to withstand any global economic slowdown. To create that domestic economy, certain features of the “old” economy may still be required.-</p><img src="https://counter.theconversation.com/content/56361/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bala Ramasamy does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>To create a resilient domestic economy, certain features of the “old” economy may still be required in China.Bala Ramasamy, Professor of Economics, China Europe International Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/486532015-10-06T05:34:01Z2015-10-06T05:34:01ZFive things you need to know about the Trans-Pacific Partnership<p>After eight years and 19 rounds of <a href="http://dfat.gov.au/trade/agreements/tpp/pages/trans-pacific-partnership-agreement-tpp.aspx">negotiations</a> that began in Melbourne in 2010, the <a href="https://ustr.gov/about-us/policy-offices/press-office/press-releases/2015/october/summary-trans-pacific-partnership">Trans-Pacific Partnership Agreement</a> has been concluded in Atlanta.</p>
<p>The agreement will create a free trade zone among 12 nations, including Australia, the US, Japan and New Zealand. Together, the TPP nations account for 40% of global GDP and 24% of the world’s trade in services.</p>
<p>The <a href="https://theconversation.com/multilateral-regional-bilateral-which-agreement-is-best-19664">multilateral trade deal</a> will eliminate 98% of all tariffs levied by signatory countries, on products including beef, dairy, wine, sugar, rice, horticulture and seafood. It also extends to manufactured goods, resources and energy, and services.</p>
<p>Here are five of the key things you need to know about it.</p>
<hr>
<p><strong>1. We still don’t have the full text of the agreement, so many people are reserving judgement</strong></p>
<p>Despite some leaks of various chapters of the agreement the TPP has largely been shrouded in <a href="https://theconversation.com/the-trans-pacific-partnership-and-australias-right-to-know-20334">secrecy. </a></p>
<p>Once the wording of the agreement is finalised it will be posted on the Department of Foreign Affairs and Trade website. This is expected to happen within 30 days.</p>
<hr>
<p><strong>2. The deal still has to be ratified in national legislatures, including the US Congress, which has been hostile</strong></p>
<p><em>Jeffrey Wilson, Lecturer in Politics and International Studies, Murdoch University:</em></p>
<p>Negotiating a text for the TPP was only half the political challenge – governments now have to implement the agreement through a process known as “ratification”. This involves a country amending its own domestic laws to ensure they comply with the specified treaty commitments.</p>
<p>In case of the TPP this is a major task, as its provisions range across a wide range of areas as diverse as trade, investment government procurement, telecommunication, labour rights, environmental protection and financial services. Many interest groups have already indicated they will try and sink the deal by obstructing ratification in national legislatures.</p>
<p>It is expected that ratification will be unproblematic in Singapore, Brunei, Vietnam, and New Zealand, where governments currently have the political capacity to legislate for the required changes.</p>
<p>I predict that ratification will be relatively straightforward in Australia as well. While the LNP government requires support from the ALP in the Senate, most of Australia’s core requests (particularly tobacco ISDS safeguards and biologic drug restrictions) were obtained during negotiations. Australia also stands to make major gains in agriculture and services, which have eluded us in bilateral FTAs with China and Japan. It would be a “<a href="https://www.youtube.com/watch?v=ik8JT2S-kBE">courageous’ political move</a>” for the ALP to block the deal.</p>
<p>The key “problem” countries are Japan, Canada and the US.</p>
<p>In Japan and Canada, there will be widespread opposition to some agricultural liberalisation provisions from farm and rural groups. Japanese Prime Minister Abe likely has the support to push these reforms ahead, but Canada’s position hinges on the outcome of the October 19 election.</p>
<p>Paradoxically, it is the US – the key driver of the TPP - where it faces the hardest domestic sell. In June 2015, President Obama obtained “fast-track” authority from the US legislature, which means the TPP will now be put to the Congress for a “yes or no” vote in 90 days. However, Obama relied on support from moderate Republicans to gain fast-track authority, and a number of prominent Democrats (including Presidential Candidate Bernie Sanders) oppose the deal. The current Presidential primaries will also cloud the US policy debate. For what it is worth, Donald Trump is against the TPP.</p>
<p><em>Further reading:</em></p>
<p><a href="https://theconversation.com/explainer-negotiators-reach-landmark-pacific-trade-deal-so-whats-next-48641">Explainer: Negotiators reach landmark Pacific trade deal, so what’s next?</a></p>
<hr>
<p><strong>3. There is an Investor State Dispute Settlement clause in the agreement</strong></p>
<p><em>Elizabeth Thurbon, Senior Lecturer in international Relations, UNSW Australia:</em></p>
<p>ISDS clauses allow foreign investors to sue host country governments for regulatory changes that “harm” their investments. In agreeing to the inclusion of ISDS in the TPP (and in the Korea and China deals) the Abbott and Turnbull governments have ignored the advice of the Productivity Commission, which has argued strongly against ISDS clauses since its 2010 review of Australia’s Preferential Trade Deals. </p>
<p>As the PC points out, ISDS clauses can promote “regulatory chill” by disinclining governments from regulating in the public interest, lest they be subject to action by foreign firms. ISDS clauses are also inherently discriminatory, in that they grant arbitration privileges to foreign but not local companies. Furthermore, those arbitrations are carried out by small groups of legal experts who are not required to consider legal precedent and whose decisions are not open to appeal. The decision to accept ISDS in KAFTA, CHAFTA and the TPP marks a significant departure from the previous Labor government’s explicit and principled objection to the inclusion of ISDS in any future trade deals (which is largely what held up CHAFTA and KAFTA under Labor). </p>
<p>In agreeing to ISDS, Australia is now swimming against the tide of other advanced economies including France and Germany, which have both taken a strong stance against it. This follows the German government being sued by Swedish energy firm Vattenfall for its decision to shift away from nuclear power following the Fukushima disaster in Japan.</p>
<p>Both the US and Australian governments have indicated in their TPP announcements that the ISDS clauses negotiated have been designed to exempt “public interest” regulation from appeal, to make transparent the arbitration process and to discourage “frivolous” ISDS claims. As the text of the agreement is not yet available, it is unclear whether these exemptions extend to regulations aimed, for example, at transitioning away from a fossil fuelled economy towards more a sustainable energy footing. </p>
<p><em>Further reading:</em></p>
<p><a href="https://theconversation.com/when-trade-agreements-threaten-sovereignty-australia-beware-18419">When trade agreements threaten sovereignty: Australia beware</a></p>
<p><a href="https://theconversation.com/sovereign-risk-fears-around-tpp-are-overblown-39865">Sovereign risk fears around TPP are overblown</a></p>
<hr>
<p><strong>4. Medicines are not likely to end up more expensive in Australia as a result</strong></p>
<p><em>Belinda Townsend, Sessional Academic, Deakin University</em></p>
<p>The Australian government has signalled the deal will have <a href="http://www.abc.net.au/news/2015-10-06/pacific-nation-ministers-negotiators-lock-in-tpp-trade-deal/6829368">“no impact on the Pharmaceutical Benefits Scheme”</a>. The <a href="http://dfat.gov.au/trade/agreements/tpp/resources/Pages/myths-versus-realities.aspx">Department of Foreign Affairs and Trade</a> has also claimed it would not accept an outcome that increases the price of medicines for Australians. If this is correct, Australia may have avoided adopting intellectual property measures that would increase the cost of medicines in the country. </p>
<p>Australia has apparently resisted attempts by the United States to extend data exclusivity protection on biologic drugs beyond five years. This move will likely <a href="http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAAahUKEwip-Yj74KzIAhWnF6YKHSiMDEo&url=http%3A%2F%2Fdfat.gov.au%2Ftrade%2Fagreements%2Ftpp%2Fsubmissions%2FDocuments%2Ftpp_sub_gleeson_lopert_moir.pdf&usg=AFQjCNGmbH9lsTfJDPp8b0TfSR-SBg0SAQ">save taxpayers millions of dollars a year</a> by preventing unnecessary additional delays in the introduction of biosimilars (also known as generics). </p>
<p>While this would be a great outcome for patients, it remains to be seen what Australia actually has agreed to given the text is still secret. It is very likely, however, that the final TPP intellectual property chapter contains measures that will <a href="http://infojustice.org/wp-content/uploads/2015/08/gleeson08052015.pdf">delay market entry of generic or biosimilar medicines</a> in low and middle income countries party to the agreement. Delays in generic competition often result in paying higher prices for originator medicines under monopoly. This creates problems for access when medicines are priced out of reach.</p>
<p><em>Further reading:</em></p>
<p><a href="https://theconversation.com/trans-pacific-partnership-puts-member-countries-health-at-risk-13711">Trans-Pacific Partnership puts member countries health at risk</a></p>
<hr>
<p><strong>5. Labour protections are included, but that doesn’t mean the unions will support it</strong></p>
<p><em>Tim Harcourt, J.W Nevile Fellow in Economics, UNSW Australia</em></p>
<p>The TPP parties are all members of the International Labor Organization (ILO) and have agreed to “have laws governing minimum wages, hours of work, and occupational safety and health”. In reality, most countries pay above the minimum wage in the ILO, but it’s probably a good provision to have.</p>
<p>Ultimately all the developing countries and emerging countries that sign the agreement aspire to have better labour conditions. The whole idea of having trade agreements is to lift standards up, not drag them down. How that happens is often complex but most economists support the idea that if you pay efficiency wages you improve productivity.</p>
<p>I would think if anything the union movement would be more opposed to the TPP than CHAFTA given the sectors involved. Most of the CHAFTA provisions involving labour are about taking executives from state-owned enterprises to work on Chinese projects.</p>
<p>My <a href="https://www.business.unsw.edu.au/research-site/centreforappliedeconomicresearch-site/Documents/T.%20Harcourt%20-%20Why%20Australia%20Needs%20Exports.pdf">research</a> has found that exporters, on average, are more likely to be unionised, pay 60% higher wages than non-exporters, provide better levels of occupational health and safety, more education and training, and equal opportunity provisions.</p>
<p><em>Further reading:</em></p>
<p><a href="https://theconversation.com/australia-can-get-the-balance-right-on-free-trade-and-workers-rights-47196">Australia can get the balance right on free trade and worker’s rights</a></p><img src="https://counter.theconversation.com/content/48653/count.gif" alt="The Conversation" width="1" height="1" />
There’s still some way to go before the 12 countries involved can celebrate.Charis Palmer, Deputy Editor/Chief of StaffLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/485952015-10-06T02:49:29Z2015-10-06T02:49:29ZWhy biologics were such a big deal in the Trans Pacific Partnership<p>After five years of negotiations, a <a href="https://ustr.gov/about-us/policy-offices/press-office/press-releases/2015/october/trans-pacific-partnership-ministers">deal has finally been reached</a> on the Trans Pacific Partnership Agreement (TPP). But details are sketchy and the final text may not see daylight for several weeks, as it undergoes what’s quaintly referred to as “legal scrub” – the painstaking dotting of the i’s and crossing of the t’s by each of the participating countries’ lawyers.</p>
<p>Before this final round of negotiations in Atlanta, only a handful of issues remained in the way of concluding the massive 12-country trade and investment agreement. One of them – a potential deal-breaker for Australia – was intellectual property protections for <a href="https://theconversation.com/explainer-what-are-biologics-and-biosimilars-45308">biologics</a>, which are expensive medicines derived from living organisms.</p>
<h2>Market exclusivity</h2>
<p>In the United States, <a href="https://theconversation.com/explainer-what-are-biologics-and-biosimilars-45308">biologics</a> are protected from competition by follow-on products (known as biosimilars, which are akin to generic medicines) for 12 years from the time they’re first granted marketing approval by the nation’s drug regulator, the Food and Drug Administration (FDA). This form of protection from competition is distinct from a patent. It prevents a follow-on product from entering the market even when any patents on the originator product have expired. </p>
<p>These 12 years are known as the market exclusivity period. In the TPP negotiations, the biopharmaceutical industry has been insisting the United States push its potential partners to <a href="http://keionline.org/tpp/11may2015-ip-text">adopt a similar period of exclusivity</a>, together with a whole series of other onerous intellectual property provisions, such as requirements to allow patenting of diagnostic, therapeutic and surgical methods of treatment, and of new forms, uses, or methods of using medicines.</p>
<p>Importantly, Australia doesn’t currently have a market exclusivity provision for medicines. Instead, the local drug regulator, the Therapeutic Goods Administration (TGA), provides a “data protection” period of five years for all prescription medicines. During this time, a follow-on product can’t rely on the data submitted to the TGA to support the originator drug’s registration to gain marketing approval.</p>
<p>Without being able to rely on these data, follow-on manufacturers would be forced to repeat the often long – and always expensive – clinical trials required for marketing approval. Repeating the clinical trials would arguably be unethical, since the question of whether the drug is safe and efficacious has already been answered.</p>
<h2>Big savings</h2>
<p>Under existing legislation, the TGA can’t begin to evaluate a biosimilar application during the data protection period. So a follow-on product is unlikely to get to market until at least six years after the originator first enters it. Why then has all this been so important that it stalled the signing of a major trade agreement? </p>
<p>Biologics are used to treat various cancers, multiple sclerosis, a range of immunological conditions, as well as diabetes (insulin is a biologic). They’re the fastest growing segment of the pharmaceutical market globally. </p>
<p>When a biosimilar product is listed on Pharmaceutical Benefits Scheme (PBS) and becomes subsidised by the government, it automatically triggers a 16% price reduction on all versions of the product. Biologics are expensive, so this can amount to tens of millions of taxpayers’ dollars saved every year on just a single product.</p>
<p>Trade Minister Andrew Robb had <a href="http://trademinister.gov.au/releases/2013/ar_mr_131211.html">repeatedly said</a> Australia wouldn’t agree to any TPP provision that would undermine the PBS or go beyond the provisions of the Australia-US Free Trade Agreement (AUSFTA). And this meant holding the line at five years of data protection. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/97360/original/image-20151006-29251-aqhld.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/97360/original/image-20151006-29251-aqhld.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/97360/original/image-20151006-29251-aqhld.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/97360/original/image-20151006-29251-aqhld.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/97360/original/image-20151006-29251-aqhld.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/97360/original/image-20151006-29251-aqhld.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/97360/original/image-20151006-29251-aqhld.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Biologics are medicines derived from living organisms and include insulin.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/sriram/2219886844/">sriram bala/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>But <a href="http://www.citizen.org/documents/new-tpp-maneuvering-on-biotetch-drugs-september-2015.pdf">recent reports</a> have suggested negotiating countries have reached some form of compromise involving a formal period of data protection of five years (the status quo in Australia) with an additional period of up to three years of “safety monitoring” before a biosimilar can be registered. It’s unclear what precisely this would entail, other than representing a period of time in which a follow-on product would be prevented from entering the market. If it’s true, this would effectively become an eight-year market exclusivity period.</p>
<h2>No need</h2>
<p>The devil will be in the details of the agreement. But it’s difficult to see how any extension of monopoly protection could be accomplished without an amendment to Australia’s Therapeutic Goods Act. And that is likely to be politically challenging in an election year, particularly given widespread public concern over the potential for the biologics provision to increase PBS costs. </p>
<p>John Castellani, the president of PhRMA – the <a href="http://www.phrma.org/about#sthash.kfNux1E4.dpuf">Pharmaceutical Research and Manufacturers of America</a>, which represents that country’s biopharmaceutical researchers and biotechnology companies – is <a href="http://www.politicopro.com/financial-services/story/2015/10/the-tpp-deals-winners-and-losers-056514">reported to have said</a> that TPP ministers had:</p>
<blockquote>
<p>… missed the opportunity to encourage innovation that will lead to more important, life-saving medicines… This [12-year] term was not a random number, but the result of a long debate in Congress. </p>
</blockquote>
<p>The industry originally sought 14 years of exclusivity in the United States. 12 years was the outcome of prolonged political horse-trading. </p>
<p>But the industry has never put forward a convincing argument in support of longer periods of data exclusivity, nor any evidence that longer protection leads to new and better drug development. And the <a href="https://www.ftc.gov/sites/default/files/documents/reports/emerging-health-care-issues-follow-biologic-drug-competition-federal-trade-commission-report/p083901biologicsreport.pdf">US Federal Trade Commission said</a> as far back as 2009 that a market exclusivity period for biologics might not be warranted at all. It found there was no evidence of a lack of patentability of new biologic products, nor that market forces weren’t adequate to stimulate their development – two of the arguments often used to support longer data exclusivity. </p>
<h2>Horse trading</h2>
<p>The significance and endurance of the data protection issue in TPP negotiations can’t be overestimated. It was equally contentious in the <a href="http://dfat.gov.au/trade/agreements/ausfta/pages/australia-united-states-fta.aspx">2004 AUSFTA</a>, and it also went down to the wire then. </p>
<p>The issue then wasn’t about exclusivity for biologics, as the US hadn’t yet established a regulatory pathway for approval of biosimilars. Instead, the US pharmaceutical industry was pushing for an additional period of three years of data protection for new uses of existing medicines. This would have meant up to eight years of data protection for all prescription medicines in Australia. Had it been agreed to, it would have resulted in significant additional costs to the PBS. </p>
<p>Those who’ve waded through the <a href="http://dfat.gov.au/about-us/publications/trade-investment/australia-united-states-free-trade-agreement/Pages/chapter-seventeen-intellectual-property-rights.aspx">Intellectual Property Chapter of the AUSFTA</a> might be forgiven for thinking that Australia had actually agreed to the “five plus three” model. But a small footnote provides a kind of get-out-of-jail-free card for Australia, while still retaining the model in the negotiating template. </p>
<p>It refers to the fact that data protection in Australia is granted to combination products where at least one of the components has not been registered before. In the US, exclusivity is limited to combination products where none of the component products have previously been registered. The scope of protection in Australia is thus broader. This is retained as a quid pro quo for the extra data protection.</p>
<p>The obvious question then is whether there’s a similar “out” in the TPP text and, if so, what will the obligations be for other TPP countries? Another key question relates to the <a href="http://keionline.org/tpp/11may2015-ip-text">remainder of the TPP’s intellectual property chapter</a>, and which other expansions of intellectual property protection sought by the US have been agreed to. </p>
<p>Before we can begin to breathe more easily on biologics, we need to know what Australia has horse-traded in other chapters of the agreement to get an “acceptable” outcome on this issue. But it will be some weeks yet before we can find out.</p><img src="https://counter.theconversation.com/content/48595/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ruth Lopert does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Before the last round of negotiations, only a handful of issues remained in the way of concluding the TPP. A potential deal-breaker for Australia was intellectual property protections for biologics.Ruth Lopert, Adjunct professor, Department of Health Policy & Management, George Washington UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/456482015-08-05T20:17:14Z2015-08-05T20:17:14ZHow the battle over biologics helped stall the Trans Pacific Partnership<p>Talks that were meant to finalise the Trans Pacific Partnership wound up in Hawaii late last week <a href="http://www.abc.net.au/news/2015-08-01/trans-pacific-partnership-delegates-fail-to-reach-final-deal/6665204">without reaching</a> a final deal. Over the last five years, 12 countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – have been involved in negotiating the final text of the deal.</p>
<p>Despite the setback, there will be a strong push to sort out the remaining issues in August. After that the Canadian and US election cycles will make further progress in negotiating the trade deal next to impossible. And one of the most highly charged matters negotiators will be trying to resolve is intellectual property protections for medicines.</p>
<p>Over the next few weeks, Australia’s trade minister, <a href="http://www.andrewrobb.com.au">Andrew Robb</a>, will be under intense pressure to renege on the government’s oft-repeated commitment to <a href="http://trademinister.gov.au/releases/2013/ar_mr_131211.html">reject anything in the deal</a> that could undermine the <a href="http://www.pbs.gov.au/pbs/home">Pharmaceutical Benefits Scheme</a> (PBS) or increase the cost of medicines for Australians.</p>
<h2>Data exclusivity</h2>
<p>A key issue affecting drugs is the length of the data-exclusivity period for a class of medicines called biologics, which are produced from living organisms. Biologics include many new and very expensive cancer medicines, such as Keytruda, a melanoma drug <a href="http://www.pm.gov.au/media/2015-06-28/new-drug-listing-keytruda-treat-melanoma">recently listed on the PBS</a>. Without the PBS subsidy, it would cost over A$150,000 to treat a patient for a year.</p>
<p>Data exclusivity refers to the protection of clinical trial data submitted to regulatory agencies from use by competitors. It’s a different type of monopoly protection to patents. While a product is covered by data exclusivity, manufacturers of cheaper follow-on versions of the product can’t rely on the clinical trial data produced by the originator of the drug to support the marketing approval of their product. </p>
<p>Section 25a of Australia’s <a href="https://www.comlaw.gov.au/Details/C2015C00086">Therapeutic Goods Act</a> provides for five years of data exclusivity for all medicines. It makes no distinction between biologics and other drugs. Data exclusivity provides an absolute monopoly that, unlike a patent, can’t be revoked or challenged in court. </p>
<p>The powerful biopharmaceutical industry lobby in the United States has been seeking <a href="http://phrma.org/note-media-elected-officials-support-12-years-data-protection-tpp">12 years of market exclusivity for biologics</a>. </p>
<p>Facing intense opposition from all other countries, the US trade representative fell back this week to eight years. While this was heralded as a new level of “flexibility” in the US position, in reality it remains <a href="http://www.ip-watch.org/2015/07/27/decision-time-on-biologics-exclusivity-eight-years-is-no-compromise/">a significant extension of intellectual property rights</a> in most of the TPP countries.</p>
<p>Thus far, the Australian delegation has apparently maintained the position that it will not go beyond existing domestic law. Days before the talks broke up, the trade minister indicated in <a href="http://www.abc.net.au/radionational/programs/breakfast/andrew-robb-on-the-trans-pacific-partnership/6655730">an interview on ABC Radio National</a> that he didn’t see the sense in accepting a longer monopoly for biologics.</p>
<h2>Good reasons to not budge</h2>
<p>Three factors are likely to be contributing to this resolve. The first is the costs of extending monopolies. These are likely to be <a href="http://dfat.gov.au/trade/agreements/tpp/submissions/Documents/tpp_sub_gleeson_lopert_moir.pdf">hundreds of millions of dollars a year</a> in the short term and could rise exponentially in the longer term as patents gradually expire on biologics already listed on the PBS.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/90718/original/image-20150804-15146-gcmhrq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/90718/original/image-20150804-15146-gcmhrq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/90718/original/image-20150804-15146-gcmhrq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/90718/original/image-20150804-15146-gcmhrq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/90718/original/image-20150804-15146-gcmhrq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/90718/original/image-20150804-15146-gcmhrq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/90718/original/image-20150804-15146-gcmhrq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Without a PBS subsidy, some new medications could cost patients thousands of dollars for a course of treatment.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/the_smileyfish/4018251978/in/photolist-785Ajw-aZeeWr-aYKsUT-aYJjWz-ppcfho-rmg8NM-2Fpbw2-JcsvK-Jcmvo-Jcm7y-8bmupc-9iavuh-44Nbp-4cQ2kF-nLnHsk-nrTkA1-9wYiDe-9x2iEQ-PcucF-dNUoaq-4jyVng-8EGNH-5Xe6m-89nPNh-5ybjn2-Jcsd2-JcmoY-9kZQPN-a2No9t-4EG4Jr-rS6tuE-8BVyEV-Jcmem-oDJSem-3cqncc-4MEcz-7LdwMs-3qiSoa-4HcEMQ-3cuGyW-apMGH2-8i6Wky-6Hmb7b-5WHQvU-bcMb2t-6C7jw-8XQ8a1-8XQ82C-8XQ7rh-781G7c">Toni Fish/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Another pressing consideration is the degree of political opposition to longer medicine monopolies in Australia. Extending the period of data exclusivity would require an amendment to the <a href="https://www.comlaw.gov.au/Details/C2015C00086">Therapeutic Goods Act</a> – a move Labor, the Greens and many independents would strongly oppose. And the failure to get implementing legislation through the Senate could compromise the whole deal.</p>
<p>The third factor is the lack of progress in bargaining for access to US markets; the US reportedly <a href="http://www.afr.com/business/agriculture/us-sugar-paying-millions-to-shut-out-australia-from-tpp-20150803-giqrog">made only a token offer on sugar</a> and <a href="http://www.smh.com.au/federal-politics/political-news/transpacific-partnership-deal-in-doubt-20150731-gioyho.html">withdrew an earlier offer on dairy</a> products.</p>
<p>Eight years of data exclusivity won’t be an appealing option for any of the other TPP countries, with the exception of Japan and Canada, which already allow for eight years. New Zealand’s trade minister recently faced outrage at home over <a href="http://www.radionz.co.nz/news/political/279879/tpp-key-admits-medicine-costs-will-rise">admissions that the cost of medicines may be expected to increase</a> after the agreement. The country’s opposition, also Labor, has declared it won’t support a deal that raises the costs of medicines.</p>
<p>The US stance itself is contradictory as the Obama administration has been <a href="http://www.canberratimes.com.au/comment/tpp-could-force-australia-to-americanstyle-health-system-20150625-ghxdes.html">trying to reduce the exclusivity period for biologics</a> to seven years, to speed up the availability of cheaper alternatives and save an estimated US$16 billion in the next decade.</p>
<p>It seems clear to everyone except US negotiators – and biopharmaceutical industry lobbyists – that the demand for extending data exclusivity for biologics needs to be dropped if the TPP is to be finalised.</p><img src="https://counter.theconversation.com/content/45648/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Deborah Gleeson receives funding from the Australian Research Council. She has received funding from various national and international non-government organisations to attend speaking engagements related to trade agreements and health, including the TPP. She has represented the Public Health Association of Australia on matters related to the TPP, including at the recent TPP negotiations in Maui.</span></em></p><p class="fine-print"><em><span>Ruth Lopert does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Over the next few weeks, the trade minister will be under intense pressure to renege on the government’s commitment to reject anything in the Trans Pacific Partnership that could undermine the PBS.Deborah Gleeson, Lecturer in Public Health, La Trobe UniversityRuth Lopert, Adjunct professor, Department of Health Policy & Management, George Washington UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/428852015-06-07T23:24:18Z2015-06-07T23:24:18ZRCEP: the trade agreement you’ve never heard of but should be concerned about<figure><img src="https://images.theconversation.com/files/84076/original/image-20150605-14111-1ynw3iv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">If the proposals are agreed, they could delay the market entry of generic medicines in the region – and the impact will be felt around the world. </span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-197380862/stock-photo-pills-and-bottle.html?src=VByEnkSCYAlyfaEGurXX1A-1-4">Jeng_Niamwhan</a></span></figcaption></figure><p>You’ve probably heard of the controversial and secret <a href="https://theconversation.com/au/topics/trans-pacific-partnership">Trans Pacific Partnership Agreement</a> (TPP) negotiations, which have generated concerns in many quarters. </p>
<p>Nobel Prize-winning economist Joseph Stiglitz has <a href="http://www.nytimes.com/2015/01/31/opinion/dont-trade-away-our-health.html?_r=1">highlighted</a> serious risks the agreement may reduce access to medicines and health care. United States Senator Elizabeth Warren <a href="http://www.washingtonpost.com/opinions/kill-the-dispute-settlement-language-in-the-trans-pacific-partnership/2015/02/25/ec7705a2-bd1e-11e4-b274-e5209a3bc9a9_story.html">has rebuked</a> the inclusion of dispute clauses that would enable corporations to sue governments if their policies negatively affected profits. And <a href="http://www.theguardian.com/australia-news/2015/may/22/labor-greens-and-crossbenchers-concerned-at-trans-pacific-partnership">several Australian parliamentarians</a> have raised concerns at the lack of transparency surrounding the negotiations. </p>
<p>Meanwhile, negotiations for another trade agreement, equally shrouded in secrecy, are raising alarm among <a href="http://dfat.gov.au/trade/agreements/rcep/Documents/public-health-association-of-australia-rcep.pdf">health</a> and <a href="http://msfaccess.org/sites/default/files/MSF%20RCEP%20letter%20India%2022Aug2014.pdf">humanitarian</a> organisations.</p>
<p>Obscurely named the <a href="http://dfat.gov.au/trade/agreements/rcep/Pages/regional-comprehensive-economic-partnership.aspx">Regional Comprehensive Economic Partnership (RCEP)</a>, this agreement encompasses ASEAN (Association of Southeast Asian Nations) members and their trading partners: Australia, Brunei, Cambodia, China, India, Indonesia, Laos, Malaysia, Myanmar, New Zealand, Japan, the Philippines, Singapore, South Korea, Thailand, and Vietnam. The United States is notably absent.</p>
<p>Seven rounds of negotiations have already taken place with virtually no public debate. The next round of negotiations begins today in Kyoto, Japan.</p>
<p>The RCEP emerged in the context of China’s exclusion from the TPP. RCEP recognises “<a href="http://www.asean.org/images/2012/documents/Guiding%20Principles%20and%20Objectives%20for%20Negotiating%20the%20Regional%20Comprehensive%20Economic%20Partnership.pdf">ASEAN centrality</a>” in the region and aims to strengthen economic cooperation among participating countries. </p>
<p>Like other recent bilateral and regional trade agreements, the RCEP’s scope is broad, going beyond trade in goods and services to investment, economic and technical cooperation, intellectual property (IP), competition, dispute settlement and other issues related to government regulation.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/84078/original/image-20150605-14141-c2jm1h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/84078/original/image-20150605-14141-c2jm1h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/84078/original/image-20150605-14141-c2jm1h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/84078/original/image-20150605-14141-c2jm1h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/84078/original/image-20150605-14141-c2jm1h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/84078/original/image-20150605-14141-c2jm1h.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/84078/original/image-20150605-14141-c2jm1h.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">RCEP recognises ‘ASEAN centrality’ in the region.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-203738356/stock-photo-perspective-view-of-national-flags-of-southeast-asia-countries-aec-asean-economic-community.html?src=voJ_HmZtSPLXMkD_Jpw5eQ-1-13">OPgrapher/Shutterstock</a></span>
</figcaption>
</figure>
<p>In contrast to the TPP, RCEP was expected to be <a href="http://www.aspistrategist.org.au/trade-partnership-competition-tpp-vs-rcep/">more favourable</a> to low and middle-income countries in the region – with fewer demands for regulatory harmonisation and slower reductions in trade barriers, particularly for least developed countries. </p>
<p>But recent leaks of negotiating texts proposed by Japan and South Korea for an IP chapter raise serious concerns for access to medicines across the globe. </p>
<p>In February, a leaked <a href="http://keionline.org/sites/default/files/RCEP_WGIP_JP_Revised_Draft_Text_3Oct2014.pdf">Japanese text</a> (dated October 2014) proposed monopoly protections beyond both the obligations of <a href="https://www.wto.org/english/tratop_e/trips_e/intel2_e.htm">existing IP agreements</a> and IP laws of many RCEP countries. Particularly controversial are provisions that:</p>
<ul>
<li>broaden and lengthen patent monopolies</li>
<li>extend restrictions on the use of clinical trial data to support the marketing approval of generic medicines</li>
<li>enable the seizure of generic medicines in transit, even those only suspected of infringing IP laws in the transit country. </li>
</ul>
<p>On June 3, a leaked <a href="http://keionline.org/node/2239">South Korean IP proposal</a> revealed several provisions that would award additional privileges to the pharmaceutical industry. These include patent term extensions, the seizure of suspected IP infringing medicines in “trans-shipment” and, equally worrying, damages for patent infringements determined according to the value asserted by the patent owner.</p>
<p>If these proposals are agreed, they could delay the market entry of generic medicines in the region – and the impact will be felt around the world. </p>
<p>India and China are <a href="http://www.unicef.org/supply/files/UNICEF_Supply_Annual_Report_2013.pdf">major suppliers of generic medicines</a> for the world’s poor. The role of Indian generic firms in substantively lowering the price of HIV medicines is well known. Indian firms continue to supply the <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2944814/">majority of these</a> for low and middle-income countries. This has been possible because India’s intellectual property laws balance private rights with the public interest. </p>
<p>India, for example, does not grant patents for new forms or new uses of a known substance. This has prevented unnecessary extensions of patent monopolies on some cancer drugs – a move praised by health advocacy groups such as <a href="http://www.msfaccess.org/content/about-novartis-drop-case-campaign">Médecins Sans Frontières </a> as a major victory for access to affordable medicines. These safeguards would be lost if India and RCEP countries agree to Japan’s proposal. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/84080/original/image-20150605-14135-rw1ig9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/84080/original/image-20150605-14135-rw1ig9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/84080/original/image-20150605-14135-rw1ig9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/84080/original/image-20150605-14135-rw1ig9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/84080/original/image-20150605-14135-rw1ig9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/84080/original/image-20150605-14135-rw1ig9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/84080/original/image-20150605-14135-rw1ig9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">India IP laws safeguard access to affordable medicines.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/trinitycarefoundation/15649288739/in/photolist-pQSGk6-pEQm5A-bogzjZ-fNkhZN-4zaV5Q-cgpG9W-7eDnkC-4z6Dzv-8Docg2-7WuTeK-chx6K-4zaUY5-2WheR9-8wEzkb-8wEzhS-iurgRw-gmvnsf-h8JSb-dDBFZ6-7DwoSE-cCWGom-dvghnb-dvaGpH-dvgibb-dvaHBz-dvghdo-dvghYQ-dvaGnv-dvaK3R-dvgjW9-dvghvf-dvaGVV-dvgiLE-dvaJva-cN8aVU-bVtkFe-ccQAe9-ccPCrb-4stzX1-8wBz6a-ibamw-jwn6jX-jworaK-jworbB-bfv332-bomHeX-7vqzX1-7vmLfx-jwornP-B1d7z">Trinity Care Foundation/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>It’s also crucial that other low and middle-income countries such as Thailand and the Philippines do not agree to these types of provisions. Despite their key roles as generics suppliers, the <a href="http://unctad.org/en/Docs/diaepcb2011d5_en.pdf">UN Conference on Trade and Development</a> has suggested that large Indian generic firms are looking to wealthier markets, which could ultimately put at risk supplies of cheap generics to poorer countries such as these.</p>
<p>While Australia introduced several of the proposed measures some years ago, a 2013 <a href="http://www.ipaustralia.gov.au/pdfs/2013-05-27_PPR_Final_Report.pdf">independent Pharmaceutical Patents Review</a> concluded that Australia should reduce the length of patent term extensions. Clearly it would be wise for Australia to reject any measures that could preclude much-needed IP reform in future. </p>
<p>It’s not in Australia’s interest to support the inclusion of these IP measures in the RCEP, but we <a href="http://media.wix.com/ugd/b629ee_dc2d50d5c60843078d84763cda867f35.pdf">don’t have a good track record</a> in protecting the public interest amidst pressure from corporate actors and powerful states. It’s therefore important the treaty text be released before being endorsed by Cabinet, to give sufficient time for independent assessment before it’s ratified. </p>
<p>Last week, a <a href="http://www.ohchr.org/FR/NewsEvents/Pages/DisplayNews.aspx?NewsID=16031&LangID=E">group of UN experts</a> raised serious concerns over the detrimental impact trade agreements can have on human rights, recommending that trade and investment agreement negotiations be conducted transparently, with active consultation with labour unions, consumer organisations, environmental protection groups and health professionals. This is vitally important in the context of the RCEP negotiations if we are to preserve access to affordable medicines across the globe.</p><img src="https://counter.theconversation.com/content/42885/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Belinda Townsend is a member of the People's Health Movement and the Public Health Association of Australia. She has been involved in the Public Health Association of Australia's advocacy on matters relating to trade agreements. </span></em></p><p class="fine-print"><em><span>Deborah Gleeson receives funding from the Australian Research Council. She has received funding from various national and international non-government organisations to attend speaking engagements related to trade agreements and health. She has represented the Public Health Association of Australia on matters related to trade agreements.</span></em></p><p class="fine-print"><em><span>Ruth Lopert does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Seven rounds of negotiations for the Regional Comprehensive Economic Partnership have already taken place with virtually no public debate. The next round of negotiations begins today in Kyoto, Japan.Belinda Townsend, Sessional Academic, Deakin UniversityDeborah Gleeson, Lecturer in Public Health, La Trobe UniversityRuth Lopert, Adjunct Professor, Department of Health Policy & Management, George Washington UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/397992015-04-09T20:40:50Z2015-04-09T20:40:50ZLeaked TPP investment chapter shows risks to Australia’s health<p>Amid ongoing speculation about the prospects for the Trans Pacific Partnership Agreement (TPP), Wikileaks published another confidential chapter last week, this time on investment. And like almost everything we know about the secretive negotiations for the agreement, the leaked chapter provides plenty of cause for concern.</p>
<p>The leaked <a href="https://wikileaks.org/tpp-investment/">late-stage draft of the investment chapter</a> contains information about the agreement’s investor-state dispute settlement (ISDS) clause. Clauses like this give investors direct access to international arbitration, where they can bring claims against a government over regulatory measures they think may damage their bottom line. </p>
<p>The chapter has a footnote saying Australia is exempt from ISDS, but that may change “subject to certain conditions”. The leaked draft doesn’t indicate the exact nature of these conditions, and the footnote remains in brackets, indicating the issue has not yet been settled.</p>
<p>The Minister for Trade and Investment, Andrew Robb, has repeatedly said the TPP will not adversely affect health policy. In a <a href="http://www.abc.net.au/news/2015-03-17/trans-pacific-partnership-details-will-be/6327068">recent interview</a> with ABC TV, he said the government had insisted on carveouts for health and environmental public policy decisions from investor-state dispute settlement clauses. </p>
<p>But the leaked draft shows these carveouts (which are still under negotiation) are limited to specific areas such as the Pharmaceutical Benefits Scheme, Medicare Benefits Scheme, Therapeutic Goods Administration and the Office of the Gene Technology Regulator. </p>
<h2>ISDS health concerns</h2>
<p>An independent <a href="http://hiaconnect.edu.au/research-and-publications/tpp_hia/">health impact assessment</a> of the TPP negotiations conducted by Australian academics and non-government organisations published in February 2015 found the ISDS clause presents a significant threat to health policy. </p>
<p>Part of the problem is that the TPP defines investments very broadly to include intangible assets and intellectual property, such as trademarks and patents. These kinds of assets are at the heart of current ISDS cases contesting <a href="http://www.italaw.com/cases/851">Australia’s plain packaging laws</a> and <a href="http://www.italaw.com/cases/1625">Canada’s decisions about what medicines can be patented</a>.</p>
<p>Such claims can result in large-scale costs for taxpayers. Not only do the awards for investor-state cases often amount to hundreds of millions of dollars, <a href="http://www.italaw.com/cases/1625">according to the OECD</a> the average cost of fighting a claim is US$8 million. </p>
<p>Another issue that has health advocates worried is the potential “chilling effect” of investor-state dispute settlement mechanisms; the prospect that governments may be deterred from implementing innovative health policies and laws that may be contested by corporations using ISDS clauses. </p>
<p>Director-General of the World Health Organization, Margaret Chan <a href="http://www.who.int/dg/speeches/2012/tobacco_20120320/en/">noted in 2012</a> that legal actions against Uruguay, Norway and Australia were “deliberately designed to instill fear” in countries trying to reduce smoking. <a href="http://www.nytimes.com/2013/12/13/health/tobacco-industry-tactics-limit-poorer-nations-smoking-laws.html?pagewanted=all&_r=3&">Uruguay has publicly acknowledged</a> that it would have had to drop its tobacco control law and settle with Philip Morris if it didn’t have financial support from a foundation set up by Michael Bloomberg.</p>
<h2>Protecting health?</h2>
<p>In addition to the carveouts for specific health programs, the TPP contains purported “safeguards” to protect health and the environment. But these safeguards have also drawn strong criticism, in particular, from eight health and community organisations who wrote to the trade minister last week to <a href="http://www.phaa.net.au/documents/150401%20Letter%20to%20Minister%20Robb%20re%20proposed%20investment%20chapter%20of%20the%20TPP.pdf">outline their concerns</a>.</p>
<p>One of the main concerns centres on the safeguard related to “indirect expropriation”. While Australian law protects against direct expropriation – the seizure of assets by government – the TPP goes further to include instances where a government’s actions have a negative impact on an investment, but do not result in a transfer of property to the state. </p>
<p>The broader scope of expropriation under ISDS in the <a href="http://www.legislation.gov.hk/IPPAAustraliae.PDF">Hong Kong - Australia bilateral investment treaty</a>, for instance, has enabled Philip Morris to contest Australia’s tobacco plain packaging through international arbitration even though <a href="http://www.hcourt.gov.au/assets/publications/judgment-summaries/2012/hca43-2012-10-05.pdf">the High Court determined</a> that there had been no acquisition of property by the state under Australian law.</p>
<p>To safeguard against abuse of this provision, the TPP includes an annex that appears to exempt “non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety and the environment…”. But any protective effect intended by this clause may be undermined by the added phrase “…except in rare circumstances.”</p>
<p>This loophole, which invites corporations to argue that their circumstances are rare, is being used in a <a href="http://www.italaw.com/cases/2110">case against Costa Rica</a> over a national park established to protect the nesting grounds of the endangered giant leatherback sea turtle. Nine US investors lodged a dispute, seeking over US$36.5 million in compensation, when Costa Rica suspended development permits for beachfront land within the national park boundaries. The case has yet to be decided.</p>
<p>Another proposed exemption – this time for compulsory licenses – is also <a href="https://www.citizen.org/documents/tpp-investment-chapter-and-access-to-medicines.pdf">highly problematic</a>. Compulsory licences are important mechanisms for ensuring access to medicines, as they allow patents to be bypassed in circumstances such as public health emergencies. But the wording of the exemption in the TPP would allow corporations to argue a compulsory license is not compliant with World Trade Organization rules. Or with the intellectual property chapter of the TPP, which actually provides more expansive rights for corporations. This could create a situation where WTO rules could be interpreted and enforced outside the more flexible and accountable state-state dispute settlement mechanism of the WTO itself.</p>
<p>Other safeguards, such as the explicit link drawn between a clause promising investors “fair and equitable treatment” and customary international law (international obligations that arise from established state practice), <a href="https://www.iisd.org/itn/2013/03/22/a-distinction-without-a-difference-the-interpretation-of-fair-and-equitable-treatment-under-customary-international-law-by-investment-tribunals/">may also prove insufficient</a>. Such a safeguard was <a href="http://www.sice.oas.org/tpd/nafta/Commission/CH11understanding_e.asp">introduced by the parties to the North American Free Trade Agreement in 2001</a> but this did not prevent the tribunal in the recent <a href="http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/disp-diff/clayton-12.pdf">Clayton/Bilcon case</a> from finding that customary international law in this area has evolved over time in a manner that is more in line with the investor’s interpretation, than with that of Canada’s government. The tribunal has yet to make a decision on damages, but the company is seeking US$300 million. </p>
<p>The problems and loopholes characterising the latest leaked TPP draft throw doubt on the government’s claims that it’s taking the concerns of health stakeholders as seriously as the interests of big transnationals. And they highlight exactly why it’s vital for the draft text to be made public and subjected to independent scrutiny before it is signed. Indeed, it would be safer to exclude ISDS from the TPP altogether. </p>
<p>Minister Robb asks us to trust his assurances that Australian health policy will not be negatively affected by this trade agreement. But this latest leaked draft does little to inspire such trust.</p><img src="https://counter.theconversation.com/content/39799/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Deborah Gleeson receives funding from the Australian Research Council. She has received funding from various national and international non-government organisations to attend speaking engagements related to trade agreements and health, including the TPP. She has represented the Public Health Association of Australia on matters related to the TPP.</span></em></p><p class="fine-print"><em><span>Kyla Tienhaara receives funding from the Australian Research Council.</span></em></p><p class="fine-print"><em><span>Sharon Friel receives funding from the Australian Research Council and the National Health and Medical Research Council.</span></em></p>The latest part of the TPP to be leaked is its investment chapter. And like almost everything we know about the secretive negotiations for the agreement, it provides plenty of cause for concern.Deborah Gleeson, Lecturer in Public Health, La Trobe UniversityKyla Tienhaara, Research Fellow Regulatory Institutions Network (RegNet), Australian National UniversitySharon Friel, Director and Professor of Health Equity, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/204412013-11-20T08:17:17Z2013-11-20T08:17:17ZTrade pact would make internet services more expensive<figure><img src="https://images.theconversation.com/files/35645/original/yxcmdd6v-1384911458.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There are doubts provisions will benefit copyright holders.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>Last week Michael Froman, a US trade representative, <a href="http://variety.com/2013/biz/news/u-s-trade-representative-says-pending-pact-has-zero-to-do-with-sopa-1200838860/">took</a> his son touring around the Paramount lot in Hollywood to visit a sound mixing stage, watch a movie and pose for happy snaps with company executives.</p>
<p>The VIP movie lot tour, with personal touches, illustrates how close the <a href="http://www.ustr.gov/">US trade office</a> and the movie production companies have become, and exactly who is pushing for a <a href="https://theconversation.com/topics/trans-pacific-partnership">controversial trade agreement</a> with 11 Pacific Rim countries including Australia. </p>
<p>The innocuously named Trans-Pacific Partnership (TPP) is about expanding the revenues of large Hollywood movie companies and music publishers.</p>
<p>The TPP may effectively force the entire Internet Service Provider (ISP) industry to become the street cops for the movie and music industry. This will be expensive and intrusive. </p>
<p>Specifically the TPP may force ISPs to:</p>
<ul>
<li><p>‘filter’ all their internet communications, prowling through all our online interactions on the hunt for any possible copyright infringement</p></li>
<li><p>hand over the identity of alleged infringers – not to the police – but to the copyright holders (usually the movie or music companies)</p></li>
<li><p>censor sites that could possibly be engaged in copyright infringement</p></li>
</ul>
<p>ISP customers could suddenly have their accounts terminated where complaints against them for infringement have been made.</p>
<p>Having ISPs monitor copyright infringement is the equivalent of a shoplifter stealing a CD from a music store, driving away down a toll road, and then expecting the private tollway operator to stop and search every car on the highway for stolen goods. This is not the tollway operator’s responsibility.</p>
<p>The motion picture and music publishing industries should pay for and manage their own security to protect their commercial goods, just as a department store pays to put security tags on its dresses.</p>
<p>Or better still they could simply trial new models for making money in the face of technology-led change.</p>
<p>The TPP is the latest in a long line of heavy-handed manoeuvring by US companies. Before this was the <a href="https://www.eff.org/issues/dmca">Digital Millenium Copyright Act</a> and the much reviled <a href="http://www.theglobalmail.org/blog/for-our-information-politicians-need-to-let-go/544/">SOPA</a>. </p>
<p>The revelations of just how draconian the TPP’s provisions are have caused uproar in other close allies, generating <a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11158663">this damning editorial in the New Zealand Herald</a>. </p>
<p>In the US, <a href="https://www.eff.org/issues/tpp">citizens groups</a> are vocally objecting because the TPP does not benefit Americans so much as a handful of American companies at the cost of American citizens.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/35644/original/3z2q76tx-1384911288.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/35644/original/3z2q76tx-1384911288.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=360&fit=crop&dpr=1 600w, https://images.theconversation.com/files/35644/original/3z2q76tx-1384911288.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=360&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/35644/original/3z2q76tx-1384911288.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=360&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/35644/original/3z2q76tx-1384911288.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=453&fit=crop&dpr=1 754w, https://images.theconversation.com/files/35644/original/3z2q76tx-1384911288.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=453&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/35644/original/3z2q76tx-1384911288.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=453&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Last year the High Court of Australia found ISPs could not be asked to police the illegal downloads of subscribers.</span>
<span class="attribution"><span class="source">AAP/Dan Peled</span></span>
</figcaption>
</figure>
<p>One of the most insidious aspects of the TPP is how it will override Australian sovereignty. </p>
<p>Last April, the High Court of Australia made a ruling on the issue of whether ISPs should be liable if a user downloads illegal content in the iiNet ISP <a href="http://www.austlii.edu.au/au/cases/cth/HCA/2012/16.html">case</a>. </p>
<p>The court found iiNet had no direct technical power to prevent users from obtaining content illegally. </p>
<p>While iiNet could terminate an infringing client’s account, it was still possible for that same client to open up a new internet account elsewhere and access infringing material, the Court said.</p>
<blockquote>
<p>“this circumstance shows the limitations on iiNet’s power to command a response from its customers, or to prevent continuing infringements by them.” – High Court ruling</p>
</blockquote>
<p>In this landmark case, iiNet had refused to act on “take-down” notices because the information provided in those notices was not sufficient. The TPP would override this ruling.</p>
<p>The TPP would encourage large US companies to go on extended fishing exercises though the customer lists of Australian ISPs, an expensive exercise for the ISP and the customer. </p>
<p>If the customer is an infringer, they simply move on to another provider. Meanwhile the Australian ISP has had to engage in a fruitless and expensive exercise to monitor the content, and at the same time has lost a subscriber.</p>
<p>The TPP will ask ISPs to police what is un-policeable, and the only people punished will be the ISPs and the subscriber, with little to no proven impact on the bottom line of the copyright holder. </p>
<p>If the foreign music and movie industries are worried about piracy, they can decide to invest in improving their product’s security – like any other business does. It is neither fair nor right they should ask any other industry to pay what should rightly be their own expense.</p>
<p>Most worrying is the larger social impact. The TPP would negatively impact on freedom of expression. It would create another level of surveillance on the subscriber and prevent an ISP from selling its service free from intervention. </p>
<p>And it would make access to the internet more expensive as ISPs would increase charges to cover the new requirements. </p>
<p>The internet is our most important communication tool; making it harder to access or use impacts negatively on freedom of speech.</p>
<p>Attorney General George Brandis recently declared himself a champion of free <a href="http://www.smh.com.au/federal-politics/political-news/jewish-leaders-raise-fears-over-george-brandis-race-hate-law-changes-20131114-2xjof.html">speech</a>, and evidenced this with plans to peel back racial discrimination laws. Will he prove himself the same free speech advocate when it comes to protecting ISPs and the internet?</p>
<p>The TPP is bad for Australian businesses, the economy, and most importantly of all, consumers.</p>
<hr>
<p><em>This is the fifth piece in our series on the Trans-Pacific Partnership.</em></p>
<p><em>Read the other pieces:</em></p>
<p><a href="https://theconversation.com/when-trade-agreements-threaten-sovereignty-australia-beware-18419">When trade agreements threaten sovereignty: Australia beware</a></p>
<p><a href="https://theconversation.com/multilateral-regional-bilateral-which-agreement-is-best-19664">Multilateral, regional, bilateral: which agreement is best</a></p>
<p><a href="https://theconversation.com/the-trans-pacific-partnership-and-australias-right-to-know-20334">The Trans-Pacific Partnership and Australia’s right to know</a></p>
<p><a href="https://theconversation.com/ip-trade-negotiations-a-prescription-for-harm-20141">IP trade negotiations a prescription for harm</a></p><img src="https://counter.theconversation.com/content/20441/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Suelette Dreyfus does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Last week Michael Froman, a US trade representative, took his son touring around the Paramount lot in Hollywood to visit a sound mixing stage, watch a movie and pose for happy snaps with company executives…Suelette Dreyfus, Research Fellow, Department of Computing and Information Systems, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/162792013-07-24T04:37:55Z2013-07-24T04:37:55ZTrans-Pacific Partnership rules could block alcohol warnings<figure><img src="https://images.theconversation.com/files/27958/original/pk4hfxj9-1374637434.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Australian government appears to be contemplating signing a version of the agreement that would restrict its power to apply strong health warnings to alcohol products.</span> <span class="attribution"><span class="source">camknows/Flickr</span></span></figcaption></figure><p>New rules for alcohol labelling were discussed in Malaysia earlier this week by countries negotiating the <a href="http://www.dfat.gov.au/fta/tpp/">Trans-Pacific Partnership</a>. The proposed rules could stymie the introduction of effective health warnings on alcohol products in all the countries involved.</p>
<p>The Trans-Pacific Partnership is a regional trade agreement being negotiated between 12 Pacific Rim countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. </p>
<p><a href="http://www.dfat.gov.au/fta/tpp/">Australia’s</a> representatives have high hopes for the agreement, seeing it as the pathway to a free-trade area in the Asia-Pacific that could rival the European Union in value.</p>
<p>But the talks have been highly controversial, in part due to concerns about the effects the pact could have on many areas of public health, such as access to medicines and tobacco control. </p>
<p>And news that the agreement’s proposed text includes an annex on the labelling of wine and distilled spirits is raising concerns among Australian alcohol policy and public health groups because it could block effective health warnings on alcohol containers.</p>
<h2>Curbing harm</h2>
<p>A matter of months after introducing the world’s first tobacco <a href="https://theconversation.com/topics/plain-packaging">plain packaging laws</a>, the Australian government appears to be contemplating signing a version of the agreement that would restrict its power to apply strong health warnings to alcohol products. </p>
<p>This apparent blind spot may be due to perceptions that alcohol is not an intrinsically harmful product and an important export commodity. Alcohol certainly has strong <a href="https://theconversation.com/a-brief-history-of-alcohol-consumption-in-australia-10580">cultural and social significance</a> in Australian society. </p>
<p>But its harmful use is associated with large-scale health, social and economic costs for our country. Indeed, the cost of alcohol’s harm to people other than the drinker was estimated in 2010 at <a href="http://www.fare.org.au/research-development/featured-research/alcohols-harm-to-others/">$36 billion a year</a>. </p>
<p>Having warning labels on alcoholic beverage containers is considered an effective way to reduce alcohol-related harm. </p>
<p>The <a href="http://www.who.int/substance_abuse/activities/gsrhua/en/">World Health Organisation</a> has recommended alcohol warning labels. So too have several <a href="http://www.preventativehealth.org.au/internet/preventativehealth/publishing.nsf/Content/nphs-overview">Australian government inquiries</a>, which have emphasised that the government should mandate such warnings, rather than leaving it to the alcohol industry to voluntarily implement warnings. </p>
<p>The industry does not have a strong track record on labelling. In June 2011, the alcohol industry-funded body, DrinkWise, <a href="http://www.drinkwise.org.au/2011/07/new-consumer-messages-on-alcohol-products/">launched a voluntary system</a> of consumer information on alcohol labels. </p>
<p>A review undertaken 12 months later by the Foundation for Alcohol Research and Education found that only <a href="http://www.fare.org.au/wp-content/uploads/2011/07/FARE-Labelling-Market-Testing-Report.pdf?9d7bd4">16% of the 250 products sampled</a> carried any DrinkWise consumer messages.</p>
<p>Of the products that featured a DrinkWise message, the information took up less than 5% of the label or face of the packaging in 98% of cases. Only one product put the warning on the front of the bottle. Brewers also placed warnings on the bottom of six-packs and cartons of beer. </p>
<p>The government announced in June 2013 that it would review industry efforts to introduce pregnancy-related health warnings on alcohol. If the results are similar to those found by FARE in June 2012, there is a compelling case for the government to legislate for mandatory warning labels.</p>
<h2>Effective warnings</h2>
<p>Any mandatory labelling scheme should consider the substantial evidence from tobacco control about what type of design is most effective and where labels are best placed on products to get the message across. </p>
<p>Based on a review of the available evidence, the Foundation for Alcohol Research and Education <a href="http://www.fare.org.au/wp-content/uploads/2011/07/AER-Policy-Paper_FINAL.pdf">has suggested</a> that text and graphic health warnings should be placed on the front of the product, be horizontal in direction, cover a large proportion of the label, and have a minimum font and label size.</p>
<p>But the Trans-Pacific Partnership rules being considered may prevent countries from mandating health warnings in line with these principles. The Technical Barriers to Trade chapter of the agreement potentially presents two obstacles with introducing effective alcohol health warnings.</p>
<p>The first problem is that the terms of this chapter may make it more difficult for governments to introduce public health policies that have not been tried before and proven to work. Under a rule like this, plain packaging for tobacco products would never have been implemented.</p>
<p>This is often a problem for countries that are first in trying an innovative public health approach. But unless there’s some leeway to try new approaches, how are advances in health to be made?</p>
<p>The second potential problem is that the text in the Trans-Pacific Partnership applying to alcohol products may be modelled on the <a href="http://ita.doc.gov/td/ocg/labeling%20agreement.htm">World Wine Trade Group Agreement</a>.</p>
<p>The World Wine Trade Group Agreement is a new international agreement signed by several wine-trading countries. Some of those negotiating the Trans-Pacific Partnership, including Australia, New Zealand, Canada and the United States are signatories.</p>
<p>The Agreement appears to almost entirely limit a country’s right to stipulate where information should be placed on a wine label. This type of provision would prevent countries from requiring health warnings to be placed in the position where they would have most impact - the front label on a bottle or can.</p>
<h2>Compromising freedom</h2>
<p>If rules such as these are included in the Trans-Pacific Partnership, they will present real risks to signatories’ ability to introduce effective health warnings for alcohol. The World Wine Trade Group Agreement only involves a small number of countries but its effects would be magnified if it is used as the basis for the Trans-Pacific Partnership. </p>
<p>Agreeing to Trans-Pacific Partnership rules that restrict health efforts would be counter to good evidence-based public health policy. It would close off a strategy, which when combined with others such as restricting availability and limiting promotion, would help reduce the rising human toll of alcohol. </p>
<p>It would also undermine the excellent track record for public health leadership that Australia has established with tobacco, in particular plain packaging. </p><img src="https://counter.theconversation.com/content/16279/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Deborah Gleeson receives funding from the Australian Research Council. She is a member of the Public Health Association of Australia and active in the People's Health Movement.</span></em></p><p class="fine-print"><em><span>Paula O'Brien does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New rules for alcohol labelling were discussed in Malaysia earlier this week by countries negotiating the Trans-Pacific Partnership. The proposed rules could stymie the introduction of effective health…Deborah Gleeson, Lecturer in Public Health, La Trobe UniversityPaula O'Brien, Senior Lecturer in Faculty of Law, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/137112013-05-09T04:35:26Z2013-05-09T04:35:26ZTrans Pacific Partnership puts member countries’ health at risk<figure><img src="https://images.theconversation.com/files/23367/original/8v2wrzcm-1367996119.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A Trans Pacific Partnership meeting hosted by US President Barack Obama with the Sultan of Brunei and prime ministers from Australia, New Zealand, Malaysia , Singapore and Vietnam, in Phnom Penh, Cambodia, on November 20, 2012.</span> <span class="attribution"><span class="source">AAP Image/Auspic, David Foote</span></span></figcaption></figure><p>International trade agreements bring new transnational food companies into countries, along with new food advertising and promotion. </p>
<p>This has often led to an increase in unhealthy foods entering the domestic market. But an agreement currently being negotiated could go even further and increase the influence of the food industry on domestic regulatory regimes and policies.</p>
<p>The <a href="http://www.dfat.gov.au/fta/tpp/">Trans Pacific Partnership</a> (TPP) has been under negotiation since 2010, including Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. (Japan has recently joined the negotiating table but China is notably absent.)</p>
<p>More than any other trade agreement, the TPP is focused on economic integration, investment and the rights of investors, which, for the most part, are international corporations.</p>
<p>Opening up domestic markets <a href="http://www.globalhealthequity.ca/electronic%20library/Globalization,%20Trade,%20and%20the%20Nutrition%20Transition.pdf">influences national diets</a> by altering the availability, quality, price and desirability of foods. And that raises concerns about under-nutrition, obesity and chronic diseases. </p>
<p>There is concern the TPP will invoke the same risks to nutrition and health as existing multilateral and free trade agreements – through tariff reductions, encouragement of foreign investment and enhanced intellectual property rights for corporations. </p>
<p>On the face if it, reductions in barriers to trade should increase consumer food choices and improve supply for net-food importing countries. But trade liberalisation through multilateral and free-trade agreements has <a href="http://www.globalhealthequity.ca/electronic%20library/Globalization,%20Trade,%20and%20the%20Nutrition%20Transition.pdf">traditionally resulted in</a> disproportionately large increases in imports and domestic production of foods that are high in saturated fat, highly processed, calorie-rich and nutrient-poor. </p>
<p>In a number of the Pacific Island nations, for instance, multilateral and regional trade agreements have undermined domestic agriculture and created a strong reliance on imports. This has led to <a href="http://www.tandfonline.com/doi/full/10.1080/03670244.2010.524104#.UYnwlSvk9UM">high levels of fat consumption</a> through cheap imports of margarine, butter, meat, chickens and canned meat. </p>
<p>The <a href="http://www.ustr.gov/trade-agreements/free-trade-agreements/cafta-dr-dominican-republic-central-america-fta">Central America-USA Free Trade Agreement</a> has promoted greater availability of highly processed foods in Central American countries, by <a href="http://www.biomedcentral.com/content/pdf/1744-8603-5-5.pdf">facilitating more imports</a>. And <a href="http://www.ncbi.nlm.nih.gov/pubmed/22550697">similar trends</a> have been observed with the lowering of trade barriers between Mexico and the United States following the signing of the <a href="http://www.nafta-sec-alena.org/en/view.aspx">North American Free Trade Agreement</a>. </p>
<p>Indeed, <a href="http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1001235">research has demonstrated</a> that greater foreign direct investment through trade agreements with the United States significantly increases the consumption of soft drinks within the signatory country, magnifying the risk of chronic diseases.</p>
<p>The TPP may go even further by giving companies more power than other agreements. The <a href="http://www.dfat.gov.au/fta/tpp/">Australian government has noted</a> “the TPP is more than a traditional trade agreement; it will also deal with behind-the-border impediments to trade and investment.” The way in which these behind-the-border impediments to trade and investment will be addressed could create significant risks for a healthy food supply. </p>
<p>The Trans Pacific Partnership is likely to provide stronger investor protections and enable greater (food) industry involvement in policy-making. It could lead to sweeping changes to domestic regulatory systems, and open up new opportunities for companies to appeal against domestic policies they consider to be a violation of their privileges under the agreement. </p>
<p>Together, these changes would weaken the ability for governments to protect public health by, for example, limiting imports and domestic manufacturing of unhealthy foods and drinks. </p>
<p>At the 15th round of negotiations in Auckland last December, the Malaysian government - supported by the United States - reportedly suggested restricting the amount of information food companies would be required to provide about ingredients and formulae of processed food products. </p>
<p>These sorts of proposals raise concerns about consumer access to information about food products, as well as the ability of governments to regulate food labelling on public health grounds. Measures like that one will undermine health policy goals and extend the control of the food industry over domestic policy. </p>
<p>Re-balancing food industry influence in the negotiation process with input from the health sector is vital. </p>
<p>Public health advocates and health policymakers must engage with trade negotiations to preserve policy space for public health goals before the window of opportunity closes.</p><img src="https://counter.theconversation.com/content/13711/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sharon Friel receives funding from the Australian Research Council and the National Health and Medical Research Council.</span></em></p><p class="fine-print"><em><span>Deborah Gleeson receives funding from the Australian Research Council. She is a member of the Public Health Association of Australia and active in the People's Health Movement.</span></em></p><p class="fine-print"><em><span>Libby Hattersley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>International trade agreements bring new transnational food companies into countries, along with new food advertising and promotion. This has often led to an increase in unhealthy foods entering the domestic…Sharon Friel, Professor of Health Equity, Australian National UniversityDeborah Gleeson, Lecturer in Public Health, La Trobe UniversityLibby Hattersley, Postdoctoral Fellow (Trade Policy and Health), Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/88552012-08-15T20:43:36Z2012-08-15T20:43:36ZGovernment wins first battle in plain packaging war<figure><img src="https://images.theconversation.com/files/14288/original/75k89hjb-1345012463.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Attorney-General Nicola Roxon and Health Minister Tanya Plibersek take questions after the High Court decision.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>The government and health advocates are deservedly celebrating the High Court decision on plain packaging. But tobacco companies have been quick to note that while they’ve lost a key battle, they intend to continue fighting the war.</p>
<p>A Philip Morris spokesperson <a href="http://www.google.com/hostednews/afp/article/ALeqM5gOxo1TDuaxGEh2-F1hQ550LVzhUw?docId=CNG.22765a1f351941e129fc2ca74a287a12.11">reportedly stated</a> that the High Court decision would have “no legal bearing” on the cases pending in the <a href="http://www.wto.org/">World Trade Organization (WTO)</a> or on its <a href="http://www.ag.gov.au/Internationallaw/Pages/Investor-State-Arbitration---Tobacco-Plain-Packaging.aspx">challenge</a> under the <a href="https://theconversation.com/big-tobacco-v-australia-taking-the-battle-to-the-global-stage-2027">Hong Kong–Australia bilateral investment treaty</a>. </p>
<p>This statement underestimates the extent of the deference shown to domestic courts by international tribunals. But it’s true that the decision doesn’t preclude these cases from proceeding or guarantee that the government will prevail in them.</p>
<h2>Investor-state dispute settlement</h2>
<p>The investor-state dispute under the Hong Kong treaty is particularly concerning for supporters of the legislation. Unlike the WTO, there’s no exception under the treaty for public health measures. And unlike in the Australian Constitution, “expropriation” (the act of a government taking private property) is defined very broadly. </p>
<p>Although detailed reasoning has not yet been provided, the High Court appears to have agreed with the government’s argument that it hasn’t acquired any property from tobacco companies. Unfortunately, under international investment law, the direct acquisition of property is not necessary to trigger the requirement for compensation. If a government measure has a significant impact on an investment (such as a negative effect on the investor’s profits), a tribunal may decide in favour of that investor.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/14291/original/jqng44t4-1345014164.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/14291/original/jqng44t4-1345014164.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/14291/original/jqng44t4-1345014164.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/14291/original/jqng44t4-1345014164.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/14291/original/jqng44t4-1345014164.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/14291/original/jqng44t4-1345014164.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/14291/original/jqng44t4-1345014164.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Yesterday’s High Court decision is just one battle in the war over plain packaging.</span>
<span class="attribution"><span class="source">mejilopezvazquez/Flickr</span></span>
</figcaption>
</figure>
<p>This difference between domestic and international law clearly demonstrates how foreign investors are currently provided greater rights under international investment treaties than domestic firms are accorded under Australian law. The Gillard government rightly decided last year that this is inappropriate and <a href="http://www.dfat.gov.au/publications/trade/trading-our-way-to-more-jobs-and-prosperity.html">announced</a> that it would no longer agree to investor-state dispute settlement procedures in trade or investment agreements. But existing treaties – such as the one with Hong Kong – still expose the government to liability.</p>
<h2>Distorted rules</h2>
<p>Philip Morris’ plan to proceed with its investor-state dispute despite yesterday’s ruling highlights the extent to which the investment arbitration system has been distorted by corporate interests since it was first developed in the 1960s.</p>
<p>Originally, the system was meant to provide protection for investors operating in countries where the rule of law was absent or where court systems were considered corrupt or biased against foreigners. Now, disgruntled corporations such as Philip Morris, who’ve had their day in court and have been treated fairly in a transparent and accountable manner, are utilising the arbitration system as a supranational court of appeal.</p>
<p>The government has very strong arguments on its side but outcomes in investment arbitration are notoriously hard to predict. There’s no system of basing decisions on precedents and case law is both recent and inconsistent.</p>
<p>And the government could be forced to pay very large legal costs and arbitration fees, even if it wins the case. The High Court has apparently awarded all costs to the government. This also happens on occasion in investment arbitration, but there are no strict rules about the division of costs between winners and losers.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/14292/original/xp4jgs64-1345014595.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/14292/original/xp4jgs64-1345014595.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/14292/original/xp4jgs64-1345014595.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/14292/original/xp4jgs64-1345014595.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/14292/original/xp4jgs64-1345014595.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/14292/original/xp4jgs64-1345014595.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/14292/original/xp4jgs64-1345014595.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The investor-state dispute settlement procedure in the Australia-Hong Kong bilateral investment treaty is the next battleground.</span>
<span class="attribution"><span class="source">Desmond Elliott</span></span>
</figcaption>
</figure>
<h2>Public vs corporate interests</h2>
<p>Still, the government should, without a doubt, continue to defend the legislation. It’s legal fight is about far more than the public health system in this country and the millions of people who have been negatively affected by tobacco products. It’s fundamentally about the right of governments to regulate in the public interest and the role of international institutions in constraining the behaviour of sovereign states.</p>
<p>The government also should maintain its policy against the inclusion of investor-state dispute settlement procedures in trade and investment agreements. It’s under enormous pressure to abandon this policy in the current negotiations for a <a href="http://aftinet.org.au/cms/trans-pacific-partnership-agreement/leaked-tppa-trade-chapter-australia-says-no-investor-rights-sue-">Trans-Pacific Partnership Agreement</a>. And it has recently been <a href="https://theconversation.com/accis-right-to-sue-campaign-not-supported-by-the-facts-8800">criticised</a> for this at home by the <a href="http://www.acci.asn.au/">Australian Chamber of Commerce and Industry</a>.</p>
<p>The Philip Morris case perfectly highlights the many problems with investment arbitration, while the purported benefits of the system remain unproven.</p>
<p>The government has shown itself to be a trailblazer in the area of tobacco regulation and many other countries look set to emulate the plain packaging policy, especially in light of yesterday’s victory in the High Court. It is now also leading the way in rejecting systems of international arbitration that enhance corporate power at the expense of democracy. It seems inevitable that other countries will follow suit in this domain as well.</p>
<p><br></p>
<p><em>Read other articles on plain packaging published since the High Court decision:</em></p>
<ul>
<li><p>On what this decision means for tobacco companies - <a href="https://theconversation.com/big-tobacco-crashes-at-first-legal-hurdle-on-plain-packaging-8807">Big Tobacco crashes at first legal hurdle on plain packaging</a></p></li>
<li><p>On what this means for other countries wanting to introduce plain packaging and the WHO - <a href="https://theconversation.com/the-olive-revolution-australias-plain-packaging-leads-the-world-8856">The Olive Revolution: Australia’s plain packaging leads the world</a></p></li>
<li><p>On why Philip Morris is using the Australia-Hong Kong BIT to try to stop plain packaging - <a href="https://theconversation.com/why-bilateral-investment-treaties-are-the-last-refuge-of-big-tobacco-8880">Why bilateral investment treaties are the last refuge of Big Tobacco</a></p></li>
</ul><img src="https://counter.theconversation.com/content/8855/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kyla Tienhaara does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The government and health advocates are deservedly celebrating the High Court decision on plain packaging. But tobacco companies have been quick to note that while they’ve lost a key battle, they intend…Kyla Tienhaara, Research Fellow Regulatory Institutions Network (RegNet), Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/88562012-08-15T05:34:10Z2012-08-15T05:34:10ZThe Olive Revolution: Australia’s plain packaging leads the world<figure><img src="https://images.theconversation.com/files/14268/original/ff6c2qqb-1345005124.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The High Court has ruled the enforcing plain packaging is constitutionally legal.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>After much <a href="https://theconversation.com/tobaccos-mad-men-threaten-public-health-3450">political debate</a>, the Australian Parliament passed the <a href="http://www.comlaw.gov.au/Details/C2011A00148">Tobacco Plain Packaging Act 2011 (Cth)</a>. Australian legislators, such as Richard di Natale, provided moving accounts for the need for plain packaging of tobacco products.</p>
<p>The legislation requires tobacco products to feature standard olive-coloured plain packaging with large health warnings. Naturally, Big Tobacco retaliated with a legal challenge.</p>
<p>And after <a href="https://theconversation.com/big-tobaccos-box-fetish-plain-packaging-at-the-high-court-6518">epic litigation</a>, the <a href="http://www.hcourt.gov.au/assets/publications/judgment-summaries/2012/hca30-2012-08-15.pdf">High Court of Australia</a> earlier today issued orders ruling that “at least a majority of the judges” are of the view the plain packaging regime is valid under the <a href="http://www.comlaw.gov.au/Details/C2004C00469"><em>Australian Constitution</em></a>. </p>
<p>The High Court rejected the arguments of Big Tobacco that there was an acquisition of property on less than just terms. This ruling is in line with precedents on constitutional law and intellectual property such as <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2000/14.html">the Grain Pool case</a>, <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/1994/27.html">the Nintendo case</a>, and the <a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/2012/8.html">recent Phonographic ruling</a>. The High Court will provide reasons for the decision at a later date – before the retirement of Justice Gummow, an eminent judge on matters of intellectual property.</p>
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<h2>Setting a precedent</h2>
<p>The decision in <a href="http://www.hcourt.gov.au/cases/case-s389/2011"><em>JT International SA</em> v <em>Commonwealth</em></a> and <a href="http://www.hcourt.gov.au/cases/case-s409/2011"><em>British American Tobacco Ltd</em> v <em>Commonwealth</em> [2012] HCA 30</a> will be an important precedent in Australia and the rest of the world.</p>
<p>Domestically, the Attorney-General Nicola Roxon and the Health Minister Tanya Plibersek have <a href="http://www.canberratimes.com.au/opinion/political-news/big-tobacco-loses-high-court-battle-over-plain-packaging-20120815-247kz.html">hailed the decision a victory for public health.</a> “This is a victory for all those families who have lost someone to a tobacco related illness. No longer when a smoker pulls out a packet of cigarettes will that packet be a mobile billboard,” Roxon said.</p>
<p>The High Court is a well-respected superior court, with great expertise in the field of intellectual property. The ruling is consistent with other superior courts dealing with questions of tobacco control. In a 2007 case, <a href="http://scc.lexum.org/en/2007/2007scc30/2007scc30.html">Attorney General v JTI-MacDonald Corp</a>, the Supreme Court of Canada noted: “When commercial expression is used … for the purpose of inducing people to engage in harmful and addictive behaviour, its value becomes tenuous.” </p>
<p>And in 2012, the <a href="http://www.saflii.org/za/cases/ZASCA/2012/107.html">South African Supreme Court</a> defended regulations on tobacco advertising under the <a href="http://www.who.int/fctc/en/">WHO Framework Convention on Tobacco Control</a>.</p>
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<h2>The World Health Organization</h2>
<p>The High Court ruling is also a boost for the <a href="http://www.who.int/">World Health Organization (WHO)</a> and its Framework Convention on Tobacco Control. The WHO has been deeply concerned about the impact of the <a href="http://www.who.int/tobacco/global_report/2011/en/">tobacco epidemic</a> around the world, observing, “Tobacco is without doubt the single most preventable cause of death in the world today. It is the only legal consumer product that kills up to half of those who use it as intended and recommended by the manufacturer.”</p>
<p>The WHO Framework Convention on Tobacco Control recognises that member states are “seriously concerned about the impact of all forms of advertising, promotion and sponsorship aimed at encouraging the use of tobacco products.” Article 11 of the Convention deals with the packaging and labelling of tobacco products and Article 13 addresses tobacco advertising, promotion and sponsorship. The guidelines endorse plain packaging as a means of implementing the Convention.</p>
<p>The WHO has strongly supported the Australian Government’s policies on plain packaging. It has expressed the view that the legislation “will achieve its stated goals of: reducing the attractiveness and appeal of tobacco products to consumers, particularly young people; increasing the noticeability and effectiveness of mandated health warnings; and reducing the ability of the tobacco product packaging to mislead consumers about the harms of smoking.”</p>
<p>Nicola Roxon received a special award from the WHO for “her unwavering leadership” in the field of health. And for World No Tobacco Day in 2012, the WHO disseminated videos, lauding Australia’s regime for the plain packaging of tobacco products:</p>
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<h2>Joining the Olive Revolution</h2>
<p>In the wake of today’s High Court ruling, the big question is who will be next to join the Olive Revolution and adopt plain packaging of tobacco products. <a href="http://www.sbs.com.au/news/article/1682812/Court-win-on-tobacco-a-watershed-Roxon">Nicola Roxon</a> commented, “Australia’s actions are being closely watched by governments around the world. The message to the rest of the world is big tobacco can be taken on and beaten.”</p>
<p>The United Kingdom has held <a href="http://consultations.dh.gov.uk/tobacco/standardised-packaging-of-tobacco-products/consult_view">a public consultation</a> on the plain packaging of tobacco products, and <a href="http://phrc.lshtm.ac.uk/project_2011-2016_006.html">commissioned research on the topic</a>. New Zealand has also engaged in a consultation on the <a href="http://www.health.govt.nz/publication/proposal-introduce-plain-packaging-tobacco-products-new-zealand">plain packaging of tobacco products</a>.</p>
<p>The great Norwegian leader Gro Harlem Brundtland helped transform WHO and focus its mandate on tobacco control. Norway has prohibited its Pension Fund from investing in tobacco (showing the way for <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=fapa_ctte/ethical_invest_2012/index.htm">Australia’s Future Fund</a>) and supported Australia’s plain packaging regime in the <a href="http://www.guardian.co.uk/business/2012/aug/15/tobacco-plain-packaging-australia-court">World Trade Organization (WTO)</a>. It looks keen to follow Australia’s lead.</p>
<p>Meanwhile, Australian and Indian public health experts have presented a report to the New Delhi Parliament urging <a href="http://www.smh.com.au/opinion/political-news/india-may-adopt-australias-plain-packaging-laws-20120804-23mm4.html">India, the world’s second-largest tobacco consumer and producer, to act</a>. And Roxon has also been <a href="http://www.smh.com.au/opinion/political-news/washington-honours-roxon-global-champion-in-antitobacco-battle-20120516-1yr73.html">promoting plain packaging of tobacco products to the United States Congress and the Obama Administration</a>.</p>
<p>The High Court ruling will embolden countries – such as the United Kingdom, New Zealand, Norway, India and the United States – contemplating plain packaging of tobacco countries. The decision will strengthen the case of the Australia in its international disputes over <a href="http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds434_e.htm">the plain packaging regime in the World Trade Organization</a> and under the <a href="https://theconversation.com/big-tobacco-v-australia-taking-the-battle-to-the-global-stage-2027">Hong Kong-Australia Investment Treaty</a>. </p>
<p>The decision reinforces the wisdom of the Australian Government in <a href="https://theconversation.com/a-dangerous-investment-australia-new-zealand-and-the-trans-pacific-partnership-7440">excluding state-investor clauses from future trade agreements</a>. But it’s also important that plain packaging and other measures of tobacco control are embraced by the United States and others - especially during negotiations over the <a href="https://theconversation.com/a-mercurial-treaty-the-trans-pacific-partnership-and-the-united-states-7471">Trans-Pacific Partnership</a>.
<br>
<em>Read other articles on plain packaging published since the High Court decision:</em></p>
<ul>
<li><p>On what this decision means for tobacco companies - <a href="https://theconversation.com/big-tobacco-crashes-at-first-legal-hurdle-on-plain-packaging-8807">Big Tobacco crashes at first legal hurdle on plain packaging</a></p></li>
<li><p>On the next battle for Australia under the dispute settlement provisions in the Australia-Hong Kong bilateral investment treaty - <a href="https://theconversation.com/government-wins-first-battle-in-plain-packaging-war-8855">Government wins first battle in plain packaging war</a></p></li>
<li><p>On why Philip Morris is using the Australia-Hong Kong BIT to try to stop plain packaging - <a href="https://theconversation.com/why-bilateral-investment-treaties-are-the-last-refuge-of-big-tobacco-8880">Why bilateral investment treaties are the last refuge of Big Tobacco</a></p></li>
</ul><img src="https://counter.theconversation.com/content/8856/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Rimmer is an academic at the Australian National University, and abides by its policy on the responsible practice of research: <a href="http://policies.anu.edu.au/policies/responsible_practice_of_research/policy">http://policies.anu.edu.au/policies/responsible_practice_of_research/policy</a> Matthew Rimmer does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. Indeed, the Australian National University strictly forbids its staff from receiving direct funding from the tobacco industry: 'Direct funding from foundations primarily funded by the tobacco industry will not be accepted. Direct funding from business units of companies involved in the tobacco industry will not be accepted if, in the opinion of the Deputy Vice-Chancellor Research, the unit is engaged directly in the production, manufacture, distribution, promotion or marketing of tobacco or tobacco products as its primary business; or acceptance of the funding involves any promotion or advertising that can be construed to support the tobacco industry or the tobacco lobby and its activities.' <a href="http://policies.anu.edu.au/policies/externally_funded_grants_consultancies_and_contracts/policy">http://policies.anu.edu.au/policies/externally_funded_grants_consultancies_and_contracts/policy</a> Matthew Rimmer receives funding from the Australian Research Council for unrelated work on intellectual property and climate change.</span></em></p>After much political debate, the Australian Parliament passed the Tobacco Plain Packaging Act 2011 (Cth). Australian legislators, such as Richard di Natale, provided moving accounts for the need for plain…Matthew Rimmer, ARC Future Fellow and Associate Professor in Intellectual Property, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/74712012-06-14T20:08:29Z2012-06-14T20:08:29ZA mercurial treaty: the Trans-Pacific Partnership and the United States<figure><img src="https://images.theconversation.com/files/11756/original/x6qf4tn6-1339669317.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Leaders of the member states of the Trans-Pacific Strategic Economic Partnership Agreement (TPP) from 2010.</span> <span class="attribution"><span class="source">Gobierno de Chile/Wikimedia Commons</span></span></figcaption></figure><p>According to the <a href="http://www.ustr.gov/about-us/press-office/fact-sheets/2011/november/united-states-trans-pacific-partnership">United States Trade Representative</a> (USTR), Ron Kirk, the Trans-Pacific Partnership is “an ambitious, next-generation, Asia-Pacific trade agreement that reflects U.S. priorities and values”.</p>
<p>The negotiating partners for the treaty include a selection of countries from the Pacific Rim: Australia, New Zealand, Brunei Darussalam, Malaysia, Singapore, Vietnam, Chile and Peru. There has been much discussion about whether Canada, Mexico, and Japan will join the agreement. And <a href="http://www.trademinister.gov.au/transcripts/2012/ce_tr_120523_press_conference.html">USTR Ron Kirk</a> has observed that the treaty has open architecture to accommodate new members.</p>
<p>Although the draft text remains largely secret, the <a href="http://www.ustr.gov/about-us/press-office/fact-sheets/2011/november/outlines-trans-pacific-partnership-agreement">outline</a> indicates that the agreement is wide-ranging, covering some 20 areas, including competition, customs, e-commerce, intellectual property, investment, industrial relations, and trade.</p>
<p>According to the <a href="http://www.ustr.gov/about-us/press-office/fact-sheets/2011/november/outlines-trans-pacific-partnership-agreement">USTR</a>, the treaty is intended to be a “living agreement” that can be updated to “address trade issues that emerge in the future as well as new issues that arise with the expansion of the agreement to include new countries.”
The danger is it could instead be a mercurial treaty, which could be rapidly revised and updated by the parties.</p>
<p>Even within the United States, there are tensions between the Obama administration and the Congress over the Trans-Pacific Partnership - particularly in respect of the impact of the treaty upon open government, intellectual property, the digital economy, and public health. There has been a furore this week about <a href="http://www.huffingtonpost.com/2012/06/13/obama-trade-document-leak_n_1592593.html">the leak of the investment chapter</a> of the Trans-Pacific Partnership.</p>
<h2>Undermining open government</h2>
<p>There has been widespread concern about the lack of transparency, due process, public participation, and good governance surrounding the Trans-Pacific Partnership in the United States.</p>
<p>A Democrat senator, Ron Wyden, has introduced a bill calling for all members of Congress, together with staff who have proper security clearance, to be given access to “documents, including classified materials, relating to negotiations for a trade agreement to which the United States may be a party and policies advanced by the Trade Representative in such negotiations.”</p>
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<p>His aim: “Put simply, this legislation would ensure that the representatives elected by the American people are afforded the same level of influence over our nation’s policies as the paid representatives of PhRMA, Halliburton and the Motion Picture Association.”</p>
<p>Meanwhile, <a href="http://infojustice.org/archives/21137">a group of law professors</a> have issued a statement to note concern and disappointment over the secrecy surrounding the IP chapter of the agreement. They’ve asked for increased participation for the sake for legitimacy and fairness, “if the goal is to create balanced law that stands the test of modern democratic theories and practices of public transparency, accountability and input.”</p>
<p>The <a href="http://infojustice.org/archives/21385">USTR</a> has dismissed such allegations regarding the lack of transparency and public participation. But civil society groups have pressed their point, interrupting the Dallas talks with political theatre. <a href="http://theyesmen.org/">The Yes Men</a> infiltrated the Dallas meeting, and awarded Ron Kirk with a “Corporate Power Tool” in a fake ceremony:</p>
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<h2>Copyright law, the digital economy and cloud computing</h2>
<p>There’s also concern that the intellectual property chapter of the Trans-Pacific Partnership represents a similar threat to civil liberties, innovation, and the digital economy as those posed by bills such as <a href="http://thomas.loc.gov/cgi-bin/bdquery/z?d112:h.r.3261:">Stop Online Piracy Act</a> (SOPA) and <a href="http://thomas.loc.gov/cgi-bin/bdquery/z?d112:s.968:">Protect Intellectual Property Act</a> (PIPA).</p>
<p>Republican Californian representative, Darrell Issa, has established a website called <a href="http://keepthewebopen.com/">Keep the Web Open</a>. He has posted a <a href="http://keepthewebopen.com/tpp">leaked version</a> of a 2011 Intellectual Property Chapter of the Trans-Pacific Partnership, and called for public comment and criticism of the proposed text. </p>
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<p><a href="http://infojustice.org/wp-content/uploads/2012/06/kirk0530212.pdf">But for his part</a>, USTR Ron Kirk has maintained the agreement “reflects the incentives and stable framework that can nurture a healthy digital environment in the Asia-Pacific region.” He has argued that the treaty provides safe harbours for cloud computing. However, his purported “safeguards” in respect of copyright law and the digital environment remain somewhat hazy and vague.</p>
<p>Congressmen Issa and Wyden have instead called for the creation of a substantive <a href="http://www.bna.com/wyden-issa-say-n12884909994/">Citizens’ Digital Bill of Rights</a>. The <a href="http://keepthewebopen.com/digital-bill-of-rights">draft</a> calls for an open internet; a free flow of knowledge; and the protection of civil liberties, free speech and privacy.</p>
<h2>Patent law and access to essential medicines</h2>
<p>There have also been concerns that the Trans-Pacific Partnership unduly favours brand-name pharmaceutical drug companies. Senior Democrat Congressman Henry Waxman - a co-author of the <a href="http://www.cptech.org/ip/health/generic/hw.html">Hatch-Waxman Act</a> - has spoken out over the impact of the patent provisions in the treaty on public health.</p>
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<p><a href="http://infojustice.org/archives/23270">Waxman</a> has observed that the United States Congress negotiated safeguards for public health in trade agreements with the Republican Bush Administration and complained that the Democrat Obama Administration hasn’t included such measures in the Trans-Pacific Partnership.</p>
<p>Waxman has noted that the agreement would mean poor countries would wait longer for access to generic drugs than patients in the United States and that it would allow large pharmaceutical companies to increase their profits in developing nations. He has suggested that the agreement needs to be rewritten to ensure “a reasonable mix of incentives for innovators that do not pose unnecessary barriers to poor patients seeking access to low cost generic medicines.”</p>
<p>But the USTR has taken a <a href="http://www.france24.com/en/20120528-interview-ambassador-ron-kirk-us-trade-representative-%20advisor-barack-obama-anti-counterfeiting-trade-agreement">hard line on intellectual property and access to essential medicines</a>. It is genuinely shocking that the Obama administration should adopt such a stance on global health. Perhaps the Democrats have forgotten the public backlash against presidential candidate <a href="http://www.twnside.org.sg/title/gore-cn.htm">Al Gore’s controversial stance on patent law and medicines</a> in 1999.</p>
<h2>Trade mark law and tobacco control</h2>
<p>When, Australian Attorney-General Nicola Roxon <a href="http://www.smh.com.au/opinion/political-news/washington-honours-roxon-global-champion-in-antitobacco-battle-20120516-1yr73.html">visited Washington DC</a>, extolling the virtues of the <a href="https://theconversation.com/big-tobaccos-box-fetish-plain-packaging-at-the-high-court-6518">plain packaging of tobacco products</a>, earlier this year, <a href="http://democrats.energycommerce.house.gov/index.php?q=news/waxman-welcomes-release-of-united-states-trade-representative-s-trans-pacific-partnership-tobac">Waxman</a> raised concerns about the impact of the Trans-Pacific Partnership on tobacco control measures.</p>
<p>Waxman stressed, “Australia, a Trans-Pacific Partnership partner, has similarly faced challenges in the World Trade Organization to its tobacco control initiative that will require more visible health warnings and so-called plain packaging on tobacco products.”</p>
<p>In light of recent trade challenges to U.S. and Australian tobacco control laws, Waxman emphasized, “In my view, it is essential to safeguard countries’ sovereign authority to take the most appropriate and most feasible action to protect the health of their citizens.” He insisted that the Trans-Pacific Partnership must respect the principles and objectives of the <a href="http://www.who.int/fctc/en/">World Health Organization Framework Convention on Tobacco Control.</a></p>
<p>Surprisingly, USTR Ron Kirk has equivocated on the issue of safeguards on tobacco control in the Trans-Pacific Partnership, as can be seen in this video:</p>
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<p>And there has been unease in Australia about whether the integrity of its <a href="http://www.abc.net.au/pm/content/2012/s3525404.htm">plain packaging regime will be protected</a>.</p>
<h2>Investment</h2>
<p>On the 13th June 2012, the investment chapter of the TPP was [leaked to the US civil society group, Public Citizen](http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=3630](http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=3630). The <a href="http://www.citizenstrade.org/ctc/wp-content/uploads/2012/06/tppinvestment.pdf">investment chapter</a> provides substantive legal protections for investors and investments of each partner in the other countries of the Trans-Pacific Partnership.</p>
<p>The treaty establishes an “investor-state” dispute resolution settlement under which companies could seek compensation where there are breaches of their rights under the Trans-Pacific Partnership. There are <a href="http://www.huffingtonpost.com/2012/06/13/obama-trade-document-leak_n_1592593.html">particular concerns about how such a regime would apply to public health, labour, and the environment</a>.
Australia has refused to submit to such a regime in the Trans-Pacific Partnership thus far.</p>
<p>Investment clauses are widely used in disputes between companies and governments with previous spats over <a href="http://www.nzweek.com/?p=6229">energy</a> and against the Australian government over <a href="http://www.theage.com.au/national/big-tobacco-accused-of-legal-trick-20111221-1p5qv.html">tobacco control</a>.</p>
<p>With <a href="http://www.huffingtonpost.com/2012/06/13/obama-trade-document-leak_n_1592593.html">the leak of the investment chapter</a>, the Obama administration stands accused of breaking its 2008 campaign promises on trade policy.</p>
<p>The leaked <a href="http://www.citizenstrade.org/ctc/wp-content/uploads/2012/06/tppinvestment.pdf">investment chapter</a>
has created a wider international controversy. The chapter appears to confirm fears that the treaty enhances corporate rights at the expense of public goods and services - such as the intellectual commons; affordable access to medicines and public health; and the protection of the environment.</p></figure><img src="https://counter.theconversation.com/content/7471/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dr Matthew Rimmer is an Australian Research Council Future Fellow, working on Intellectual Property and Climate Change. He is an associate professor at the ANU College of Law, an associate director of the Australian Centre for Intellectual Property in Agriculture (ACIPA), and a director of the Australian Digital Alliance. Dr Matthew Rimmer receives funding as an Australian Research Council Future Fellow working on "Intellectual Property and Climate Change: Inventing Clean Technologies" and a chief investigator in an Australian Research Council Discovery Project, “Promoting Plant Innovation in Australia”. </span></em></p>According to the United States Trade Representative (USTR), Ron Kirk, the Trans-Pacific Partnership is “an ambitious, next-generation, Asia-Pacific trade agreement that reflects U.S. priorities and values…Matthew Rimmer, ARC Future Fellow and Associate Professor in Intellectual Property, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/59022012-03-19T19:15:19Z2012-03-19T19:15:19ZAustralia should defend neighbours in Trans Pacific Partnership negotiations<figure><img src="https://images.theconversation.com/files/8732/original/kwdv3cf7-1332121711.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">As a major donor in the region, Australia should defend countries facing the possibility of unaffordable medicines.</span> <span class="attribution"><span class="source">US Navy/Wikimedia Commons</span></span></figcaption></figure><p>Australia is taking a strong stance to protect its health and medicines policies during negotiations for the new regional trade agreement, the Trans Pacific Partnership Agreement (TPP). This negotiating position will nevertheless undermine health in developing countries unless we take an equally strong position to support and protect our neighbours.</p>
<p>Countries party to the TPP currently include Australia, Brunei, Chile, Malaysia, Peru, New Zealand, Singapore, the United States and Vietnam. Japan, Mexico and Canada are also engaged in discussions with a view to joining. Talks for the 11th round of negotiations concluded in Melbourne on 9 March, and there’s <a href="http://www.theaustralian.com.au/business/economics/us-eager-to-settle-trans-pacific-partnership/story-e6frg926-1226294103294">pressure to conclude the agreement as soon as possible.</a></p>
<p>The TPP will provide a template for future trade deals, and decisions made in the next few months between the nine TPP countries will have long-term ramifications for health around the world. Many areas of the agreement will have an impact on health and medicines policies, but there are two chapters that could have particularly dire consequences for health. </p>
<p>First, leaked negotiating texts show the United States is seeking expanded intellectual property protections for pharmaceutical products that would severely delay and restrict access to affordable medicines in TPP countries.</p>
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<img alt="" src="https://images.theconversation.com/files/8763/original/nv6wvv34-1332137458.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/8763/original/nv6wvv34-1332137458.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/8763/original/nv6wvv34-1332137458.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/8763/original/nv6wvv34-1332137458.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/8763/original/nv6wvv34-1332137458.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/8763/original/nv6wvv34-1332137458.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/8763/original/nv6wvv34-1332137458.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><span class="source">Leah Louise Gorospe</span></span>
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<p>Australia’s position is that it won’t accept provisions in the TPP that affect the integrity of the <a href="http://www.pbs.gov.au/pbs/home">Pharmaceutical Benefits Scheme (PBS)</a>. Extending intellectual property rights beyond the status quo would keep medicines under patent for longer, broaden the application of patenting, delay the introduction of cheaper generic medicines and add substantially to the costs of the PBS. So it’s unlikely that Australia will accept stronger intellectual property provisions than those consistent with the <a href="http://www.austrade.gov.au/ausfta/default.aspx">Australia-US Free Trade Agreement (AUSFTA)</a>, which came into effect in 2005.</p>
<p>Good news? Not for developing countries. AUSFTA contains tougher intellectual property provisions than those already in place in the developing country parties to the TPP. If the AUSFTA provisions were taken as the baseline for the agreement, countries such as Vietnam and Malaysia would no longer be able to use safeguards under the <a href="http://www.wto.org/english/tratop_e/trips_e/trips_e.htm">World Trade Organization (WTO) TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement</a>, which currently provide them with access to affordable generic versions of medicines.</p>
<p>Many of the provisions the United States is seeking for the intellectual property chapter will delay the availability of generic medicines in developing countries, even if they don’t change the situation in Australia. </p>
<p>Second, a proposed investment chapter for the TPP reportedly contains an investor state dispute settlement (ISDS) clause that will enable foreign corporations to challenge legitimate health, social and environmental policies in international tribunals. </p>
<p>Australia is already having a painful experience with this type of clause – tobacco company Philip Morris Asia has commenced arbitration against the Australian government over its new plain packaging for tobacco products laws using a similar clause in an <a href="https://theconversation.com/big-tobacco-v-australia-taking-the-battle-to-the-global-stage-2027">investment treaty between Australia and Hong Kong</a>. </p>
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<span class="caption">The agreement could preclude developing country attempts to regulate</span>
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<p>Wisely, <a href="http://news.smh.com.au/breaking-news-national/labor-standing-firm-on-pacific-trade-deal-20120305-1ue2b.html">Australia has decided it will no longer accept ISDS clauses in trade agreements</a>, and it’s likely that we’ll negotiate an exemption for the clause. This would mean the clause wouldn’t apply to Australia, but would still apply to other countries.</p>
<p>Developing countries will be more reluctant to seek such an exemption as they have far less bargaining power in the negotiating room. And they’re also far less able to manage the costs of expensive legal claims initiated by large corporations. So an ISDS clause in the TPP would likely deter developing countries from introducing important public health policies, such as tobacco plain packaging.</p>
<p>To protect health in developing countries of the region, Australia would firstly need to insist that the TPP does not extend intellectual property rights beyond the WTO’s TRIPS Agreement. Secondly, Australia would need to refuse to sign the TPP if it contains an ISDS clause applying to Vietnam, Malaysia, Peru, Chile or Brunei. </p>
<p>To take such action would be bold but it would be consistent with Australia’s global leadership role in public health, its interests as a donor in the region and its commitments under several international declarations. More importantly, it’s the right thing to do.</p><img src="https://counter.theconversation.com/content/5902/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Deborah Gleeson does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. She is a member of the Public Health Association of Australia and active in the People's Health Movement.</span></em></p>Australia is taking a strong stance to protect its health and medicines policies during negotiations for the new regional trade agreement, the Trans Pacific Partnership Agreement (TPP). This negotiating…Deborah Gleeson, Lecturer in Public Health, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/43012011-11-16T04:04:04Z2011-11-16T04:04:04ZA ‘zhengyou’ to China? Signing with Obama on trade puts this friendship to the test<figure><img src="https://images.theconversation.com/files/5567/original/apecportrait.jpg?ixlib=rb-1.1.0&rect=213%2C139%2C3755%2C2361&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Strategic friendships: will Australia's decision to sign up to Obama's Trans-Pacific Partnership agreement impact on our relationship with China?</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>The task of simultaneously negotiating our traditional security and cultural ties with the US, and our burgeoning economic relationship with China, can justifiably be described as the “great foreign policy challenge of our time”. </p>
<p>US President Barack Obama’s announcement of a reinvigorated <a href="http://www.dfat.gov.au/trade/">Trans-Pacific Partnership (TPP) agreement</a>, made on the sidelines of the APEC summit in Hawaii on Saturday, has brought this challenge to the fore once again.</p>
<p>The US sees the TPP as an initiative through which it can demonstrate its economic leadership in the Asia-Pacific region, a region that will remain the world economy’s most dynamic into the foreseeable future. The Australian government’s enthusiasm in signing up to the TPP therefore sends a clear signal to other countries in the region that it embraces US leadership, as well as its strategic priorities.</p>
<h2>Unique and ambitious </h2>
<p>The TPP is unique among free trade arrangements (FTAs) in that it aims to not only reduce tariff and non-tariff barriers, but also liberalise investment flows, and promote regulatory convergence around matters as diverse as labour and environmental standards and intellectual property right protection.</p>
<p>It is also unique in the ambitious 12-month timetable set for its completion. The Department of Foreign Affairs and Trade (DFAT) already describes it as the “government’s highest regional trade priority”. Keep in mind that Australia is also in the midst of negotiating FTAs with <a href="http://203.6.168.90/fta/acfta/">China</a> and <a href="http://dfat.gov.au/fta/ajfta/index.html">Japan</a>.</p>
<p>The <a href="http://www.pm.gov.au/press-office/transcript-joint-press-conference-honolulu">sales pitch</a> from Prime Minister Julia Gillard and Trade Minister Craig Emerson regarding the TPP has been firmly economic in nature. The liberalisation of international trade and investment creates jobs, but the <a href="http://www.wto.org/english/tratop_e/dda_e/dda_e.htm">Doha round</a> of the World Trade Organisation’s (WTO) sponsored multilateral negotiations has stalled, and so other avenues must be pursued. </p>
<h2>Not convincing </h2>
<p>However, the economic case for the TPP is far from convincing. </p>
<p>Gillard has made the point that the nine countries that have signed up to the TPP account for around one quarter of world GDP. The fact is that the US share of world GDP in 2010 was 23.1%. The share of the other eight countries combined, including Australia, was just 3.7%. </p>
<p>Moreover, Australia already has an <a href="http://203.6.168.65/fta/ausfta/final-text/">FTA with the US</a>. Likewise, it already has an FTA with Singapore, the third largest economy in the TPP after the US and Australia, as well as with other TPP members, New Zealand and Chile. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/5565/original/jintao.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/5565/original/jintao.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=783&fit=crop&dpr=1 600w, https://images.theconversation.com/files/5565/original/jintao.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=783&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/5565/original/jintao.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=783&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/5565/original/jintao.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=984&fit=crop&dpr=1 754w, https://images.theconversation.com/files/5565/original/jintao.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=984&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/5565/original/jintao.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=984&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">China believes the Obama’s APEC Trans-Pacific Partnership is about containment.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>China and Japan, by far the most important destinations for our exports, are not part of the TPP. Consider this – in 2010-11, Australia’s merchandise exports to China amounted to $A64.8 billion, up 39.4% on a year earlier. Merchandise exports to the other eight TPP countries combined amounted to $A28.6 billion, up 3.9%. </p>
<p>Thus, where the marginal gains will come from is not clear. </p>
<p>Might the timely completion of the TPP encourage China and Japan into the fold? Japan’s government has <a href="http://www.yomiuri.co.jp/dy/national/T111115005959.htm">indicated an interest</a> in joining, but faces a massive job in overcoming a domestic farming lobby firmly opposed to the deal and that has largely successfully resisted previous attempts at liberalisation. </p>
<h2>Damage to our relationship </h2>
<p>However, the main economic risk associated with the TPP for Australia is the damage it might do to our relationship with China. </p>
<p>The TPP feeds directly into the already strong fear in China that the US seeks to contain their economic emergence, despite what US Secretary of State Hillary Clinton might say to the contrary. China had, after all, already outlined its own preferred modes of deepening regional engagement, notably the <a href="http://www.aseansec.org/4918.htm">ASEAN plus 3</a> and ASEAN plus 6 groupings. </p>
<p>The official media in China has begun espousing this <a href="http://news.xinhuanet.com/english2010/china/2010-03/02/c_13194503.htm">containment line</a>, as well as expressing annoyance that China was not invited to participate in the TPP. <a href="http://www.abc.net.au/news/2011-11-14/pm-expect-more-countries-to-join-free-trade-zone/3664158">Prime Minister Gillard’s comment</a> that any country, including China, can join the TPP is disingenuous. If the TPP does include elements such as regulatory convergence then China has little realistic hope of joining and the Australian Government must have known this. </p>
<p>It is worth noting that if Japan did in fact join the TPP it would only add to China’s fears of being boxed in. Likewise, the announcement by Taiwan’s President Ma Ying-jeou that it too is <a href="http://www.taiwantoday.tw/ct.asp?xItem=180354&ctNode=445">interested in joining</a>, albeit over a longer time frame, has the potential to create enormous tensions in China.</p>
<h2>Biggest danger </h2>
<p>Perhaps the biggest danger for Australia is that the TPP will go nowhere or achieve little and China will have been alienated in the process. For example, how Vietnam intends to achieve regulatory convergence with countries like the US and Australia on matters such as labour and environmental standards is far from clear. Indeed, how the US plans to wean its own domestic agricultural sector off farm subsidies is also uncertain. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/5564/original/zhengyou.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/5564/original/zhengyou.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/5564/original/zhengyou.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/5564/original/zhengyou.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/5564/original/zhengyou.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/5564/original/zhengyou.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/5564/original/zhengyou.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Foreign Minister Kevin Rudd depicted Australia as a “zhengyou” - a true friend - to China.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>To be sure, China will continue to buy our iron ore even in the event of a TPP. Negative consequences for Chinese investment in Australia are potentially greater, particularly given that most of China’s investment abroad is conducted by state-owned enterprises. </p>
<p>And any fantasy that Australia is viewed in China as a “zhengyou” - a true friend - will have taken a sharp beating: in 2008, former Prime Minister Rudd remarked in a speech at Beijing University that: “A true friend is one who can be a zhengyou, that is a partner who sees beyond immediate benefit to the broader and firm basis for continuing, profound and sincere friendship.” </p>
<p>All of the above suggests that there is little to like in the TPP from an economic perspective. However, even this academic is happy to concede that economic considerations alone cannot and should not dictate our foreign policy. For example, many Australians would be pleased that labour and environmental standards are now assuming a place in trade negotiations. But in doing so, let’s at least be clear about the likely benefits of the deal, along with its potential risks.</p><img src="https://counter.theconversation.com/content/4301/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Laurenceson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The task of simultaneously negotiating our traditional security and cultural ties with the US, and our burgeoning economic relationship with China, can justifiably be described as the “great foreign policy…James Laurenceson, Senior Lecturer, School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.