tag:theconversation.com,2011:/fr/topics/trans-pacific-partnership-agreement-21203/articlesTrans Pacific Partnership Agreement – The Conversation2021-05-12T12:48:00Ztag:theconversation.com,2011:article/1521482021-05-12T12:48:00Z2021-05-12T12:48:00ZWhat American farmers could gain by rejoining the Asia-Pacific trade deal that Trump spurned<figure><img src="https://images.theconversation.com/files/375184/original/file-20201215-18-1w95l1w.jpg?ixlib=rb-1.1.0&rect=53%2C44%2C6000%2C3853&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Trans-Pacific Partnership agreement covers a broad range of goods and services, including food safety standards. </span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/6_ee0s7d0Ck">Simon Fanger/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The Biden administration has an opportunity to recalibrate American global trade by rejoining the influential Trans-Pacific Partnership trade agreement. Signing on to this partnership has the potential to deliver <a href="https://asia.nikkei.com/Politics/International-relations/Biden-s-Asia-policy/Biden-s-trade-chief-pick-dodges-question-on-rejoining-TPP">powerful diplomatic and economic gains</a> yet politically, the odds appear slim that there will be political consensus to agree to this partnership. </p>
<p>The U.S. began <a href="https://crsreports.congress.gov/product/pdf/R/R44489">Trans-Pacific Partnership</a> negotiations in 2008 during the Bush administration, efforts that were intensified during Barack Obama’s presidency. Hammered out between the <a href="https://www.cambridge.org/core/journals/agricultural-and-resource-economics-review/article/effects-of-tariff-concessions-on-japanese-beef-imports-by-product-and-source/2263506BF6AF507C928F4D1A78A216DB">U.S. and 11 Pacific Rim countries</a>, the intention of joining the partnership was to set trade policy and greatly expand U.S. trade and investment in the Asia-Pacific region. President Obama signed the agreement in 2016 and less than a year later, immediately after Donald Trump’s inauguration, the U.S. <a href="https://theconversation.com/can-the-trans-pacific-partnership-survive-after-trump-71821">withdrew from the agreement</a>. </p>
<p>Rejoining the partnership, renamed the <a href="https://crsreports.congress.gov/product/pdf/IF/IF10000">Comprehensive and Progressive Agreement for Trans-Pacific Partnership</a> in 2018, could signal to the world that the U.S. is back in the global engagement arena. It would also strike a stark contrast to the <a href="https://www.brookings.edu/blog/future-development/2017/02/08/what-will-trumps-embrace-of-bilateralism-mean-for-americas-trade-partners/">previous adminstration’s bilateral</a> and nationalistic approach, <a href="https://cepr.org/content/new-ebook-trade-war-clash-economic-systems-threatening-global-prosperity">which has resulted in tensions with major U.S. trading partners</a>. Aside from improved trade relations, rejoining the this agreement would counter <a href="https://www.wsj.com/articles/obamas-tpp-wouldve-helped-limit-china-11553454969">China’s economic and geopolitical influence</a> in the Asia-Pacific region.</p>
<p><a href="https://scholar.google.com/citations?user=e0WqEuoAAAAJ&hl=en">Both</a> of <a href="https://scholar.google.com/citations?user=3UKxaEcAAAAJ&hl=en">us</a> have worked extensively with the U.S. Department of Agriculture on trade policy issues. As economists specializing in international agricultural trade, our research demonstrates that the U.S. would benefit from rejoining the <a href="https://www.ers.usda.gov/publications/pub-details/">trade accord</a> and, in particular, American agriculture.</p>
<h2>Pathway to a Southeast Asia trade agreement</h2>
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<span class="caption">International trade agreements can reduce uncertainty for trading partners in the marketplace.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/SPPUHSsaT-8">Marco Pregnolato/Unsplash</a></span>
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<p><a href="https://doi.org/10.1111/1746-692X.12293">Regional trade agreements</a> like the Trans-Pacific Partnership can go far beyond tariffs to tackle deeper trade and domestic issues such as investment, labor, migration, competition, intellectual property and, in some cases, key regulatory issues governing food safety standards.</p>
<p>Although agriculture comprises only about 10% of <a href="https://www.usitc.gov/research_and_analysis/trade_shifts_2019/us.htm">total U.S. exports</a>, the agricultural sector in the U.S. and other countries account for a large share of trade policy considerations. Rejoining the accord has the potential to <a href="https://www.piie.com/blogs/trade-and-investment-policy-watch/rebuild-trans-pacific-partnership-back-better">establish economic ties with emerging economies</a> like Vietnam and Malaysia and embrace the need for improved trade relations in Southeast Asia overall. </p>
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<span class="caption">Shipping cranes at the Port of Seattle.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/CpsTAUPoScw">Andy Li/Unsplash</a></span>
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<p>The Comprehensive and Progressive Agreement for Trans-Pacific Partnership could be the easiest path forward if the U.S. wanted to improve trade relations with Southeast Asia. Joining this partnership could be especially beneficial based on the volume of agricultural trade and expected growth in these markets. At an approximate US$14.3 billion annually, Southeast Asia accounts for a significant amount of U.S. agricultural exports, making it the <a href="https://apps.fas.usda.gov/gats/default.aspx">fourth-leading destination</a> behind China, Canada and Mexico.</p>
<p><iframe id="jNqwz" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/jNqwz/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>A return to global engagement</h2>
<p>The Trans-Pacific Partnership was seen as an opportunity for the U.S. <a href="https://www.piie.com/commentary/speeches-papers/tpp-origins-and-outcomes">to shape regional and global trade rules</a>, potentially influencing economic policies and practices in China. However, there are concerns that need to be addressed if the U.S. were to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. </p>
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<span class="caption">Colorful Japanese wine barrels in Tokyo.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/9cYtFg2_N5I">Manuel Velasquez/Unsplash</a></span>
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<p>There are important differences between the agreement signed under Obama in 2016 and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Provisions important to the U.S. were changed <a href="https://www.csis.org/analysis/tpp-cptpp">in the subsequent agreement</a>, such as <a href="https://www.csis.org/analysis/tpp-cptpp">the investment and intellectual property provisions</a> that offered improved standards on intellectual property relative to past trade agreements. The provisions fall short of the more <a href="https://crsreports.congress.gov/product/pdf/IN/IN10822">stringent requirements</a> in the earlier Trans-Pacific Partnership. </p>
<h2>What are the odds?</h2>
<p>Like all trade agreements, joining the partnership would require congressional approval. Historically, Republicans have been more supportive of <a href="https://www.piie.com/research/piie-charts/nearly-all-us-trade-deals-were-negotiated-signed-and-implemented-republicans">trade agreements</a>. But President Trump’s rhetoric, that past trade agreements <a href="https://theconversation.com/trumps-anti-trade-tirades-recall-gops-protectionist-past-54631">have been “disastrous” for the U.S. economy</a>, may have lessened Republican support for an agreement like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.</p>
<p>President Joe Biden quickly rejoined the <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/paris-climate-agreement/">Paris Climate Agreement</a> and reversed President Trump’s decision to withdraw from the <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/21/readout-of-vice-president-harriss-call-with-world-health-organization-director-general-dr-tedros-adhanom-ghebreyesus/">World Health Organization</a>, showing that the U.S. is back in the global engagement area. </p>
<p>Mega-regional trade agreements offer more than a forum for negotiating trade barriers. They establish procedures that reduce uncertainty in international transactions, make rules that are clear to members and provide an institutional framework to remedy trade concerns or disputes. If the Biden administration wants to signal to the world that the U.S. is pivoting to a more expansive global engagement, joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership could be an initial step.</p>
<p>[<em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklysmart">You can get our highlights each weekend</a>.]</p><img src="https://counter.theconversation.com/content/152148/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Muhammad and Jason Grant receive grant funding from the U.S. Department of Agriculture to work on international agricultural trade and trade policy issues. </span></em></p><p class="fine-print"><em><span>Jason Grant receives funding from the United States Department of Agriculture. </span></em></p>Rejoining the Trans-Pacific Partnership would boost trade in Southeast Asia, counter China and help show the world the US is back.Andrew Muhammad, Professor of Agriculture and Resource Economics, University of TennesseeJason Grant, Associate Professor of Agricultural and Applied Economics, Virginia TechLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/906192018-01-24T05:37:26Z2018-01-24T05:37:26ZFarmers and services industry the winners under the revised Trans-Pacific Partnership trade deal<p>The revived trade agreement, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), has finally made it across the line. It’s a considerable win for Australian farmers and service providers, in a trading area <a href="http://dfat.gov.au/trade/resources/trade-statistics/pages/trade-statistics.aspx">worth about</a> A$90 billion.</p>
<p>The 11 remaining countries from the initial Trans-Pacific Partnership agreement finally <a href="http://www.abc.net.au/news/2018-01-24/tpp-resurrected-as-nations-get-set-to-sign-trade-deal/9354502">agreed to go ahead</a> with the deal without the US, at the annual meeting of the World Economic Forum in Davos, Switzerland. </p>
<p>The deal reduces the scope for controversial investor-state dispute settlements, where foreign investors can bypass national courts and sue governments for compensation for harming their investments. It introduces stronger safeguards to protect the governments’ right to regulate in the public interest and prevent unwarranted claims.</p>
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<a href="https://theconversation.com/australias-tenuous-place-in-the-new-global-economy-87346">Australia's tenuous place in the new global economy</a>
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<p>Despite earlier <a href="http://www.smh.com.au/business/workplace-relations/tpp-unions-fear-impact-on-australian-workers-20151005-gk22tj.html">union fears of the impact for Australian workers</a>, the <a href="https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Text/19.-Labour-Chapter.pdf">CPTPP</a> does not regulate the movement of workers. It only has minor changes to domestic labour rights and practices.</p>
<p>The new agreement is more of an umbrella framework for separate yet coordinated bilateral deals. In fact, Australia’s Trade Minister Steven Ciobo <a href="https://www.ft.com/content/7a10d70a-0031-11e8-9650-9c0ad2d7c5b5">said</a>:</p>
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<p>The agreement will deliver 18 new free trade agreements between the CPTPP parties. For Australia that means new trade agreements with Canada and Mexico and greater market access to Japan, Chile, Singapore, Malaysia, Vietnam and Brunei.</p>
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<p>It <a href="http://dfat.gov.au/trade/agreements/tpp/news/Pages/trans-pacific-partnership-ministerial-statement.aspx">means a speedier process</a> for reducing import barriers on key Australian products, such as beef, lamb, seafood, cheese, wine and cotton wool.</p>
<p>It also promises less competition for Australian services exports, encouraging other governments to look to use Australian services and reducing the regulations of state-owned enterprises. </p>
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Read more:
<a href="https://theconversation.com/the-trans-pacific-partnership-is-back-experts-respond-87432">The Trans-Pacific Partnership is back: experts respond</a>
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<p>Australia now also has new bilateral trade deals with Canada and Mexico as part and parcel of the new agreement. This could be worth a lot to the Australian economy if it were to <a href="https://www.aspistrategist.org.au/us-china-trade-war-pay-dividends-australia/">fill commercial gaps</a> created by potential trade battles within North America and between the US and China. </p>
<h2>What’s in and out of the new agreement</h2>
<p>The new CPTPP rose from the ashes of the old agreement because of the inclusion of a <a href="http://dfat.gov.au/trade/agreements/tpp/news/Documents/annex-2.pdf">list of 20 suspended provisions</a> on matters that were of interest for the US. These would be revived in the event of a US comeback. </p>
<p>These suspended provisions involved substantial changes in areas like investment, public procurement, intellectual property rights and transparency. With the freezing of further copyright restrictions and the provisions on investor-state dispute settlements, these suspensions appear to re-balance the agreement in favour of Australian governments and consumers.</p>
<p>In fact, the scope of investor-state dispute settlements <a href="https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Text/9.-Investment-Chapter.pdf">are narrower in the CPTPP</a>, because foreign private companies who enter into an investment contract with the Australian government will not be able to use it if there is a dispute about that contract. The broader safeguards in the agreement make sure that the Australian government cannot be sued for measures related to public education, health and other social services. </p>
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<a href="https://theconversation.com/why-developing-countries-are-dumping-investment-treaties-56448">Why developing countries are dumping investment treaties</a>
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<p>The one part of the agreement <a href="https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Text/12.-Temporary-Entry-for-Business-Persons.pdf">relating to the temporary entry for business people</a> is rather limited in scope and does not have the potential to impact on low-skilled or struggling categories of Australian workers. In fact, <a href="https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Annexes/12-A.-Australia-Temporary-Entry-for-Business-Persons.pdf">it only commits Australia</a> to providing temporary entry (from three months, up to two years) of only five generic categories of CPTPP workers. These include occupations like installers and servicers, intra-corporate transferees, independent executives, and contractual service suppliers. </p>
<p>The above categories squarely match the shortages in the Australian labour market, according to the <a href="https://www.homeaffairs.gov.au/trav/work/work/skills-assessment-and-assessing-authorities/skilled-occupations-lists">Lists of Eligible Skilled Occupation</a> of the Home Affairs Department. </p>
<p>Bits of the original agreement are still included in the CPTPP such as tariffs schedules that slash custom duties on 95% of trade in goods. But this was the easy part of the deal. </p>
<h2>Before the deal is signed</h2>
<p>The new agreement will be formally signed in Chile on March 8 2018, and will enter into force as soon as at least six members ratify it. This will probably happen later in the year or in early 2019. </p>
<p>The geopolitical symbolism of this timing is poignant. The CPTPP is coming out just as Donald <a href="https://www.ft.com/content/ea72a0f6-ffc7-11e7-9650-9c0ad2d7c5b5">Trump raises the temperature</a> in the China trade battle by introducing new tariffs. It also runs alongside China’s attempts to finalise a much bigger regional trade agreement, the 16-nation Regional Comprehensive Economic Partnership. </p>
<p>Even though substantially the CPTPP is only a TPP-lite at best, it still puts considerable pressure on the US to come out of Trump’s protectionist corner.</p>
<p>It spells out the geopolitical consequences of the <a href="https://theconversation.com/in-the-economic-power-struggle-for-asia-trump-and-xi-jinping-are-switching-policies-90173">US trade policy switch</a>, namely that the Asia Pacific countries are willing to either form a more independent bloc or align more closely with Chinese interests. </p>
<p>Will this be enough to convince the Trump administration to reverse its course on global trade? At present, this seems highly unlikely. To bet on the second marriage of the US with transpacific multilateral trade would be a triumph of hope over experience.</p><img src="https://counter.theconversation.com/content/90619/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Giovanni Di Lieto is affiliated with the Australian Institute of International Affairs (AIIA).</span></em></p>The new TPP means fewer barriers for Australian exports, but there a number of loose ends – not least if the United States decides to rejoin.Giovanni Di Lieto, Lecturer, Bachelor of International Business, Monash Business School, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/871762017-11-09T06:00:37Z2017-11-09T06:00:37ZTime for costly medicine monopolies to go from TPP trade talks<p>Negotiators from 11 countries have been racing to resurrect the near-dead Trans-Pacific Partnership Agreement before the Asia-Pacific Economic Cooperation (APEC) summit this weekend.</p>
<p>The latest plan to get the controversial trade deal up and running again after the withdrawal of the United States involves <a href="https://asia.nikkei.com/Politics-Economy/International-Relations/TPP-11-negotiators-make-headway-before-crucial-summit-next-week">freezing some of its controversial rules</a>. These include rules for biologic drugs, an expensive class of medicines often used to treat conditions such as cancer and rheumatoid arthritis.</p>
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<a href="https://theconversation.com/explainer-what-are-biologics-and-biosimilars-45308">Explainer: what are biologics and biosimilars?</a>
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<h2>The market monopoly</h2>
<p>Biologic drugs are <a href="https://theconversation.com/explainer-what-are-biologics-and-biosimilars-45308">produced from living organisms</a> using certain types of cells to produce particular proteins. Biologics have the ability to bind to specific cells, which means they are often more effective and may have fewer side effects than broadly acting drugs. </p>
<p>They are very expensive, particularly when they are under monopoly protection. This is when the drugs can’t be legally copied for a certain amount of time. Governments have accepted the pharmaceutical industry’s proposition that they need this monopoly period to <a href="http://www.palgrave-journals.com/biosoc/journal/v6/n1/abs/biosoc201040a.html">recoup their research and development costs</a>.</p>
<p>For example, pembrolizumab (Keytruda), a drug for metastatic melanoma, <a href="http://www.abc.net.au/news/2015-06-28/melanoma-drug-listed-on-pbs-saving-patients-thousands/6578554">cost patients approximately A$150,000</a> for a year’s treatment before it was subsidised by Australia’s Pharmaceutical Benefits Scheme (PBS). </p>
<p>Once the period of monopoly protection ends, biosimilar medicines (generic versions) can be produced and sold at lower prices. Currently in Australia, once a biosimilar is on the market and listed on the PBS the market prices will drop by about 16% for all brands of the medicine.</p>
<p>Disagreement over the period of monopoly protection for new biologic drugs <a href="https://theconversation.com/how-the-battle-over-biologics-helped-stall-the-trans-pacific-partnership-45648">once brought the negotiations</a> over the Trans-Pacific Partnership (TPP) agreement to a standstill. The final text of the TPP, negotiated before the withdrawal of the United States, includes a controversial provision for monopoly protection for biologics known as data exclusivity.</p>
<p>During the period of data exclusivity, other drug manufacturers wanting to replicate the medicine can’t access the clinical trial data used to demonstrate the safety and efficacy of the original drug to the regulator.</p>
<p>This form of monopoly protection is separate to the period of patent protection. In Australia, the data protection period is currently five years for both biologics and conventional drugs.</p>
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Read more:
<a href="https://theconversation.com/why-biologics-were-such-a-big-deal-in-the-trans-pacific-partnership-48595">Why biologics were such a big deal in the Trans Pacific Partnership</a>
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<p><a href="https://ustr.gov/sites/default/files/TPP-Final-Text-Intellectual-Property.pdf">The final TPP text</a>, pushed by the United States, requires countries who ratify the agreement to provide for eight years of data exclusivity. Or alternatively five years of data exclusivity together with other (unspecified) measures that would still grant the original drug manufacturer a monopoly over the market.</p>
<p>While the industry argues this period is necessary to support innovation, there’s little evidence to validate this claim. <a href="https://www.researchgate.net/profile/Mike_Palmedo/publication/252931412_Do_Pharmaceutical_Firms_Invest_More_Heavily_in_Countries_with_Data_Exclusivity/links/00b7d51f582ee1caf5000000/Do-Pharmaceutical-Firms-Invest-More-Heavily-in-Countries-with-Data-Exclusivity.pdf">One international comparative study</a> found no relationship between the existence of data exclusivity and the amount of pharmaceutical industry investment in a country.</p>
<p><a href="http://www.pc.gov.au/inquiries/completed/intellectual-property/report">Two</a> <a href="https://www.ipaustralia.gov.au/about-us/public-consultations/archive-ip-reviews/pharmaceutical-patents-review">reviews</a> commissioned by the Australian government found no evidence exclusivity for biologic products need be extended.</p>
<h2>The prohibitive cost</h2>
<p>While there’s no evidence to support this form of monopoly protection, there is significant evidence of the costs for Australian taxpayers when there are monopolies on biologics.</p>
<p><a href="http://www.publish.csiro.au/AH/AH17031">New research in the Australian Health Review</a> shows biologic drugs cost Australia’s PBS over A$2 billion in the year 2015-2016 alone. If cheaper biosimilar versions of these medicines had been available in 2015/2016, at least A$367 million would have been saved.</p>
<p>Modelling shows annual PBS spending on biologics could be reduced by as much as 24% through the timely availability of biosimilars.</p>
<p>The TPP’s rules for biologic medicines could not only keep these biosimilars out of reach for longer, but also put hundreds of millions in PBS savings at risk. This is unless the negotiators agree to remove these rules completely from the revamped TPP.</p>
<h2>Intellectual property and the TPP</h2>
<p>TPP negotiators should also seek to drop <a href="http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1001970">a suite of other intellectual property measures</a> that would extend pharmaceutical monopolies in several of the low- and middle-income countries participating in the remaining TPP-11 discussions. </p>
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Read more:
<a href="https://theconversation.com/how-the-battle-over-biologics-helped-stall-the-trans-pacific-partnership-45648">How the battle over biologics helped stall the Trans Pacific Partnership</a>
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<p>These include measures to make it easier to obtain patents, extend patent terms, grant periods of data exclusivity for non-biologic drugs, and prevent drug regulatory authorities from approving generic drugs when patent holders claim potential infringement.</p>
<p>These provisions would likely delay generic medicines in several low- and middle-income countries participating in the negotiations. A <a href="http://journals.sagepub.com/doi/abs/10.1177/1468018117734153?ai=1gvoi&mi=3ricys&af=R">recent study</a> of the potential impact of TPP intellectual property measures for participating countries demonstrated different outcomes for high- and low-income countries. If these provisions remain in the TPP, low income countries would suffer, as they wouldn’t be able to provide cheaper medications to their people.</p>
<p>High-income countries, in contrast, would experience little change regarding access to medicines as a result of the TPP. Australia, for example, has already implemented these measures (aside from those affecting biologics) and would not have to make legislative changes. </p>
<p>But Australia and other high-income countries would become locked into these provisions, making it difficult for future governments to amend their domestic laws. Australia’s independent <a href="https://www.ipaustralia.gov.au/about-us/public-consultations/archive-ip-reviews/pharmaceutical-patents-review">Pharmaceutical Patent Review</a> panel recommended Australia should be working to reduce the length of patent term extensions.</p>
<p>The TPP-11 discussions provide an opportunity for negotiators to rectify some of the most contentious and politically unacceptable elements in the TPP, and drop them from the agreement.</p><img src="https://counter.theconversation.com/content/87176/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 has received research funding in the past from the Australian Research Council. She has received funding from various national and international non-government (not-for-profit) 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 trade agreements and public health.</span></em></p><p class="fine-print"><em><span>Joel Lexchin receives funding from the Canadian Institutes of Health Research. He is affiliated with Health Action International.</span></em></p><p class="fine-print"><em><span>Hazel Moir and Ruth Lopert do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Negotiators from 11 countries have been racing to resurrect the near-dead Trans-Pacific Partnership Agreement before the Asia-Pacific Economic Cooperation (APEC) summit this weekend.Belinda Townsend, Research Fellow, NHMRC Centre for Research Excellence in the Social Determinants of Health Equity, School of Regulation and Global Governance, Australian National UniversityDeborah Gleeson, Senior Lecturer in Public Health, La Trobe UniversityHazel Moir, Adjunct Associate Professor; economics of patents, copyright and other "IP", Australian National UniversityJoel Lexchin, Affiliate - pharmaceutical policy, University of SydneyRuth Lopert, Adjunct professor, Department of Health Policy & Management, George Washington UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/781052017-05-29T06:39:34Z2017-05-29T06:39:34ZTrans Pacific Partnership to forge ahead without the US – at least for now<p>Free trade used to be a rallying cry for mainstream North American politicians. Back in the 1980s, Canada’s then prime minister, Brian Mulroney, campaigned successfully on the idea that <a href="https://books.google.com.hk/books?id=0Ol3Otvbuw0C&pg=PA413&lpg=PA413&dq=Brian+Mulroney,+%E2%80%9Cjobs,+jobs,+jobs%22&source=bl&ots=ZYi1_XjTbC&sig=2vKgUegwm2sm7JMpjKSvuc4ioS0&hl=en&sa=X&ved=0ahUKEwiD_JfE14XUAhWLpo8KHU5zDS8Q6AEINDAD#v=onepage&q=Brian%20Mulroney%2C%20%E2%80%9Cjobs%2C%20jobs%2C%20jobs%22&f=false">trade agreements</a> would <a href="https://www.socialism.com/drupal-6.8/articles/dateline-canada-proof-positive-nafta-kills-jobs">create</a> “<a href="http://www.cbc.ca/archives/entry/brian-mulroney-campaigning-for-a-parliamentary-seat-in-central-nova">jobs, jobs, jobs</a>”. </p>
<p>Today, such a slogan could well be political suicide. Indeed, during last year’s US presidential campaign, the only common ground among <a href="https://berniesanders.com/press-release/sanders-the-only-candidate-who-fought-job-killing-trade-deals/">Bernie Sanders</a>, <a href="https://www.theatlantic.com/politics/archive/2015/10/hillary-clinton-abandons-obama-on-trade/409546/">Hillary Clinton</a> and <a href="https://www.theatlantic.com/business/archive/2016/11/tpps-death-wont-help-the-american-middle-class/507683/">Donald Trump</a> was their contempt for the “<a href="https://berniesanders.com/candidates-must-take-a-firm-stand-on-the-job-killing-tpp-deal/">job killing</a>” Trans-Pacific Partnership (TPP) trade deal among American and Asian countries.</p>
<p>And within a few days of reaching office, President Trump <a href="http://www.businessinsider.com/sanders-mccain-trump-trans-pacific-partnership-2017-1">pulled the US out of the agreement</a>. But it now seems that news of the deal’s demise was premature. </p>
<p>At least for now, the 11 other countries party to the agreement – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – are <a href="http://www.bbc.com/news/39990686?ocid=global_bbccom_email_21052017_business">forging ahead</a>, even without the participation of the world’s largest economy.</p>
<h2>Understanding free trade</h2>
<p>Often lost in the fiery rhetoric about free trade agreements, such as the TPP, is their true economic benefit. Trade deals aren’t meant to be about jobs in this or that industry. They’re about raising a country’s overall productivity and prosperity.</p>
<p>In the short term, tariffs may seem beneficial as they allow less efficient homegrown companies to hire more and produce more. And, with free trade, <a href="http://www.imf.org/external/pubs/ft/fandd/basics/trade.htm">foreign competition dislodges local suppliers</a> and <a href="https://www.stlouisfed.org/on-the-economy/2015/june/how-international-trade-affects-the-us-labor-market">employment in certain industries falls</a>.</p>
<p>But what’s overlooked in these simple scenarios is the longer-term price of protectionism. While tariffs prop up some businesses, they <a href="http://www.jstor.org/stable/2006548?seq=1#page_scan_tab_contents">limit the international flow of resources</a> to most others.</p>
<p>Free trade, on the other hand, <a href="http://onlinelibrary.wiley.com/doi/10.1111/1468-0262.00467/full">bolsters productivity</a>. Once countries enter an agreement, resources naturally move around to the more efficient industries at home and abroad. </p>
<p>All countries tend to benefit from this shared increase in productivity – and, yes, from job creation in the long run.</p>
<p>Equally important, productivity usually rises for all countries in <a href="https://academic.oup.com/restud/article/75/1/295/1629450/Market-Size-Trade-and-Productivity">direct proportion to the size of the common market</a>. The larger the scope of the trade agreement and the more countries involved, <a href="https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp091906a">the better for everyone</a>. The reason is simple: an exporting industry now has access to many more markets, with the associated economies of scale reducing costs and increasing profits.</p>
<p>Without the US in the TPP, scale effects will certainly be much smaller. But the productivity effects of new markets remain attractive. Unless, that is, the US exit prompts TPP members to consider that agreement redundant because of the <a href="http://nationalinterest.org/feature/tpp-vs-rcep-america-china-battle-control-pacific-trade-14021">Regional Comprehensive Economic Partnership</a> (RCEP). </p>
<p>This partnership was first conceived as a regional trade agreement to enhance economic ties <a href="http://www.reuters.com/article/us-trade-tpp-rcep-idUSKCN0S500220151011">between the ten members of the Association of Southeast Asian Nations</a> (ASEAN): Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. It then expanded to include China, Japan, South Korea, India, Australia and New Zealand. And <a href="https://www.pressreader.com/china/global-times/20161123/281487865946077">China has strongly backed the RCEP</a> since the TPP was announced.</p>
<p>Over time, the agreement’s design evolved to <a href="http://www.reuters.com/article/us-trade-tpp-rcep-idUSKCN0S500220151011">become an alternative</a> to the TPP, serving as a proxy for a political battle between the US and China. No more.</p>
<h2>Winners and losers</h2>
<p>Most TPP signatories are already part of the RCEP. That agreement comprises 16 countries and the TPP now has 11. Canada, Chile, Mexico and Peru belong to the TPP but not the RCEP. China, India and South Korea are in the RCEP but not the TPP. Meanwhile, China and South Korea are <a href="http://www.cnbc.com/2017/03/14/china-south-korea-join-tpp-members-in-trade-talks.html">having talks</a> with the other countries in the TPP.</p>
<p>For the Latin American countries, access to the Chinese and South Korean markets through the RCEP would be significant. After all, the US already has lower tariffs on average than emerging markets; Mexico and Canada are part of NAFTA; Chile has had an agreement with the US <a href="https://ustr.gov/trade-agreements/free-trade-agreements/chile-fta">since 2004</a>; and while Peru does not have an exclusive trade agreement with the US, it has had a promotion agreement to liberalise the services trade <a href="https://ustr.gov/trade-agreements/free-trade-agreements/peru-tpa">since 2009</a>. </p>
<p>Even with the US departure from the TPP, Canada, Chile, Mexico and Peru are well positioned for US trade through other agreements.</p>
<p>For the Asian countries, losing privileged access to the American market is certainly a blow, since geographical proximity and other economic ties already give them access to the Chinese and South Korean markets.</p>
<p>The reason trade agreements are not more plentiful is because <a href="https://theconversation.com/redesigning-nafta-is-not-a-bad-idea-if-workers-rather-than-vested-interests-win-76861">vested interests usually fight</a> tooth and nail to maintain their privileged position in local markets. Local companies tend to play the nationalist card – we create jobs! – and advance only a myopic view to convince politicians to abandon free trade deals. </p>
<p>Importing industries are <a href="https://www.econstor.eu/bitstream/10419/26285/1/559514182.PDF">less productive than exporting industries</a>. This is intuitive. If an importing industry were more efficient than the rest of the world, it would not be an importing industry in the first place.</p>
<h2>More than trade</h2>
<p>What is also lost in discussion is that the TPP is much more than a simple trade agreement. It also covers services and intellectual property. </p>
<p>While the US trade deficit in the first quarter of 2017 was approximately <a href="https://www.bea.gov/international/">US$65 billion a month</a>, the surplus in services offset a third of it. US exports in the service sector include <a href="https://www.bea.gov/newsreleases/international/trade/2017/trad0317.htm">over US$10 billion in royalties</a> on the use of American intellectual property. </p>
<p>The TPP would have been highly beneficial to the interests of the US software, publishing and financial firms. But to try to recapture the way of life of the 1950s, American politicians are forgetting about the industries of the 21st century. </p>
<p>At any rate, a zero trade deficit is a mirage in the case of the US. The country does not lose by importing more than it exports. It just means that it’s productive in other sectors. The <a href="https://www.bloomberg.com/news/articles/2017-03-01/trump-trade-friction-overlooks-america-s-huge-surplus-in-services">American financial sector is particularly strong</a> worldwide. </p>
<p>By withdrawing from the TPP, the US left a significant gap, as the total size of the trade agreement shrunk considerably. </p>
<p>The RCEP may fill it, or the countries may forge ahead without the US. It won’t be the same without the American market, but it should still bring enough benefits for the remaining countries to make it worthwhile to go through the trouble of enacting it.</p>
<p>While it may have been politically expedient, candidate – and now President – Trump was absolutely wrong when he said that “<a href="http://time.com/4386335/donald-trump-trade-speech-transcript/">trade reform</a> and the negotiation of great trade deals is the quickest way to bring our jobs back to our country”. </p>
<p><a href="http://www.apec.org/Press/News-Releases/2017/0516_tran">Globalisation is inevitable</a> and irreversible, as Vietnam’s president recently mentioned. </p>
<p>Most economists agree that free trade generates wider and greater benefits, and that’s why the US used to be a big promoter of deals such as the TPP. </p>
<p>The current US flip-flop is bad for the World Trade Organisation, which is likely to <a href="https://www.wto.org/english/news_e/news17_e/anti_10may17_e.htm">see more anti-dumping cases</a> (a dispute when <a href="https://www.wto.org/english/docs_e/legal_e/19-adp_01_e.htm">a country accuses another</a> of exporting goods at less than their normal value) by and against the US; for multilateral agreements, such as the TPP; and for the world, as protectionist talk increases the probability of trade wars.</p><img src="https://counter.theconversation.com/content/78105/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rodrigo Zeidan 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 TPP should still bring enough benefits for the remaining countries to make it worthwhile to go through the trouble of enacting it.Rodrigo Zeidan, Associate Professor, NYU Shanghai and Fundação Dom Cabral, NYU ShanghaiLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/685242016-11-09T12:16:00Z2016-11-09T12:16:00ZWhy a Trump victory bodes ill for Africa<figure><img src="https://images.theconversation.com/files/145233/original/image-20161109-19051-jpbjm0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Donald Trump's election is bad news for the African continent.</span> <span class="attribution"><span class="source">Mike Segar/Reuters</span></span></figcaption></figure><p>Like many, I didn’t think it could be true. <a href="http://www.nytimes.com/">President Donald J Trump</a> just seemed so implausible given the many profoundly concerning revelations about the Republican Party nominee’s personal views on women, the state, migration and migrants, Muslims, and even taxes. How, in 2016, could an individual who thinks it’s okay to grope women, build a wall to keep migrants out, ban Muslims, call Mexicans rapists, and brag about avoiding taxes be <a href="https://theconversation.com/the-fear-election-63492">at all appealing</a> to the American electorate? </p>
<p>Well, that implausibility has become the new reality. The world will be ruminating over this for some time to come. </p>
<p>I won’t lie, I am profoundly concerned about <a href="http://www.nytimes.com/2016/11/09/world/donald-trumps-victory-promises-to-upend-the-international-order.html?action=click&pgtype=Homepage&clickSource=story-heading&module=span-abc-region&region=span-abc-region&WT.nav=span-abc-region">the implications of Trump’s election for international affairs</a>, and particularly for American foreign policy in Africa. Here is why.</p>
<h2>An inward looking US</h2>
<p>A key strategy for President-elect Trump is to turn the US inward, both economically and politically. Many of his economic policies reflect a mercantilist perspective on economic development. This can be summed up as being the opposite to free trade. </p>
<p>Trump <a href="http://www.nytimes.com/2016/10/04/upshot/donald-trump-trashes-nafta-but-unwinding-it-would-come-at-a-huge-cost.html">is on record</a> opposing the Trans Pacific Partnership trade deal and wishes to renegotiate the North American Free Trade Agreement to improve the context for American business. One can only assume that such logic will persist and extend into areas like the <a href="http://trade.gov/agoa/">African Growth and Opportunities Act</a>. This gives certain African exports preferential access to the American market. If this agreement is cancelled, African producers will lose tariff free access to an important market to sell their goods – likely leading to job losses and economic decline. </p>
<p>Other signs of the turn inward can be seen in his desire to focus on domestic infrastructure projects as a means of growing the American economy rather than on international cooperation agreements with other states. </p>
<p>Love it or hate it, American financial capital is important to African development. In 2015 alone US <a href="http://www.usnews.com/opinion/economic-intelligence/2015/03/24/china-beating-us-in-race-to-invest-in-africa">$14 billion</a> poured in. Having less investment coming to African states does not spell good news regardless of how much some believe China pitches in.</p>
<p>Further, unlike the Obama administration which believed that it maintained a degree of responsibility for assisting development in other states, Trump has given no indication that he or anyone within his inner circle holds similar views. With the economic turn inwards and the focusing of American resources on its narrowly defined “self-interest”, I hazard to guess that US development assistance will also be affected. </p>
<h2>Increased divisions</h2>
<p>To gain votes President-elect Trump sought to use immigration and migrants, particularly Muslims and Latinos, as a wedge to reinforce stereotypes and normalise prejudice. For a continent beset by the legacies of stereotypes and prejudice, this can hardly be a good sign of things to come for Africa in terms of its relations with the US. </p>
<p>We know that in contexts where people turn away from each other and seek to marginalise difference politically and economically, extremism and hatred emerge. This will do little to stem radicalism on the continent and the growing disquiet in race, ethnic, and religious relations between countries.</p>
<h2>The threat to international security</h2>
<p>International security and conflict under a Trump administration is probably the most worrying facet of his election. In international relations speak, Trump is what we call a “hawk”. This is someone who seeks to use power to dominate and coerce others into doing their bidding.</p>
<p>Here is a man who <a href="http://www.economist.com/news/united-states/21709565-hillary-clintons-foreign-policy-would-be-similar-barack-obamas-donald-trumps-would-be?fsrc=scn/tw/te/pe/ed/worldshaking">believes</a> the world needs more nuclear weapons rather than fewer. He’s antagonistic towards China and Iran, and believes the use of force is the best way to solve conflict. </p>
<p>We can expect an American foreign policy to be dominated even more by questions of security than it is now. And, I fear, the use of force will be far more readily considered and employed that it seems to have been for the last eight years. </p>
<p>The implications of this for Africa are real as a number of states continue to deal with civil or insurgency conflict. How the US under a Trump administration will engage in conflict is a big and concerning question.</p>
<h2>Collective action will be difficult</h2>
<p>Overall, the election of Trump spells a difficult road ahead for global cooperation around important collective issues, like climate change. Trump <a href="http://www.cbsnews.com/pictures/wild-donald-trump-quotes/13/">believes that climate change is a Chinese invention</a> and <a href="http://www.bbc.com/news/election-us-2016-36401174">has committed to cancelling</a> the Paris Climate Change Agreement.</p>
<p>In a moment where the international community needs to be coming together to solve collective problems, President-elect Trump appears more interested in taking the US on its own path. After eight years of this under George W. Bush, we know what the consequences will be. Deferring action on climate change will have disastrous consequences for states battling related problems like drought, extreme weather events and rising sea levels. </p>
<p>Sadly, African states will suffer in this context of decreased global cooperation and appreciation for the common but differentiated responsibility that developed countries, like the US, maintain. In a new era of crass power politics, African states will only be marginalised further from western dominated decision-making.</p>
<p>What’s the positive coming from this moment for Africa? Not much – other than that the checks and balances within the American political system will not give Trump a blank cheque to do with as he pleases. This is true even though Republicans remain dominant in the <a href="http://edition.cnn.com/2016/11/08/politics/congress-balance-of-power-2016-election/index.html">country’s other legislative branches</a>. </p>
<p>Sadly, I foresee a global order emerging that will be less about cooperation and more defined by division.</p><img src="https://counter.theconversation.com/content/68524/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David J Hornsby 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>A key strategy for President-elect Trump is to turn the US inward, both economically and politically. This bodes badly for Africa.David J Hornsby, Associate Professor in International Relations & Assistant Dean of Humanities, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/642912016-09-05T01:30:04Z2016-09-05T01:30:04ZIf the TPP dies, Australia has other game changing trade options<p><a href="http://www.bilaterals.org/?obama-puts-congress-on-notice-tpp">Despite last-minute efforts by the Obama administration</a>, the US Congress’ ratification of the <a href="http://dfat.gov.au/trade/agreements/tpp/pages/trans-pacific-partnership-agreement-tpp.aspx">Trans-Pacific Partnership (TPP) agreement</a> is <a href="http://www.wsj.com/articles/tpp-trade-deals-odds-fade-1469822992">in serious danger</a>. </p>
<p>The <a href="https://theconversation.com/au/topics/globalisation-backlash-29119">globalisation backlash</a> has extended to Democratic nominee Hillary Clinton, who has also turned her back on the TPP. <a href="http://www.economist.com/news/finance-and-economics/21704789-shifts-global-trade-patterns-are-fuelling-new-anti-trade-fervour">Progressive Americans remain concerned</a> with the role of free trade in rising levels of socioeconomic inequality. </p>
<p>But running alongside the crippled TPP, and potentially of more importance to Australian trade, has been the <a href="http://dfat.gov.au/trade/agreements/rcep/pages/regional-comprehensive-economic-partnership.aspx">Regional Comprehensive Economic Partnership</a>. Essentially, the RCEP is a free trade agreement (FTA) between the ten ASEAN members and the six countries with which ASEAN has existing FTAs. This includes Australia, China, India, New Zealand, Japan and South Korea. The 16 member states of the RCEP have agreed to finalise negotiations on the agreement <a href="http://www.bilaterals.org/?rcep-members-to-finalise-pact">before the end of this year</a>.</p>
<p>If, as seems likely, the RCEP is accomplished in the near future, it will be the world’s largest free-trade agreement, covering a population of 3.5 billion, or more than 50% of the world total, and about 40% of the world trade volumes. Based on the latest figures released by both the <a href="https://www.wto.org/english/res_e/statis_e/statis_e.htm">World Trade Organization</a> (WTO) and the <a href="http://dfat.gov.au/trade/resources/trade-statistics/Pages/trade-statistics.aspx">Australian Department of Foreign Affairs and Trade</a> (DFAT), the percentages below show the greater significance of RCEP to Australia’s global trade.</p>
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<p>Given the TPP agreement may never enter into force due to the <a href="http://fortune.com/2016/05/05/trans-pacific-partnership-ratification/">uncertain political landscape in the US</a>, Australia and the other six countries (New Zealand, Japan, Singapore, Malaysia, Brunei and Vietnam) that are members to both the TPP and the RCEP are focusing their international trade policies on the latter economic partnership. </p>
<h2>India’s change of tack may benefit Australia</h2>
<p>Australian food, wine and dairy sectors can make huge gains from India’s openings on the Regional Comprehensive Economic Partnership (RCEP) negotiations. This is because India recently changed negotiating strategy. For the first time, <a href="http://economictimes.indiatimes.com/news/economy/policy/india-ready-to-abolish-tariff-structure-if-rcep-promises-fdi/articleshow/53626290.cms">India signalled flexibility</a> to adopt a single-tier approach on tariff reduction in exchange for increased foreign direct investment (FDI). </p>
<p>The RCEP was somewhat stalling on India’s intention to group trading partners within the region into different tiers. The TPP had readily adopted a single tier approach on tariff reduction, albeit to be phased out over long periods, up to 20 years. </p>
<p>To date, of all the RCEP countries, India has signed FTAs only with ASEAN, South Korea and Japan, leaving out Australia, New Zealand and China.</p>
<p>For the Australia-India trade relationship, the difference between a single or three-tiered approach to tariff reduction would be significant. Previously, India offered an 80% tariff reduction to the ten ASEAN countries in tier-I; in tier-II, 65% to Japan and South Korea; whereas in tier-III, only 42.5% to Australia, New Zealand and China. The disadvantage to Australian companies wishing to access the large Indian markets of goods and services would have been significant.</p>
<p>Single-tier tariff reduction in India could prove a boon to the Australian food, wine and dairy sectors, particularly for the latter at this time of struggles caused by the milk price cuts in Australia and the <a href="https://theconversation.com/milk-price-cuts-reflect-the-reality-of-sweeping-changes-in-global-dairy-market-59251">reduced demand from China and Russia</a>.</p>
<h2>Is India’s end game compatible with Australian interests?</h2>
<p>Unlike Australia and the more developed RCEP nations, India has a strategic interest in greater liberalisation of trade and investment in IT-enabled services (ITES). For instance, India has traditionally been pursuing an easier visa regime for the movement of IT and other service professionals in service-oriented developed countries. </p>
<p>On top of that, India’s appetite for foreign capital is also growing significantly. In 2015 <a href="http://www.ibef.org/economy/foreign-direct-investment.aspx">India overtook China as the world’s top foreign direct investment</a> (FDI) destination with US$63 billion of FDI. This included high-value project announcements across the coal, oil and natural gas, and renewable energy sectors. </p>
<p>However most RCEP members are hesitant to further open up access for Indian IT service providers. On investment issues too, there is a clash between the interests of India and other RCEP member countries. For instance, there is a rising competition among cash-hungry countries, <a href="https://infrastructure.gov.au/infrastructure/fdis/index.aspx">such as Australia</a>, for <a href="http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD">China’s growing interest to invest capital overseas</a> in large infrastructure projects.</p>
<p>Despite timid improvements in recent times, <a href="http://blogs.wsj.com/indiarealtime/2016/06/01/indias-competitiveness-and-prosperity-rankings-rise-under-modi/">India is still one the least competitive economies in the world</a>. It punches below the weight of its huge market size and diversity, particularly in agriculture commodities and manufactured goods. </p>
<p><a href="http://www.res.org.uk/details/mediabrief/8964241/SERVICE-SECTOR-REFORM-The-key-to-Indias-growth-ambitions-for-manufacturing.html">Recent economic research</a> shows that India needs to address impediments to domestic and foreign competition in retail, transport, professional and other services before it can fulfil growth ambitions in its key manufacturing sectors.</p>
<p>The key issue will be how India is going to face the export strengths of non-ASEAN RCEP countries. In particular, China, but also South Korea and Japan, pose a significant <a href="http://www.bilaterals.org/?india-s-new-stance-at-rcep-may">threat to India’s manufactured goods</a>. Likewise, Australia and New Zealand have a clear interest for lower tariffs in agriculture commodities to gain <a href="http://www.bilaterals.org/?trade-talks-that-could-milk-india">greater market access in India’s food, wine and dairy sectors</a>. </p>
<p>Ultimately, the levelling of trade-offs in manufactured goods, services and investment with India is likely to make or break the whole RCEP deal. If Australia and the other non-ASEAN RCEP countries strike a far-reaching deal with India, the RCEP is likely to replace the TPP as the most significant (and polarising) free trade agreement of the present time.</p>
<h2>The future for Australia-Trans Pacific trade</h2>
<p>It’s unlikely Australia-Trans Pacific trade will collapse with the failure of the TPP. </p>
<p>Trade ministers from the United States, China and other <a href="http://www.apec.org/">Asia-Pacific Economic Cooperation</a> (APEC) forum nations are already working on a more powerful alternative. The 21 APEC members have recently promoted a <a href="http://www.apec.org/Meeting-Papers/Annual-Ministerial-Meetings/Annual/2015/2015_amm/annexc.aspx">Collective Strategic Study on Issues Related to the Realization of the FTAAP</a>, which is a “Free Trade Area of the Asia Pacific” agreement. The study is on track to be <a href="http://www.bilaterals.org/?apec-ministers-free-trade-area">released later this year</a>.</p>
<p>The study will analyse potential economic and social benefits and costs of the FTAAP. It will identify trade and investment barriers, as well as the broader socio-economic challenges that all 21 APEC forum nations may face in <a href="http://www.apec.org/Meeting-Papers/Annual-Ministerial-Meetings/Annual/2015/2015_amm/annexc.aspx">realising the agreement</a>.</p><img src="https://counter.theconversation.com/content/64291/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Giovanni Di Lieto 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>Australia should look to India rather than the US Congress to secure its next regional trade win.Giovanni Di Lieto, Lecturer, Bachelor of International Business, Monash Business School, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/513902015-12-03T02:43:35Z2015-12-03T02:43:35ZA European Union-Australia trade deal may heal a troubled history<figure><img src="https://images.theconversation.com/files/103838/original/image-20151201-26559-1f2vk6v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Trade relations have been fractious between the European Union and Australia.</span> <span class="attribution"><span class="source">Image sourced from www.shutterstock.com</span></span></figcaption></figure><p>For decades, trade relations between the European Union and Australia have been marked by sourness and rancour. So Prime Minister Malcolm Turnbull’s <a href="http://dfat.gov.au/trade/agreements/aeufta/Pages/aeufta.aspx">announcement</a> last month that Australia will begin working towards a “comprehensive and high-quality” Free Trade Agreement with the EU marks a gradual thawing in relations.</p>
<p>An agreement will ensure trade and investment relationship reaches its full potential by removing trade barriers and expand service linkages and investment ties, while enhancing “regulatory cooperation in specific sectors of interest to business”. The process is expected to take between five and seven years. </p>
<p>The troubled relationship dates as far back as 1975 when the British first entered the European Community (as it was then named), shutting out Australia’s primary products from the UK. </p>
<p>Relations were already strained by the direct subsidies to specific agricultural products and tariffs introduced under the European Common Agricultural Policy (CAP) in the late 1960s. These two events defined Australian EU trade discussions for decades. </p>
<p>Disagreements over market tariffs and agricultural subsidies escalated over time and became a serious international issue. They were further inflamed by personal antagonism between then-Prime Minister Malcolm Fraser and the European Commission President, Roy Jenkins.</p>
<p>As Minister for Special Trade Negotiations, John Howard found Australia was effectively shut out of the EU. His summary of his 1977 Brussels visit was of “seven weeks tramping round Europe, not making a great deal of progress”.</p>
<p>The concern over agricultural subsidies between Australia (and other agricultural producing nations) on the one hand, and the European Community, USA and Japan on the other, led to the creation of the Cairns Group in 1986 (chaired by Australia). </p>
<p>The Cairns Group called for the total elimination of government subsidies for agriculture. Alongside the agricultural issues which continually featured in official discussions between Australia and the European Community, other disputes emerged in the 1990s. One source of irritation was Foreign Minister Alexander Downer’s refusal in 1996 to entertain the insertion of a human rights clause into EU Treaties. </p>
<p>But since the 2000s the trade agenda for both the EU and Australia has changed significantly. Partially as a result of the stalled WTO Doha Round, the trade agenda and search for liberalisation took on new forms. A new phase of regional and bilateral agreements opened, which both the EU and Australia began to pursue. </p>
<p>Moreover on the EU side agricultural subsidies took on a slightly different emphasis and Australia began looking at its export destinations with bilateral agreements. </p>
<p>In addition the Australian economic landscape saw the rise of mining and iron ore especially with a thirsty Chinese market which refocused much of Australia’s approach towards trade. Australia and the EU began to enter a new phase of trade agreements where negotiations worked on the best possible outcome - not necessarily the aspirational objective. </p>
<p>The new lease of bilateral arrangements with trade partners leading to the milestone US Free Trade agreement in 2005 taught Australia some new limits and expectations for trade agreements. The mainly-ignored <a href="http://www.defence.gov.au/publications/mortimerreview.pdf">Mortimer report of 2008</a> referred to the desirability of FTAs, including a European Union one. </p>
<p>Equally agriculture in Australia has taken on a lesser dimension and the agricultural lobby has seen some downscaling with the decline of influence of the National Party as a Coalition partner. </p>
<p>It was the Abbott government which provided some of the circuit breakers with the EU trade agenda, including a possible EU FTA as an election agenda item as early as 2012. An important change was the elevation of Andrew Robb as trade minister, the first time since the 1949 Menzies government that a Liberal rather than National has held the portfolio.</p>
<p>So how is an FTA between the EU and Australia possible today? Both sides have moved on from their entrenched positions, recognising there was little to gain. </p>
<p>Robb has referred to this new possible FTA as a “missing piece” in Australia’s significant array of trade agreements that includes deals with China, Japan and South Korea) and most recently, the Trans Pacific Partnership agreement. </p>
<p>EU and Australian representatives today go to great lengths to highlight the trust and shared values they have in common on security, human rights and foreign policy. The reality is that the few economic advantages can be squandered.</p><img src="https://counter.theconversation.com/content/51390/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruno Mascitelli received funding from the Europe Center at ANU. Bruno is affiliated with European Studies Association of Australia. </span></em></p>Sourness and rancour have marked trade relations between Australia and the European Union. But a trade deal could change that.Bruno Mascitelli, Assoc. Professor, European Studies, Swinburne University of TechnologyLicensed 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.