Global Trends by Martin Khor
Monday 31 March 2014
Obama and the TPPA
Barrack Obama’s response to public criticisms on the US trade deals with Europe and Asia-Pacific is less than convincing
The United States President Barrack Obama will soon be making a trip to Asian countries, including Malaysia.
The Trans-Pacific Partnership Agreement (TPPA) will surely be on his agenda, just as the Transatlantic Trade and Investment Partnership (TTIP) was a priority during his trip to Europe last week.
The TTIP is the agreement the US and the European Union are negotiating, a counterpart to the TPPA that the US is negotiating with 11 other Asian and Pacific countries, including Malaysia.
At a live-TV press conference in the Netherlands, Obama responded strong public criticisms against the TTIP and TPPA.
There is no point worrying about the provisions having effects on consumer and environmental protection until the deal is done, he said.
Consumer and environmental protection would in fact be strengthened by trade deals. “I spent my whole political life fighting for consumer protection,” he said, adding there is no ground for worries that companies can take action to weaken consumer and environmental protection.
The President comments on the TTIP presumably apply also to the TPPA since both contain similar provisions, and the criticisms from US and other lawmakers and NGOs also apply to both.
Consumer and health groups have indeed been vocal in their criticisms and protests against the TPPA and TTIP. They include Public Citizen, an organisation of America’s leading consumer advocate Ralph Nader, and Medecins Sans Frontieres (MSF), the Nobel Prize winning medical group.
In Malaysia, groups representing consumers, patients, health and the environment, including the Consumers Association of Penang, Malaysian Council for Tobacco Control, the Malaysian Aids Council and several patients’ organisations, have been actively campaigning against the TPPA.
Obama’s response will not assure the critics. His first point, that there is no point worrying until the deal is done, will hit a raw nerve.
Lawmakers, including in the US Congress, and NGOs in countries involved in the two trade deals, have been disgruntled that the talks are held in secret and that they don’t have access to the texts.
The secrecy of the negotiations, the inability of the public to give feedback, and the lack of legitimacy of the process, is one of the major criticisms against these two trade deals.
Nevertheless, there is enough information, from leaked chapters, and from provisions in existing US free trade agreements, for the public to have a good idea what the trade deals entail.
Obama’s advice that there is no point worrying until the final texts are revealed is likely to earn scorn rather than assurance.
Second, the critics have good reasons to be worried or outraged. These agreements would make it very difficult or even impossible for patients and government health authorities to have access to the much cheaper generic versions of the medicines, because of the tighter patent regime the US is proposing in the TPPA.
As a result, millions of patients could be deprived of life-saving drugs since they, and their governments, cannot afford to buy the branded products.
According to MSF, the first generation of HIV drugs have come down in price by 99% over the last decade, from US$10,000 per person per year in 2000 to roughly US$60 today, thanks to generic production in India, Brazil and Thailand, where these drugs were not patented.
This dramatic price drop enabled HIV/AIDS treatment to be scaled up for over six million people in developing countries.
According to MSF, the US proposals in the TPPA would cause many problems, including extending the term of the patents beyond the already lengthy 20 years, the provision of “data exclusivity” (which will require generic companies to undertake their own costly clinical trials), and widening the scope of what medicines are patentable.
In Malaysia, several patient and medical groups in 2012 issued a joint statement opposing the US proposals, which they say will reduce access to medicines.
oppose US demands for longer and stronger patents on medicines and
medical technologies that are essential to save Malaysian lives,”
said leaders of six groups including the National Cancer Society Malaysia,
Breast Cancer Welfare Association, Malaysian AIDS Council, MTAAG+,
Malaysian Thoracic Society and Malaysian Mental Health Association.
Many other conditions depend on generic medicines, such as cancer, tuberculosis, malaria and diabetes.
They asked that the US proposals be rejected.
But it is not only medicines that are affected. Consumers of information, media and books will be affected by tighter copyright laws that are likely to result in more expensive use of information materials and the internet.
Health groups such as the Malaysian Council for Tobacco Control point out that measures to control cigarette sales, such as requiring plain packaging, will be threatened as the tobacco companies can sue the governments for affecting their revenues.
Under an investor-state dispute system (ISDS) in the TPPA, foreign investors can sue governments in an international tribunal, on grounds that their future revenues are affected by new policies.
Many cases against governments for their health and environmental policies have already brought by companies under free trade agreements that contain this ISDS, and other bilateral investment treaties.
A tobacco firm has sued Australia and Uruguay for their plain-packaging policy. A Swedish company made a US$2 billion claim against the German government for its policy to phase out nuclear power after the Fukushima nuclear accident.
Germany has told the European Commission to exclude the ISDS mechanism in the TTIP, and the Commission has suspended negotiations with the US on ISDS.
In the TPPA, however, the ISDS is still the lynchpin of the whole agreement, as it is a strong enforcement mechanism that hangs over the heads of governments that naturally do not like being sued by companies in an international tribunal for millions or billions of dollars.
Thus, Obama’s assurances that there should be no worries about companies taking action on governments for their consumer and environmental policies ring hollow when many such actions have already been taken under existing US FTAs and other treaties.