TPP was never that good for jobs, never that good for growth

If the Trans-Pacific Partnership was really as good for jobs and growth as Malcolm Turnbull says it was, he would be able to point to a study saying so.

He might have even commissioned one. Instead, despite the Productivity Commission practically begging for the role, his government has been resolute in its determination not to subject the 12-nation treaty that Donald Trump just dumped to independent analysis.

An earlier analysis of three landmark trade agreements that the government did commission found that, combined, the Japan, Korea and China agreements were set to create a total of 5434 extra jobs by 2035.

That's 5434 extra jobs after 20 years. According to the Bureau of Statistics, employment is growing at a trend rate of 8200 per month, meaning the extra jobs will amount to less than a month's worth, after 20 years.

The government-commissioned study found that, combined, the agreements would boost exports 0.5 to 1.5 per cent while boosting imports 2.5 per cent, which means they would send Australia's trade balance backwards.

In the absence of an Australian analysis of the agreement Turnbull insists would have produced jobs and growth, one by World Bank found that 15 years on, it would have bolstered Australia's economy just 0.7 per cent, which amounts to 0.05 per cent per year, somewhat less than measurement error.

It's easy to conclude Turnbull is talking up the TPP because he has not much else to talk up.

In any event, it's dead. Its rules say it can only come into force if it is ratified by members accounting for 85 per cent of its combined gross domestic product, which means it can only come into force if it is ratified by the United States, something President Trump has ruled out.

Part of the problem with it, and part of the problem with reviving something like it without the United States, is that it's so darn complicated. That's because in the assessment of James Pearson, head of the Australian Chamber of Commerce and Industry, "so-called free trade agreements never seek free trade".

Much of the TPP dealt with things such as copyright terms, patent protection for drugs, and so-called investor-state dispute settlement procedures that would have allowed foreign corporations to sue sovereign governments. It took a decade to negotiate.

Pearson says if free trade agreements genuinely sought free trade "they would be simple, stating that the parties agree there shall be no restrictions on trade, investment or movement of people between the two countries, full stop".

When even the potential beneficiaries are questioning the value of ever more complex trade agreements, it could be time to take stock.

In The Age and Sydney Morning Herald

Read more >>

The Trans Pacific Partnership is still alive and still capable of doing us harm

Don't for one second think the Trans-Pacific Partnership is dead.

Talks to seal the mega-deal between Australia and 11 other nations representing 40 per cent of the world's economy broke up without agreement in Hawaii on Saturday, but agreement is close.

Those involved say all it needs is for a few of the parties to give ground on a few sticking points and all 25 chapters are ready to go.

The 12 trade ministers could meet again within weeks, before the end of August, and declare the deal done. The United States is desperate to get it signed before its extended election season gets into high gear. Canada has an election in October.

Australia is holding out for wants an exemption from so-called investor-state dispute settlement (ISDS) rules for decisions concerning health and the environment, and has so far held out against measures that would prop up the extraordinarily high prices of biologic drugs. But they are differences creative language could smooth over.

A draft of the investment chapter published by Wikileaks shows that Australia has asked to exempt four organisations, including the Pharmaceutical Benefits Scheme, from ISDS. But the request is in square brackets, indicating other nations don't agree. As a back-up, the chapter includes language almost exempting decisions designed to to protect objectives such as public health, safety and the environment. They would not be subject to ISDS "except in rare circumstances".

What this means in practice is that our Trade Minister Andrew Robb could agree to the clause and say Australia couldn't be sued in external tribunals over decisions concerning health and the environment (as it is now by tobacco giant Philip Morris under a different agreement) and later then down the track find himself in the middle of a "rare circumstance".

The clause wouldn't stop Philip Morris or its ilk suing Australia, it would just make it more likely Australia would win...

So far Australia has shelled out about $50 million defending its plain-packaging laws, even though it will probably win.

Australia's hard line on data protection for biologic drugs could also be softened. Biologic drugs are those made with living organisms. There are horrendously expensive. Soliris treats a rare immune disease. It costs our Pharmaceutical Benefits Scheme $500,000 per prescription. The PBS onsells it for $37.70, or $6.10 if the patient holds a concession card.

To get a drug approved, the manufacturer has to submit data from trials to demonstrate that it works and is safe. After five years that data is available to other firms that might want to make it after the patent expires. The US wants to lift the restriction to 12 years, locking away the data for an extra seven years and keeping prices high.

Data protection is separate to patent protection, which lasts for 20 years. If there's a big delay between the discovery of the drug and its approval, it can be additional to patent protection.

And it works the opposite way. Whereas patents grant exclusivity in return for handing over data, data protection grants exclusivity in return for not handing over data.

"You would have to sit in a committee room for a long time to work out a worse policy," says Nicholas Gruen, a patent expert who has prepared reports for the Australian government. "It grants a monopoly in return for nothing."

The US is reportedly considering a compromise to placate Australia. It's a base period of five years, followed by an extension of three years "under certain circumstances". However meaningful, it would allow both sides to claim they had won.

But even considering the idea makes plain how debauched the whole concept of trade agreements has become. In earlier decades the past trade agreements were unambiguously good for the citizens of the nations involved. They cut prices. This one puts them up. The US is using it it in an attemptto try to keep medicines expensive and the cost of taking on US corporations high. In Canada the pharmaceutical giant Eli Lilly is using an ISDS clause in the North American agreement to sue the government for failing to grant it two patents knocked back on the grounds that they weren't sufficiently innovative. Eli Lilly wants $500 million.

Somehowwhere along the road from the 1980s, trade agreements morphed from pacts designed to cut trade barriers to pacts designed to erect them. Negotiators who had previously worked to advance free trade started working to advance the interests of US corporations.

We saw it first in the early `90s in an odd request from the World Trade Organisation for Australia to extend its patent term from 16 years to 20 years. The then Labor government waved it through, handing existing patent holders an extra four years of high prices. A Productivity Commission study found the decision cost more than $376 million.

From then on the demands kept building, most of them made in secret. Much of what we know about the pact presently being negotiated in our name comes from Wikileaks. US corporations are allowed to see what's in it, ours are not.

Trade negotiating has become an exercise in fighting off bad proposals rather than enabling good ones. 

Gruen wants us to get back to basics. He says before we even start negotiations we should make three things clear: that tougher intellectual property laws hurt consumers; that they also have the potential to hurt producers who themselves rely on intellectual property; and that they can only ever be justified where the benefits exceed the costs.

It would put economics rather than tradeoffs at the heart of trade negotiations. It would give us an idea of what we are doing.

In The Age and Sydney Morning Herald

Read more >>

Trans Pacific Partnership. Why we don't know what we are giving away

The US Senate has given the green light, and Australia is set to buckle. If you don't yet know what TPP stands for, listen up. Our government could sign it within weeks. Only then will we really know what's in it.

That's right. As with the China-Australia Free Trade Agreement and the Japan-Australia Free Trade Agreement, the content of the Trans-Pacific Partnership will remain secret right up until the day it is signed. Afterwards, our parliament will be able to look at it, but not to change it. Alice is inside the looking glass.

A Senate committee reported on the processes surrounding the TPP on Thursday. It said the parliament would be presented with an all-or-nothing choice. It could examine the TPP (after it had been signed) and either vote for or against it, but not change a word.

The Department of Foreign Affairs and Trade was a lone voice at the hearings supporting the present arrangement (even it relented afterwards, allowing members of Parliament to see a copy of the draft TPP in a locked room on the condition that they made no copies themselves, took no notes and breathed not a word to anyone outside the room).

It said anyone who had wanted an input into the agreement could have sent it a submission. But it missed the point. It's hard to know that you need to write a submission if you don't know what's being proposed...

Trish Hepworth of the Australian Digital Alliance said most people when they hear there is going to be a trade agreement don't think: "Oh my goodness,  I run a library; there is a trade agreement; this is going to mean I cannot digitise newspapers past 1955 anymore." Yet she said that is what happened as a result of Australia-US Free Trade Agreement.

The department runs consultation sessions with community groups, providing "over 1000 stakeholder briefings on the TPP alone since 2011", but they have been curiously bereft of information. Alan Kirkland from the consumer group Choice said the meetings take the form of "tell us your views". The Australian Industry group said attending them is like "voicing concerns blindfolded".

It matters because these days so-called trade agreements are about far more than trade. The Productivity Commission insists on calling them "preferential" rather than "free trade" agreements, arguing that they often impede trade. Australia's 1800 agreements overlap and interfere with each other in ways that are hard to see through. In order to get preferential entry to the United States under the US agreement, Australian firms are not allowed to use more than a certain percentage of materials that come from other countries such as New Zealand, even though New Zealand goods are allowed into Australia duty-free, and so on.

A study of the Australia-US free trade agreement 10 years on found it had most probably cut rather than boosted Australian trade. Beforehand we were told it would be worth billions.

Many businesses won't use them. "The paperwork to qualify was so enormous it wasn't worth the effort," said one of the respondents to a Chamber of Commerce survey.

Until four years ago the Stafford Group made Anthony Squires suits at Preston in Melbourne. It had suited up every Australian prime minister from Menzies to Rudd. It was happy to pay duty on the fabric it imported, knowing its New Zealand competitors had to pay it too. Then a changed interpretation of the rules meant New Zealand manufacturers were able to use duty-free cloth to make suits for Australians (although not for New Zealanders). Stafford appealed to prime minister Gillard, was turned down, and moved production to Fiji.

The Trans Pacific Partnership agreement being negotiated between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam holds out the promise of actually breaking down barriers. But the leaks suggest its provisions will be inconsistent with those of existing agreements, creating still more red tape. The Chamber of Commerce and Industry begged the Senate inquiry for a "one in, one out" rule under which obsolete agreements would be cancelled as soon as new ones came into force. It calls the mess we've got: "the noodle bowl".

Last week the US Senate gave President Obama fast-track authority to quickly conclude the Trans Pacific Partnership talks. Leaks published by Wikileaks suggest the big changes for Australia would relate not to trade, but to intellectual property and so-called investor-state dispute settlement. The Coalition's John Howard successfully resisted the incorporation of ISDS provisions into the Australia-US agreement in 2004. This time the US is more insistent. It says there will be no agreement without them.

ISDS clauses allow foreign firms (but not local firms) to sue the Australian government in foreign tribunals over decisions they don't like. A tobacco company is doing it now using the terms of an obscure Hong Kong Australia agreement. The Productivity Commission says the number of ISDS cases worldwide has grown from almost none in 20 years to around 600 today. The Chief Justice of the High Court says they are a threat to national sovereignty.

The Medical Journal says the leaked intellectual property changes seem designed to keep pharmaceutical prices high.

Trade minister Andrew Robb accuses critics of the as -yet-unseen agreement of being anti-trade. But they're not. There's no greater believer in free trade than the Productivity Commission, and few organisations more enthusiastic than the Chamber of Commerce and Industry. It's the new layers of red tape that worry them, and the add-ons – changes to Australian law that wouldn't stand a chance of making it through Parliament if they were proposed and debated in in their own right.

In The Age and Sydney Morning Herald

Read more >>

TPP. We're negotiating for negotiators not for Australians

I get that ordinary Australians don't much like the Trans Pacific Partnership. But businesses?

The deal is being negotiated between the twelve Pacific-facing nations of Australia: the United States, Japan, Canada, New Zealand, Malaysia, Brunei, Singapore, Chile, Mexico, Peru and Vietnam. No-one outside the negotiating teams knows exactly what's in it because the text won't be made public until after it is sealed, quite possibly at a ministers' meeting in Hawaii next month.

Then it'll be too late for Australia to change. That's the way trade agreements work. Our parliament will be able to vote "yes" or "no" to the entire thing, all 20 chapters; but it won't be able to change a word.

Some of the leaks are alarming. They include what British medical journal The Lancet calls an "unprecedented expansion of intellectual property rights that would prolong monopolies on pharmaceuticals and reduce access to affordable and lifesaving generic medicines".

Australia's Pharmaceutical Benefits Scheme spends $1 billion a year on the 10 most expensive of the super-expensive so-called biologic drugs, manufactured from living organisms.

In addition to patent protection, the manufacturers get five years in which the makers of cheaper generics are unable to use their data to prove their alternatives are safe. The US wants to extend the period to eight years. Deborah Gleeson, from La Trobe University, says that would cost the Pharmaceutical Benefits Scheme $205 million a year.

It isn't to facilitate trade. It's a measure to restrict trade. And the TPP is full of them.

In one part buyers of pharmaceutical products (such as Australia's PBS) would be restricted in their ability to offer whatever price they wanted to their suppliers (mainly US-owned pharmaceutical companies), a restriction not normally thought of as advancing free trade. In another, even minor breaches of copyright (such as burning a copyrighted DVD for a friend), would become a criminal rather than a civil offence.

And outside tribunals would be able to adjudicate and impose penalties on Australian governments even after their laws had been found valid by Australia's courts...

It would open the way for alcohol manufacturers to take on Australia over laws requiring labelling, food manufacturers to take on Australia over anti-obesity campaigns and mining companies to sue Australia over environmental regulations, as happens in Canada under the provisions of the North American Free Trade Agreement.

Australian businesses ought to love the TPP. They would get the ability to take on 11 other governments in overseas tribunals, and to the extent that they export intellectual property (Australia is a net importer) they would benefit from the criminalisation of copyright breaches.

But would they actually be able to sell much more product.

It looks as if they wouldn't. The department of foreign affairs and trade said Australia's mega trade deal with the United States, signed 10 years ago, would boost Australia's gross domestic product by $5.7 billion. However, 10 years on, the Australian National University says it has not boosted trade at all. A US Department of Agriculture study says the agricultural component of the  TPP will not boost Australia's GDP at all.

None of which would matter much if agreements such as the TPP weren't so expensive to negotiate and didn't create so much red tape.

The Australian Chamber of Commerce and Industry wants the direct costs of negotiating each treaty reported to parliament. And it wants annual assessments of how they are turning out. Like government spending on roads and on events such as the Olympic Games, there are always plenty of forecasts of the benefits before the agreements are signed, but rarely any follow up.

It also wants the "noodle bowl" of overlapping and conflicting agreements cleaned up. Australia has 12 free trade agreements, each with its own compliance rules. Some involve the same countries, but the superseded agreements are never terminated.

Australia hasn't acceded to the international treaty which would require each of its agreements to be consistent with each of the others. The TPP is the latest which won't be.

An unpublished survey of ACCI members find most neither understand nor use Australia's free trade agreements.  

"In my experience, they have been a waste of time, particularly Thailand. The paperwork to qualify was so erroneous it wasn't worth the effort," said one member.

"I know we have one with the US and I know there is one now with Japan and Korea - is that correct?" said another.

Where they do try to comply, their goods are often stopped at the docks and on the other side charged the full rate of duty because the officials don't know about them. Australia doesn't collect information about how many of our goods get through.

The Chamber's submission to the Senate inquiry into the treaty-making process is damning. It wants the secrecy by which the agreements are negotiated opened up so that community and business groups are taken into the confidence of the negotiators in real time, as happens in the United States.

It's how climate change negotiations are handled. It seems to do no harm.

Its most important recommendation is that the Productivity Commission assess the worth of the agreements as they are being negotiated in real time. It would put a stop to many of the agreements that are being negotiated in our name. It might even put a stop to the TPP.

In The Age and Sydney Morning Herald


Related Posts

. Now business wants more open trans pacific partnership negotiations

. Trans Pacific Partnership. What is being negotiated in our name?

. Trans Pacific Partnership a threat to health, says assessment

Read more >>

Now business wants more open trans pacific partnership negotiations

Australia's largest business organisation has called for the government to open up the negotiation of trade deals such as the Trans Pacific Partnership.

As the Trade Minister Andrew Robb responded to criticism of his actions in keeping the text of the Trans Pacific agreement secret, the Australian Chamber of Commerce and Industry said it wanted negotiations to be monitored in real time by the Productivity Commission and wanted draft texts disclosed to registered community and business organisations as happens in the US.

Criticised for keeping the negotiations secret in a so-called health impact statement released by the University of NSW Centre for Health Equity Training Research and Evaluation, Mr Robb said the text of the agreement would be made public as soon as it was agreed between the 12 nations.

"The text will not be kept secret. Once it is agreed between participants, it will be made public and also subjected to parliamentary scrutiny," he said.

"Since 2011, the Department of Foreign Affairs and Trade has conducted more than 1000 briefings with interested stakeholders, including groups representing health, pharmaceuticals, consumers and unions."

The ACCI wants negotiating drafts to be shown to community and business groups who would then be under an obligation to keep them confidential.

Negotiators would retain their power to conclude deals without reference to the parliament but would be required to "properly consider and balance the merits of civil society's views at all phases of negotiationTrans Pacific PartnerTrans Pacific Partnership

In Australia the parliament can accept or reject but cannot amend agreements negotiated by the minister.

The ACCI also wants the direct costs to the government of negotiating treaties to be clearly identified in future budgets. Its director of trade and international affairs Bryan Clark said the Australian community had no idea how much money had been spent negotiating the Trans Pacific Partnership and so was unable to judge the worth of exercise.

Mr Robb said last month Australia takes 22 specialists to each negotiation backed up by teams at home. The US takes 80.

Mr Clark said Australia collected no data on how trade deals were actually used after they were completed and was unable to quickly support businesses that found the concessions negotiated were not offered when their goods arrived at docks in other countries.

The chamber's submission to the Senate's inquiry into the treaty-making process says Australian negotiators do little to ensure that each new trade treaty is consistent with existing ones leading to a mish-mash of overlapping treaties that interfere with each other.

In The Age and Sydney Morning Herald


Related Posts

. Trans Pacific Partnership. What is being negotiated in our name?

. Trans pacific partnership. What's being built under our noses

. Trans Pacific Partnership a threat to health, says assessment

Read more >>

Now business calls on the government to open up the Trans Pacific Partnership negotiations

Australia's largest business organisation has called for the government to open up the negotiation of trade deals such as the Trans Pacific Partnership.

As the trade minister Andrew Robb responded to criticism of his actions in keeping the text of the Trans Pacific agreement secret, the Australian Chamber of Commerce and Industry said it wanted negotiations to be monitored in real time by the Productivity Commission and wanted draft texts disclosed to registered community and business organisations as happens in the United States.

Criticised for keeping the negotiations secret in a so-called health impact statement released by the University of NSW Centre for Health Equity Training Research and Evaluation, Mr Robb said the text of the agreement would be made public as soon as it was agreed between the twelve nations.

"The text will not be kept secret. Once it is agreed between participants, it will be made public and also subjected to parliamentary scrutiny," he said.

"Since 2011, the department of foreign affairs and trade has conducted more than 1000 briefings with interested stakeholders, including groups representing health, pharmaceuticals, consumers and unions."

The Chamber of Commerce wants negotiating drafts to be shown to community and business groups who would then be under an obligation to keep them confidential.

Negotiators would retain their power to conclude deals without reference to the parliament but would be required to "properly consider and balance the merits of civil society's views at all phases of negotiation"...

In Australia the parliament can accept or reject but cannot amend agreements negotiated by the minister.

The Chamber also wants the direct costs to the government of negotiating treaties to be clearly identified in future budgets. Its director of trade and international affairs Bryan Clark said the Australian community had no idea how much money had been spent negotiating the Trans Pacific Partnership and so was unable to judge the worth of exercise.

Mr Robb said last month Australia takes 22 specialists to each negotiation backed up by teams at home. The United States takes 80.

Mr Clark said Australia collected no data on how trade deals were actually used after they were completed and was unable to quickly support businesses that found the concessions negotiated were not offered when their goods arrived at docks in other countries.

The Chamber's submission to the Senate's inquiry into the treaty-making process says Australian negotiators do little to ensure that each new trade treaty is consistent with existing ones leading to a mish-mash of overlapping treaties that interfere with each other.

In The Age and Sydney Morning Herald


Related Posts

. Trans Pacific Partnership a threat to health, says assessment

. Trans Pacific Partnership. What is being negotiated in our name?

. Patents. The rules that hurt the Australian drug industry

Read more >>

Trans Pacific Partnership a threat to health, says assessment

A comprehensive review of the proposed Trans Pacific Partnership between Australia and 11 other nations including the United States and Japan has found it is likely to push up the price of medicines, stop some Australians from taking their medicines and make it harder to restrict the sale of tobacco and alcohol.

The so-called health impact statement, compiled by the Centre for Health Equity Training Research and Evaluation at the University of NSW relies on leaked texts of draft chapters of the agreement Australia is preparing to seal within weeks.

More than 20 chapters long, the text won’t be made public until after the the trade ministers shake hands at a meeting in Hawaii set down for next month.

The Trans Pacific Partnership encompasses almost 40 per cent of the world’s economy: the industrialised nations of Australia, Canada, Singapore, Brunei, New Zealand, Chile, Mexico, the United States and Japan alongside the less developed nations of Malaysia, Peru, and Vietnam.

Although its stated aim is to bring down trade barriers and allow mutual recognition of standards, many of its provisions deal with medicines and make it difficult for member countries to move against foreign owned corporations.

The health impact statement follows Commonwealth guidelines for such statement in place for more than a decade. Although such statements are not required for new projects in the same way as are environmental impact statements they are an accepted procedure for establishing the impact of new proposals on health.

Prepared by five health specialists from the universities of Sydney and NSW and La Trobe University the assessment took 15 months, beginning in late 2013 after some drafts texts of were published by Wikileaks...

The report says the US is seeking to prevent signatories from refusing to grant patents for minor variations to existing drugs even when there is no evidence of additional benefit. It says the provision would encourage “evergreening” where manufacturers gain extra patents to extend their monopolies in order to ward off competition from generics.

The US is also seeking to lengthen the period during which generic manufacturers cannot use clinical trial data produced by a manufacturer to obtain marketing approval. Under the Australia-U.S. Free Trade Agreement, Australia already provides at least 5 years of protection. The US is seeking at least 3 additional years of protection for new uses of existing drugs and 12 years for so called biologic drugs and vaccines.

The provisions in the draft healthcare transparency annex of the agreement would outlaw therapeutic reference pricing, a mechanism for ensuring that the prices paid for medicines reflects their clinical benefit and require more consultation with drug manufacturers about listing and pricing decisions.

“In the past, the Pharmaceutical Benefits Scheme has increased patient co-payments in order to accommodate rising costs,” the report says.

“A systematic review of evidence from 1990 to 2011 found that co-payments decrease prescription use, can impact patient medicine use compliance, and can adversely impact disadvantaged populations.”

The report finds that proposed investor-state dispute settlement procedures would make it difficult for governments to legislate in ways that harmed tobacco, alcohol or food manufacturers.

Trade minister Andrew Robb told Fairfax Media last month that many of the critics had only seen proposals, not what would be in the final agreement.

“I am not going to do something that I think is not in the public interest,” he said.

In The Age and Sydney Morning Herald


Related Posts

. Trans Pacific Partnership. What is being negotiated in our name?

. Trans pacific partnership. What's being built under our noses

. Patents. The rules that hurt the Australian drug industry

Read more >>