Gordon Campbell on the PM’s TPP concessions on medicines   28 Jul 2015

So, on the eve of the last round of talks meant to finalise the Trans Pacific Partnership trade deal, Prime Minister John Key has conceded that yes New Zealand will probably have to pay more for medicines under the TPP.

This is exactly what TPP critics have been warning for nearly four years, while being fobbed off as alarmists for doing so. Key’s belated concession contradicts assurances given only last October by Trade Minister Tim Groser:

Mr Groser said, despite the size of the prize, New Zealand's ability to source cheap drugs through Pharmac would not be negotiated away. "Trade negotiations start out sometimes with very extreme proposals, and then they meet resistance and then you refine them and I'm quite comfortable with the way things are going in this negotiation on this. There will be no fundamental change in Pharmac's operations as a result of the trade agreement."

Newsflash! That assurance was pure spin and bullshit. Thanks to the TPP and its illusory ‘free trade’ provisions - which will actually entrench and extend the patent rights of the market incumbents - Pharmac will face additional, costly barriers to the accessing of generics. Minor variations on existing drugs are also likely to qualify for fresh patent extensions, regardless of the (often) trifling therapeutic benefits they bestow.

That’s on top of the concessions Groser unilaterally made (just before the TPP meeting in Auckland in late 2012) about offering greater ‘transparency’ to Big Pharma when it comes to Pharmac’s internal decision making. In practice, this will open the door to costly legal challenges by pharmaceutical companies whenever Pharmac declines to purchase one of their expensive new products. ( ie if the drug companies are selling a new drug, Pharmac will have to buy it. Or give a good and legally justifiable reason, why not.)

There is a Treaty of Waitangi dimension to today’s concession by Key. Given the fact that health statistics already badly disadvantage Maori, it is hard to see how the Key government can unilaterally accept longer and wider-ranging drug patents, a higher drugs bill for Pharmac and higher costs across the counter for medicines – all without consulting in any meaningful way with its Treaty partner. The medicines-related concessions being contemplated under the TPP can only be of further detriment to the health of tangata whenua. At the very least, tangible evidence of genuine and compensatory gains should now be tabled, and before the government signs up to a deal that – on all the available evidence – will involve significant losses for this country, with few compensatory gains.

Having given up the ghost on the cost of medicines – and likewise, presumably, on the demands by US corporates to extend our term of copyright – the Key government is still claiming this deal will be good for New Zealand. To make that argument stick, Key will need to deliver real and immediate gains for New Zealand on access to Asian farm markets for our dairy products. So far, all the signs have been bad on that front. Japan is the only Asian market capable of offering major gains for New Zealand within the TPP.

Unfortunately for us, Japan’s main concern in the agriculture chapter of the TPP is the level of tariff free rice imports that it will have to concede to conclude the overall deal, in return for greater access to the US auto market. The US has said it wants an annual quota of 175,000 tons of imported rice, while Japan was talking at last offer, of only 50,000 tons. Even that figure will be a tough – but achievable - sell for Japanese PM Shinzo Abe as he confronts his ageing and embattled rice farmers, already beset by plunging world prices for rice. Reportedly, tariff free offers have already been made and accepted within the TPP on pork and beef. That leaves what New Zealand and Canada want – namely, flexibility and access on dairy – and alas, that does happen to be the very last cab in the queue on farm trade, as far as the Japanese are concerned.

As mentioned, the signs of flexibility by Japan on dairy access have not been good. Evidently, New Zealand’s negotiators have been demanding that the TPP talks need to deliver this country better access for our dairy products – and not only to benefit our dairy traders, but to justify the trade-offs we’re making on drug patents, copyright terms etc etc. Yet according to the Japanese Economics Minister, New Zealand and Canada should be fenced off from the final deal if they continue to cause trouble!

Economic and Fiscal Policy Minister Akira Amari did not name the countries he thinks could be excluded from a Trans-Pacific Partnership deal, but Canada and New Zealand are said to be lagging behind in their negotiations with other members. “If there are countries that are…not willing to reach an agreement at the Hawaii meeting, we can’t afford to let the TPP go adrift for their sake,” Amari told a press conference. “It is an option for those countries to join (the TPP) later,” Amari said.

Negotiation sources said Canada remains reluctant to open up its poultry and dairy markets to foreign competition under the free trade initiative that would cover around 40 percent of global gross domestic product, while New Zealand has called for further liberalization of dairy products.

So… that’s the next question for Key at this point. Are we going to get the access to Japan’s markets we’ve been seeking in dairy? And if we don’t – or if we get fobbed off with a token, concession spread out over 15 or 20 years – then where exactly within this shonky, secretive trade deal are the gains for what we’re giving away ?

Footnote : For years, Key has said that he can’t let the New Zealand public know anything about what’s at stake in the TPP deal because you know, that’s not how you do trade negotiations….But if that was true, and even before the final round of TPP talks begin, why is Key now publicly throwing in the towel on drug patents? Surely, shouldn’t we be fighting that particular corner to the bitter end, as hardened trade warriors do? In reality, we’re being softened up for the bad news, that’s why. That figures. With the TPP, the secrecy has always been about hiding the bad stuff from the public, until it is too late to affect the outcome.

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