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22 Jul 2014

Australia must reject provisions in the controversial Trans Pacific Partnership Agreement that could undermine the Pharmaceutical Benefits Scheme and compromise the ability of governments to improve public health, according to the AMA.

As secretive negotiations of the TPP drag out, the AMA has voiced fears the proposed trade deal is out of balance and advances commercial interests at the expense of patient health.

The AMA Federal Council has called on the Federal Government to reject “any provisions in trade agreements that could reduce Australia’s right to develop health policy and programs according to need”.

The Association said it was concerned that aspects of the proposed TPP could be used to attack key health policies and measures including the PBS and the cost of medicine, food labelling and tobacco control laws, restrictions on alcohol marketing, the operation of public hospitals and the regulation of environmental hazards.

The TPP has been the focus of increasing international concern because of ambitious and far-reaching clauses that are seen to serve the interests of major corporations, particularly in the US.

Among the most controversial provisions are investor-state dispute settlement (ISDS) procedures that would enable corporations to mount legal action against government policies and laws they felt harmed the value of their investment or future profits.

Tobacco giant Philip Morris Asia used just such provisions in a 1993 investment agreement between Australia and Hong Kong to challenge the tobacco plain packaging legislation in the courts and seek compensation, arguing that the policy undermined the value of its investment by ‘expropriating’ its trademarks and branding.

US negotiators are also pushing hard for the TPP to include some of world’s most stringent intellectual property protections that would expand and extend patent monopolies, helping hold drug prices high and delay the introduction of generic medicines onto the market.

In addition, the TPP includes proposals demanding the removal of technical barriers to trade – provisions which companies have used to challenge regulations such as alcohol warning labels, alcohol excise, and front-of-packet food labelling.

There are also concerns market access rules in the TPP may be used to restrict government support for public hospitals and other health services by requiring that there be competitive neutrality between such entities and private health providers.

A resolution adopted by the AMA Federal Council said international trade agreements had the potential to hamper governments in acting to protect and promote health.

“Free trade agreements which prioritise investor protections, including through invest-state dispute settlement, allow foreign investors to challenge existing and future Australian health policy measures on grounds that they may constitute ‘barriers to trade’,” the resolution said. “Trade and investment agreements should not adversely impact on public health or access to quality and affordable health care and medicines.”

The Federal Government has so far issued mixed signals regarding its stance on controversial aspects of the TPP.

The Howard, Rudd and Gillard governments all resisted pressure to include ISDS provisions in trade agreements, including the TPP, but the current Government is more equivocal – supporting its inclusion in the preferential trade agreement with Korea but blocking it in the trade deal signed with Japan early this month.

Trade Minister Andrew Robb indicated last November that the Government would oppose provisions that could be used to force consumers to pay more for medicine, but the Government has indicated it will accept an ISDS provision, subject to special exclusions for Australia.

Hopes to conclude the deal by the middle of this year were delivered a massive blow when US Congress did not renew President Barack Obama trade negotiation authority. It is now considered unlikely there will be a Congress vote on the TPP before the mid-term elections in November, effectively delaying progress on the deal until at least early 2015.

Anger and concern about the TPP has been fuelled by the secrecy surrounding negotiations.

TPP talks have been conducted behind closed doors, leaving observers to rely on leaks and ad hoc statements from negotiators for information, an environment that has stoked alarming speculation about the provisions it may contain in its final version.

In its resolution, the AMA Federal Council called for an end to such secrecy, urging the Federal Government to commit to “the utmost transparency in trade negotiations…and to consulting as fully as possible with the health sector, medical practitioners and with wider civil society organisations”.  

Lead economist at the Asian Development Bank’s Office for Regional Economic Integration Jayant Menon said the agreement was falling victim to concerns about the aggressiveness of several of its provisions, combined with the ambition of the TPP agenda and the diversity of the countries negotiation the agreement, which were all conspiring to delay its conclusion.

Dr Menon said the 12 countries negotiating the TPP, including the US, Japan, Australia, New Zealand, Vietnam, Peru, Malaysia, Canada and Mexico, had widely diverse economic characteristics and interests that made it very difficult to establish common ground – a challenge made even more difficult by the agreement’s “wide-ranging, highly ambitious agenda”.

He said this problem was exacerbated by perceptions among the negotiating countries that the agreement’s proposed agenda was heavily skewed in favour of US interests.

“Many see it as terribly skewed in favour of one country, the US,” Dr Menon said, warning that the deal might never be concluded.

“Several issues face such stiff opposition from some members that they may never be overcome. In this quagmire, the TPP could easily degenerate into a series of bilateral deals,” he said.

Adrian Rollins


Published: 22 Jul 2014