A short summary of some of Trans-Pacific Partnership news related to the Melbourne, Australia negotiations this week…
Intellectual Property Rights (IPR): Inside Trade reports (subscription) today that not only is Australia pushing back against U.S. demands on investment protection, but “the Australian government has made clear that it does not want to alter its Pharmaceutical Benefits Scheme (PBS), through which it establishes drug prices, and has at least signaled that it does not want to change existing Australian laws on patent protection.”
Similar to in the CETA negotiations, where EU-based drug firms are pushing strongly for drug regime changes in Canada, brand name pharmaceutical companies in the U.S. want 12 years of data exclusivity for biologic drugs, rather than the customary five years for conventional pharmaceuticals in Australia, which does not distinguish between these types of drugs.
There are also concerns in Australia that the TPP might force a full patent-linkage system that could delay the introduction of generics on the Australian market. Brand name firms could ask the Australian government to stop the marketing of a generic competitor under suspicions it was infringing the brand name’s intellectual property rights under the TPP.
Inside Trade also reports, “Peru has tabled proposals in TPP on traditional knowledge and genetic resources that would require pharmaceutical companies to obtain prior consent for use, and ultimately share benefits from the development of a commercial product based on traditional knowledge and genetic resources.” U.S. negotiators are pushing back against this as they have been in ongoing TRIPS discussions at the WTO.
New entrants (including Canada): The Detroit News reports that Obama is still undecided on whether or not Japan should be allowed to join the TPP discussions. U.S. Trade Representative Ron Kirk told the Senate Finance Committee that he wants to “make sure that any new partners understand the standards and objectives that we are attempting to achieve.” That would include Canada, which has a supporter in the American Automotive Policy Council, according to the article.
“A one-sided free trade agreement with Japan will drag down the United States’ leading sector of exports and will deeply undermine the business case for additional auto investments in the United States while undermining the competitive gains that are allowing new jobs to be created,” said the group, which is open to Mexico and Canada joining the TPP negotiations.
But Senate Finance Committee Chairman Max Baucus, a Democrat from Montana, has other ideas. He wants Kirk to use Mexican and Canadian requests for a seat at the TPP table as leverage to win disputes with both countries over lumber and beef.
“Canada’s interest also presents an opportunity to pressure Canada to make its lumber trade with the United States abide by “standards of fair trade” without subsidies and unfair prices,” reports Inside Trade on Baucus’ idea. “In addition, he said that USTR should make sure that any lumber disputes be handled by institutions other than bi-national panels.”
The Canada-U.S. softwood lumber dispute is that never-ending story that has never looked good on Canada or on the benefits of “free” trade with the U.S. Commenting on the recent extension of the Softwood Lumber Agreement, the Ontario Forest Industries Association and the Council of the Quebec Forest Industry said they are satisfied but:
It is worth noting that Canada’s softwood lumber industry paid a very significant initiation fee of $1 billion for the SLA that was, according to the Congressional Research Service, split with half going to the U.S. lumber companies and the rest used for joint North American lumber initiatives. This initiation fee was paid despite a legal ruling that would have seen all duty deposits returned to Canada. Since 2007, under this agreement, Québec and Ontario companies have paid more the $190 million in border taxes on their exports of softwood lumber to the United States. Central Canada, in light of its prior payment and sacrifice, now looks to whatever continuing benefits may be derived from the SLA according to the already agreed terms.
Anyway, I digress… Another Inside Trade article says Obama is in a hurry to wrap up as much of the TPP talks as possible this year before it or other countries will consider inviting Canada, Mexico or Japan to the table. These expectant entrants will be presented with a fait accompli and asked whether they agree or not (no re-opening of the text). Not much of a negotiation but then this is supposed to be “the only game in town in the entire world in terms of big agreements which can unlock trade long-term,” according to the U.S. Chamber of Commerce.
Inside Trade suggests we won’t see a final decision on Canada joining the negotiations until September 2012:
If TPP leaders do make an announcement in September on new countries joining, it could be convenient timing. This is because the Office of the U.S. Trade Representative, following the requirements of a lapsed fast-track law, is expected to formally notify Congress 90 days in advance of any new countries joining the talks.
Issuing such a 90-day notification in September could be convenient because, for the balance of 2012, little is expected to take place in the TPP talks anyway due to the U.S. election campaign. Under this scenario, therefore, the 90-day layover between announcement and the actual joining of new members would not keep any new TPP countries from missing even more of the ongoing talks, because the talks would have dramatically slowed down anyway.
Harper’s free trade caravan: Foreign Affairs Minister John Baird is in Burma this week — the first time for a Canadian minister — which the Globe and Mail suggests is partially linked to the Harper government’s goal of renewing economic and trade ties with Asia. The Prime Minister will travel to a nuclear summit in South Korea March 26 and 27, following which he’s expected to do a little trade promotion tour, the Globe reports:
After the summit he will travel to Thailand – a visit he cancelled last fall due to flooding in the country – to announce exploratory talks with that country on a free-trade agreement. That step, which typically includes a joint study by both nations, is the precursor to launching free-trade negotiations.
The Prime Minister is also considering a stop before the summit in Japan, in the hope the two countries will be ready to begin formal free-trade negotiations during his visit. Mr. Harper and Japan’s former prime minister, Naoto Kan, launched a joint study last year, and Canada is pushing for Mr. Kan’s successor, Yoshihiko Noda, to announce the start of negotiations this month.
Either free-trade deal would mark Canada’s first in Asia, despite years of fruitless talks with South Korea and Singapore. Mr. Harper has signalled that trade with the continent is a high priority and said Canada wants to join talks toward a Pacific Rim trade bloc under the Trans-Pacific Partnership.
