Malaysia blocks US trade shocker. Will we? | | MacroBusiness

By Leith van Onselen

The AFR has reported today how the Malaysian Government is pushing back on the Trans-Pacific Partnership (TPP) – the proposed regional trade deal between 12 Pacific Rim countries – citing concerns that it could harm its national sovereignty:

“You cannot rush into things. This is a very big trade pact, going beyond the conventional areas of tariffs. It’s natural that it’s taken quite some time” [Mustapa Mohamed, Malaysia’s International Trade and Industry Minister, said in an interview]…

“We cannot be pushing the TPP at the expense of our national interest and national agenda,” Mr Mustapa said.

The Malaysian trade minister’s cautious views contrast nicely against Australian trade minister, Andrew Robb, who has signaled Australia’s unbridled support for the TPP provided Australia gains significant access to agricultural markets, even labeling the agreement as a “platform for 21st-century trade rules”.

As noted previously, if the TPP goes ahead, it will establish a US-style regional regulatory framework that meets the demands of major US export industries, including pharmaceutical and digital.

The draft chapter on intellectual property rights, revealed by WikiLeaks, included a “Christmas wishlist” for pharmaceutical companies, including the proposal to extend patent protection and strengthen monopolies on clinical data. As part of the deal, the US is reportedly seeking patents for “new forms” of known substances, as well as on new uses on old medicines – a proposal which would lead to “evergreening”, whereby patents can be renewed continuously.

It’s a huge risk to Australia’s world class public health system, which risks cost blowouts via reduced access to cheaper generic drugs and reduced rights for the government to regulate medicine prices. It also risks stifling innovation in the event that patent terms are extended too far.

The US is also seeking to insert an Investor-State Dispute Settlement (ISDS) clause into the agreement, which could give authority to major corporations to challenge laws made by governments in the national interest in international courts of arbitration. So effectively, US companies would be allowed to sue the Australian Government under international law – a move that is being pursued by Philip Morris against Australia on plain packaging and graphic warnings for cigarettes.

The draft agreement also sought to place more restrictions on internet users by forcing ISPs to cooperate with copyright holders and terminating the accounts of repeat infringers. This is despite the High Court of Australia ruling that an ISPs inaction could not be taken as authorisation of a copyright infringement.

Finally, the US is opposing a proposal that would allow the circumvention of technology that restricts products to certain regions, even though this was recommended by the Australian parliament’s Inquiry into IT Pricing, as well as opposing the parallel importation of goods made under authorisation in other countries, which would act to maintain higher prices (to the detriment of Australian consumers).

That the Coalition seems intent to cede Australia’s sovereignty in formulating national policy, as well as granting greater power to American pharmaceutical and digital interests, in exchange for increased agricultural access, is a huge worry. The rot began with the signing of the flawed Australia-US Free Trade Agreement by the Howard Government, which extended Australian copyright, and it appears that the Abbott Government wants to ‘finish the job’ by including ISDS processes, among other non-tariff measures.

While the Malaysians seem to understand the risks arising from the TPP, the Coalition is either oblivious or happy for Australia to become a US outpost.

It also highlights why, at a minimum, the text of the TPP (and other trade agreements) must be released for public and parliamentary scrutiny before they are signed by the Government. Otherwise, we risk being sold-out for short-term political gain rather than sound long-term decisions.