John Menadue. The Senate saves the day on the Trans Pacific Partnership.

Aug 13, 2015

The Senate saves the day on the Trans Pacific Partnership.

Often the Senate is seen as obstructive or worse. But it has performed a very useful purpose in helping to derail the Trans Pacific Partnership. Hopefully the TPP will not be put back on track.

According to the New York Times, our Trade Minister Andrew Robb told the TPP negotiating ministers in Hawaii that the Australian Parliament – read Senate – would not accept the further restrictions on trade in pharmaceuticals which the US was proposing. He was apparently concerned that to accede to the US demands would result in substantial increases in Australia’s Pharmaceutical Benefits Scheme and penalise Australian pharmaceutical users. As a result of this breakdown on pharmaceuticals, the Australian government ‘walked away from the negotiations’.

Perhaps I missed it, but I was surprised that I read this report from the New York Times and not from the Australian media. With a few exceptions, the Australian media has consistently failed to report and analyse the minor benefits that we will obtain from successive ‘Free Trade Agreements’ that Andrew Robb has finalised with Japan, China and the Republic of Korea. The so-called benefits have been grossly exaggerated but the Australian media has largely accepted the government’s version of events. And so we saw little serious examination in the Australian media of the TPP.

There are many reasons why the proposed TPP was not in our interest.

The first of course was the US proposal to increase protection from five to eight years for US pharmaceutical companies and their biologic products. It would have added to the high costs of pharmaceuticals in Australia as a result of Big Pharma’s influence on Australian governments in the Australian market.

Very frustrating was also the fact that it was only late in the day that we were able to have some understanding of what Big Pharma and other powerful US multinationals were attempting with the TPP. This secrecy made it difficult to access the real agenda of corporate America. But with the benefit of some hindsight it is clear now that the US corporate agenda was not to free up trade but to increase protection.

From the beginning TPP should have been suspect in terms of our national interests. The TPP was designed deliberately to exclude China. The US has been trying to build a trade bulwark against China, our main trading partner. Surely our objective and that of the US should not be to confront and contain China, but to accommodate wherever possible its involvement in the world economy and in world politics. Furthermore TPP did not include Indonesia which by 2050 is projected to be the world’s fourth largest economy. 70% of Australia’s merchandise trade passes through Indonesian waters every year. Indonesia is our most important strategic partner.

How could the TPP serve our interests by excluding both China and Indonesia that are so important for us? Only two years ago we released a White Paper ‘Australia and the Asian Century’. That White Paper which highlighted the importance of the Pacific region for our future, has been taken off the government website and was clearly ignored in the TPP negotiations.

Another major concern over TPP was the provision for settlement disputes between investors and countries whereby investors could sue governments in compliant pro-business fora for losses incurred when governments legislate in the public interest. Why this presents such a problem can be seen by what has happened in Hong Kong. Having lost its case in the High Court over plain packaging of tobacco, Phillip Morris is now suing Australia in Hong Kong because of an earlier trade agreement that Australia signed with Hong Kong. What an awful abuse of corporate power in defiance of our national interests.

There were also other problems. At the end it seems that the US was not prepared to provide reasonable access for dairy products and sugar. This was a re-run of the US attitude ten years ago in the negotiation of the US-Australia Free Trade Agreement. That agreement not only denied proper access for Australian sugar and dairy products it also turned out to be a real dud in helping to promote Australia-US trade. Shiro Armstrong of the ANU has reported that both Australia and the US are ‘worse off than they would have been without the agreement’.At the time John Howard told us what a wonderful outcome it was for Australia

In retrospect it is clear that almost everything was wrong about TPP – both its objectives and its processes.

The collapse of negotiations is a welcome outcome but our media hardly noticed. So often it is obsessed with adversarial politics and personalities and has little interest in policy. In the TPP negotiations we had major national issues at stake, but our mainstream media was asleep at the wheel – again.

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