Charles Santiago

Posted: 02 Nov 2011 02:57 AM PDT

Source: Bangkok Post

Published: 2/11/2011 at 12:00 AM
Newspaper section: News

There is trouble on the horizon for all hopeful members and would-be joiners of the Trans-Pacific Partnership Agreement (TPP). The TPP is a US-led initiative, started by President Barack Obama at the end of 2009. Its rather lofty aim is to bring free trade to the entire Asia-Pacific region, in stages. A Pacific free-trade zone is the almost mythical goal of the Asia-Pacific Economic Cooperation group. The theory is that if the United States and eight other disparate countries can agree on free trade, then all the other nations will quickly join.

That is a good theory, but after two long years and nine high-level negotiating sessions, the TPP is far closer to falling apart than coming together. The basic reason is simple: free trade pacts depend upon excruciatingly detailed contracts, appendices, exceptions and side agreements. In the last two negotiating sessions, the US delegation has almost entirely reversed its liberal policies on intellectual property protection, specifically on medical drugs and pharmaceutical products. That is bad news for the TPP, terrible news for Thailand. This very likely will derail the TPP talks or even cause them to fail entirely.

Free trade agreements always are sold by their promoters as win-win propositions. This is misleading at best. There are many winners in free trade, and in general consumers and businesses gain. The public gets generally lower prices and companies get opportunities to expand trade abroad. Free-trade advocates are correct that opening up borders to commerce produces far more winners than losers. But that is a stark admission that free trade also produces losers. This is why negotiating FTAs must be meticulous.

President Obama launched the TPP talks as a repudiation of sorts against his predecessor. The Obama administration vowed that “We are back” in Asia, after what it claimed was years of neglect by the Bush government. But George W Bush had taken the US into a far more liberal stance on copyrights, trademarks and patents. Mr Obama is now rolling back the Bush-era stance on medical patents. Mr Bush basically acceded to demands from developing countries, led by Thailand, for access to affordable medicines. It was Mr Bush who backed down when challenged by the Ministry of Public Health over drugs for Aids and heart disease. He accepted that the right to affordable medicine trumped strict patent enforcement. The new policy under Mr Obama specifically returns the right of “big pharma” to retain and expand its patent rights. That means a monopoly on any “new” drug and on all marketing. US negotiators at the past two TPP sessions threw these proposals on the table nonchalantly, as if they meant nothing. Civil society groups leapt on the issue, putting the entire TPP proposal at risk.

Of course, pharmaceutical firms have the legal right to protect their massive investments in developing helpful new drugs. Under Mr Bush, the US did not completely back the drug firms, meaning they were subject to public pressure. Mr Obama has fundamentally reversed that. Any country trying to challenge drug firms will find themselves doing battle with US diplomacy and trade sanctions.

Opposition abroad and among NGOs is near-unanimous. Medicins Sans Frontieres calls the US policy reversal “a dangerous new standard” that will deny drugs to millions. Peter Maybarduk of Public Citizen says the Obama administration is forcing developing countries to trade away their access to medicines. This is a bad decision by the US and Mr Obama should drop that requirement immediately.