Tremendous Pharmaceutical Profits or Totally Protected Plunder?

By  |  17 / April / 2013

What the TPP really means for Latin America

Quieter is better. That seems to be the motto driving the negotiations of the Trans-Pacific Partnership. The trade deal was initially called the P2, and it was a two-way affair between New Zealand and Singapore. Chile and Brunei joined the negotiations, which were renamed the P4. Then the US joined, and the deal was re-branded as the Trans-Pacific Strategic Economic Partnership Agreement (TPP). Today, negotiating countries are splayed across the globe like a constellation only a highly trained astronomer could recognize. In addition to the first five, the TPP now includes Australia, Malaysia, Peru, and Vietnam. Canada and Mexico recently joined the talks and Japan is vying to participate in the negotiations

The next round of negotiations will take place in Lima, Peru, and proponents are pushing for a final agreement by fall.

But the language of TPP promoters rings hollow for those who have tracked the progress of other trade agreements, like NAFTA. “They’re saying that it’s going to open up opportunities for exporting more Mexican goods to other countries, like to Asia… That Mexico will become more competitive in other markets,” said Manuel Pérez-Rocha, associate fellow at the Institute for Policy Studies, and member of the Mexican Action Network on Free Trade (RMALC). Pérez-Rocha pointed out there’s little concrete evidence that Mexican exports to Asia will increase as an outcome of the agreement. “Mexico has actually signed many Free Trade Agreements with other countries, and its dependency to the US market hasn’t changed a bit,” he told the Americas Program.

Since the US got on board, the TPP has taken shape as a second generation of geographically-distributed multilateral negotiations after the collapse of the World Trade Organization (WTO) talks and the Free Trade Area of the Americas proposal. According to the Office of the US Trade Representative, “This agreement will advance U.S. economic interests with some of the fastest-growing economies in the world; expand U.S. exports, which are critical to the creation and retention of jobs in the United States; and serve as a potential platform for economic integration across the Asia-Pacific region.” During the negotiations, concerns have been raised that the TPP will limit access to generic medications, impact Internet access, and affect local markets for textiles, shoes, milk, and grains in negotiating countries.

“[The TPP] is a way to isolate China, it’s a way to do an end run around the WTO and to kind of pursue the US agenda, which was not getting very far with countries that are willing to participate…  it’s just an expansion of the general free trade architecture that was being contested to some extent,” said Stuart Trew, trade campaigner with the Council of Canadians.

With the TPP, secrecy is the name of the game. So far, “there’s been no text released, the only text that’s come out is through leaks,” said Trew.

One of the key areas of concern is with the investment protection segment of the TPP, which was leaked in June 2012 to the US rights group Public Citizen. The TPP would bring in an augmented version of NAFTA’s controversial Chapter 11, an investment protection agreement by which companies can sue governments for imposing health and environmental legislation, among other things, applied across all countries involved. “The leaked text reveals a two-track legal system, with foreign firms empowered to skirt domestic courts and laws to directly sue TPP governments in foreign tribunals,” according to an analysis prepared by Public Citizen. “They can demand compensation for domestic financial, health, environmental, land use laws and other laws they claim undermine their new TPP privileges.”

The fact that the TPP is being negotiated between countries that have already signed various Free Trade Agreements (FTAs) and multilateral trade agreements has shifted the nature of the concerns among activists in negotiating countries away from strictly market based concerns and towards issues of Intellectual Property (IP) and investment protection. Intellectual Property (IP) represents another area where the US is pursuing an aggressive agenda in TPP negotiations.

“While the TPP has some similarities with the free trade agreement that Chile signed with the United States in 2004, but from what has come out through leaks of the negotiating text, the TPP has intellectual property standards that are much higher than [the US-Chile FTA], which in the Chilean case could imply changes to laws which protect innovation and internet users,” according to Francisco Javier Vera Hott, project director of Derechos Digitales, an internet rights group based in Santiago de Chile. “Chile has commercial agreements with all parties of the TPP, so this agreement doesn’t represent any economic or employment gains or [changes to] market access, instead it represents losses as we are required to implement stricter norms with regards to intellectual property, without any retribution.”

IP is similarly a major concern in Peru and in Canada. “In the case of the TPP in Peru, for example, it’s not just another agreement with countries with which we already have [Free Trade Agreements], the threats go beyond commercial exchange strictly speaking… They’re more in the area of deepening institutional reforms in sensitive sectors like intellectual property,” Alejandra Alayza, executive coordinator of the Peruvian Network for Globalization with Equity (redGE Perú), told the Americas Program from her office in Lima.

“The US proposal [regarding intellectual property] has been on the table for more than a year and a half, and regardless of the fact that the other countries have rejected the proposal, the US is insisting on raising the standards and they haven’t pulled their proposal, at the same time, they’re seeking to wrap up negotiations in the next few months,” said Alayza. “This shows a clear intention to press for new intellectual property regulations on behalf of the pharmaceutical sector, which would strengthen the transnational monopoly of the pharmaceutical companies, weakening access to medicines and competition of internal markets and generic drugs.”

Pharmaceutical drugs and the IP chapter in the TPP could also have an impact on the availability of generic drugs of other negotiating countries, including Canada, according to Trew, who says drug prices in Canada will likely rise if the TPP is passed. “Proposed by U.S. negotiators, the IP rules enhance patent and data protections for pharmaceutical companies, dismantle public health safeguards enshrined in international law, and obstruct price-lowering generic competition for medicines,” reads a statement released last month by Doctors Without Borders (MSF).

The stakes are a little different in Mexico, which has an economy that is much more dependent on the US than the other Latin American nations involved. If anything, the TPP will deepen Mexico’s dependence, according to IPS’s Pérez-Rocha.

Compared to Peru, for example, “Mexico is much more dependent on the United States, more dependent to NAFTA, in general Mexican producers are very concerned that the privileges Mexico has with the United States will be diluted, that Asian companies will be able to come and assemble in Mexico and export to the United States, affecting very strongly Mexican producers,” he said, noting that the Mexican textile and shoemaking sector have shown opposition to the pact.  “For example textiles, they could import from Vietnam, to name a country, and they wouldn’t pay tariffs on the imports, and then they could produce clothes to export to the United States from here in Mexico, so basically that’s one of the gravest concerns of the textile associations.”

In addition to the textile and shoemaking sectors, Pérez-Rocha pointed out that Mexico’s milk, coffee and basic grains sectors could all be negatively impacted through the passage of the TPP. Canada’s dairy sector could also take a hit if the TPP is passed.

“Really its just another race to the bottom, but no one wants to get left out, no one wants their economy to be somehow damaged if they’re not part of the negotiations,” said Trew.

Though Alayza said she isn’t expecting mass mobilizations in Peru during TPP negotiations there, events are being organized in Peru and elsewhere to coincide with the talks. The TPPxBorder group has started compiling a list of events being organized against the TPP, beginning with a day of action on May 11th.

Dawn Paley is a freelance journalist and independent researcher. See more of her work online at dawnpaley.ca.

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