Businesses Crowd Corporate-Hosted Government Hearing on Trans-Atlantic "Trade" Deal

As the Obama Administration gets ready to negotiate a Trans-Atlantic "Free Trade" Agreement (TAFTA) with the European Union that takes aim at a host of health, financial, environmental and other regulations, a smorgasbord of corporate representatives (and a sprinkling of consumer groups) voiced their wishes for the pact this week. The occasion was a standing-room-only "stakeholder session," hosted by the administration's Office of Management and Budget and the European Commission, to get input on what TAFTA should or should not entail.  

What neutral territory did the administration choose to consider such a critical question?  Perhaps one of the many government-owned venues in downtown DC?  Nope.  They went with the headquarters of the Chamber of Commerce.  The Chamber's not exactly a disinterested party in a pact that could implicate a wide swath of U.S. regulation used to balance big business's quest for profits with the public's quest for financial stability, a healthy environment, safe products, and affordable medicines.  The venue choice is akin to the Environmental Protection Agency hosting a forum on offshore drilling...on an offshore drill.  

But at least the administration granted public interest groups like us some time to offer input.  As in, a half hour.  Total.  For all consumer groups.  In a 1.5-day-long forum otherwise filled almost exclusively by industry representatives.  If relative allotment of time is indicative of the relative importance the administration attributes to industry views on TAFTA vs. the views of everyone else, big business "stakeholders" hold 76% of the administration's attention, technical standards organizations hold 11%, and the opinions of the rest of us are worth 13%. 

During that half hour, I squashed Public Citizen's initial take on TAFTA, one of the largest "trade" deals proposed to date, into a five-minute statement.  For a nutshell view of what's at stake in TAFTA, here's the statement:

Expanded Analysis: U.S. Pharmaceutical Corporation Uses NAFTA Foreign Investor Privileges to Attack Canada’s Patent Policy

In December we reported that Eli Lilly, the fifth-largest U.S. pharmaceutical corporation, had announced its intent to use the extreme foreign investor privileges enshrined in NAFTA to directly challenge Canada's entire basis for granting patents.  Eli Lilly's audacious attempt, sparked by Canadian courts' invalidation of an Eli Lilly medicine patent, marks the first time a patent-holding pharmaceutical corporation has tried to use the extraordinary investor privileges provided by U.S. “free trade” agreements (FTAs) as a tool to push for greater monopoly patent protections, which increase the cost of medicines for consumers and governments. Because Canada has dared to enforce its own patent policy, Eli Lilly is demanding $100 million in compensation from Canadian taxpayers. 

We've just released an updated and expanded analysis of this worrisome NAFTA attack, available here.  In this expanded briefing paper, we uncover more bogus but dangerous legal claims that Eli Lilly asserts as backing for its attempt to take down Canada's entire legal basis for granting patents.  For example, the corporation accuses Canada of using a patent policy that "contravenes" the company's "expectations."  Eli Lilly claims that NAFTA guarantees the company the "right" to see its expectations fulfilled by the Canadian government.  To make such a cavalier claim, the company ignores the consistent opinions of multiple governments (including the U.S. government) that even NAFTA's sweeping investor protections guarantee no such "right," instead drawing on the inventive interpretations of FTA investor-state tribunals comprised of three private attorneys.  As the U.S. government stated in another NAFTA investor-state case, "if States were prohibited from regulating in any manner that frustrated expectations – or had to compensate for any diminution in profit – they would lose the power to regulate." 

Eli Lilly also invokes the national treatment privileges that NAFTA provides to investors (that governments should treat foreign and domestic investors alike), but instead of using NAFTA's already broad provisions, the company decides to invent a wholly new goverment obligation to foreign investors.  Eli Lilly complains that Canada's patent standards are different from those found in the U.S. and EU, and then asserts that Canada is obliged by NAFTA to enforce those foreign standards.  The notion of such a bizarre obligation is rather unprecedented even among the musings of creative investor-state tribunals.  In short, Eli Lilly is alleging that Canadian taxpayers should fork over $100 million because their government enforced its own patent laws rather than those of other countries.  

Not yet finished, the company alleges an additional national treatment violation by claiming that the Canadian courts' invalidation of its patent for an ADHD drug gives a prohibited advantage to Canadian generic firms that are now allowed to sell the drug.  Um, of course the removal of patents helps generic producers – it always does, but it does so regardless of whether the generic firms and/or the patent holders are foreign or domestic. Were Eli Lilly’s skewed logic to be accepted by the investor-state tribunal, any invalidation of a foreign investor’s patent, regardless of the basis, could be construed as a violation of FTA-protected investor privileges. 

Finally, Eli Lilly argues that Canada's invalidation of its patent monopoly in accordance with the country's established patent policy constitutes an "indirect expropriation" of the pharmaceutical giant's investment.  This avant garde legal claim, one rejected by most nations' courts, would require a government to compensate a corporation even for a nondiscriminatory regulatory policy that happens to diminish the value of the company's "property" (including, according to Eli Lilly, a patent monopoly).  In making this allegation, Eli Lilly skirts the fact that even NAFTA allows nations the flexibility to determine their own patent policy standards, and that such autonomously-defined standards cannot be the basis for claims of "expropriation."  

As far-fetched as Eli Lilly's allegations are, the anomalous investor-state system enshrined in NAFTA-style deals now empowers three attorneys sitting on a FTA-created tribunal (a body that has become notorious for imaginative and sympathetic approaches to investor claims), to determine the validity of Canada's patent policy.  Unfortunately, this radical system would be expanded by the Trans-Pacific Partnership (TPP), a NAFTA-style deal being negotiated between the U.S., Canada, and nine other countries.  The TPP's leaked investment chapter would extend the scope of NAFTA's investor privileges to explicitly cover "intellectual property," making it easier for pharmaceutical corporations to launch Eli-Lilly like attacks on sovereign governments' patent polcies. 

Will Eli Lilly prove successful in undermining Canada's patent laws to protect its patent monopoly in the ironic name of "free trade?"  The outcome of the corporation’s investor-state attack under NAFTA is critical for those seeking to safeguard countries’ ability to determine their own patent standards, a prerogative that is essential for preventing patent “evergreening” and ensuring access to affordable medicines. It is critical not just so that Canadian taxpayers can make sure that the demanded $100 million goes to more worthy ends than enhancing Eli Lilly’s profit margin, but to avoid emboldening other pharmaceutical firms contemplating the launch of similar investor-state demands against other governments that dare to set their own patent policies. As the Eli Lilly case gets underway, negotiations for the TPP and its proposed expansion of the investor-state system continue. Stopping the NAFTA expansion deal presents health advocates with today’s biggest opportunity to halt the advance of the system that empowered Eli Lilly’s audacious threat.

For more analysis of this threat, click here to see our newly expanded briefing paper.  

WSJ: Forget TPP's Threat to Medicines. "Free Trade is Good for Health!"

Today the Wall Street Journal published an op-ed with the glowing title, “Free Trade is Good for Health.”  The piece gussies up the Trans-Pacific Partnership (TPP) as a healthy dose of medicine for the developing countries that are negotiating the NAFTA-style deal with the U.S. and other Pacific Rim nations.  The op-ed first takes on those who argue that the TPP poses a danger to access to medicines (i.e. the major health and development organizations from nearly every TPP country).  It then frames the deal as part of a benevolent “free trade” legacy which should be given unqualified credit for the wealth health of nations.  The op-ed’s omissions in the first argument are as large as its sweeping conclusions in the second. 

The TPP’s proposed intellectual property chapter includes even greater monopoly protections for pharmaceutical companies than seen in past U.S. “free trade” agreements (FTAs).  The extension of such anti-competitive protections, while safeguarding profits for large pharmaceutical firms, threatens to block generics and elevate the cost of medicines in TPP countries like Vietnam. 

One such protection that has been hotly debated within the TPP context is “data exclusivity.”  The brainchild of the pharmaceutical industry, data exclusivity goes even beyond patent protections by barring generic drug manufacturers from accessing the clinical test data required to market cheaper, generic forms of a drug, whether patented or not, for years.   Should we be concerned about the implications of such corporate protections for the cost of medicines?  Apparently not.  According to the op-ed, such concerns are the handiwork of “scaremongering NGOs.”  (I don’t recall that adjective making it into our mission statement.)  The author, Philip Stevens, argues that data exclusivity for chemical drugs is currently granted in the U.S. for five years, and “the chances that the TPP will lengthen the exclusivity period are very low.”   

But the point is not whether the access-curtailing U.S. data exclusivity periods will be “lengthened,” but whether they will be exported to ten other TPP negotiating countries.  Also, the author neglects to mention the U.S.’s new and significantly longer monopoly protection period of 12 years for biologic drugs—used to treat cancer, heart disease, and other deathly illnesses.  Pharmaceutical companies and their cheerleaders have been calling for this extreme, prolonged generics prohibition to be spread to TPP members, diminishing access to life-saving treatments from Vietnam to Peru. 

Indeed, this corporate push was recently emblazoned on the very same opinion pages of the Wall Street Journal, with former U.S. Trade Representative Charlene Barshefsky calling for the U.S. to use the TPP to export its 12-year exclusion of generics for biologic drugs.  Our own Peter Maybarduk retorted with a letter to the editor, arguing, “It would be cruel to impose this rule on the many people suffering from treatable conditions in the Asia-Pacific region who cannot afford the extraordinary monopoly prices…”

While the TPP’s intellectual property chapter could export the U.S.’s monopoly protections for pharmaceutical corporations, the leaked investment chapter would allow those corporations to directly challenge governments for access-to-medicines policies that they allege as violating the monopoly protections.  The Wall Street Journal op-ed comes on the heels of Eli Lilly’s announcement, detailed in our post last week, that the pharmaceutical corporation plans to use NAFTA to directly challenge the Canadian government before a NAFTA-created, three-person tribunal over the Canadian courts’ decision to invalidate Eli Lilly’s patent.  The courts made the decision after determining that Eli Lilly’s drug had failed to deliver on promised utility.   In response, Eli Lilly is demanding $100 million in taxpayer compensation. 

As we mentioned, but as the op-ed failed to, the TPP goes even beyond NAFTA in empowering pharmaceutical corporations to launch such attacks on access-to-medicines policies.  NAFTA implies that a corporation could claim “intellectual property” as an “investment” protected by the deal, allowing it to demand compensation for government policies alleged to be a violation of that “investment.”  But the TPP makes that possibility explicit by naming “intellectual property rights” under the definition of “investment,” raising the prospect of an increase in Eli-Lilly-like challenges to access-to-medicines policies under the TPP.   

After wiping aside or completely omitting these concerns that the TPP poses a sincere health hazard, the op-ed author framed the TPP as the continuation of a “free trade” legacy that has played a nearly unparalleled role in improving global health standards.  (That’s not my near-hyperbole, but his: “there have been few more powerful forces for improving health in the history of humanity.”)  He reasons that trade means growth in income, which means growth in living standards:

Prior to the 1950s, the majority of the world's population lived a precarious life as subsistence farmers. Since then, the opening of global markets, first by the General Agreement on Tariffs and Trade and then by the WTO, has transformed the health prospects of millions by raising incomes. That, and not IP flexibility, made decent food, sanitation, and new medical technologies available.

That's how the Asian countries involved in the TPP—Malaysia, Singapore, Brunei and Vietnam—have witnessed startling improvements in the health prospects of their citizens since the middle of the last century. Singapore signed GATT in 1973, and by 1993 there were no import duties for any product except alcohol, tobacco and automobiles, a situation that largely persists today. Singapore now surpasses many European countries for life expectancy, with Malaysia not far behind.

Oh my.  Where to begin?  How about Singapore.  The author’s poster child for the trade-equals-growth-equals-health argument turns out to be a pretty counterproductive candidate.  Stevens, the author, cites 1973 as the year Singapore began opening the door to unfettered trade, with the door cast mostly wide open by 1993.  But the years of highest growth for Singapore happened while the door was still closed.  In the decade before 1973, Singapore’s average inflation-adjusted GDP growth rate per person was 9%.  In the decade following its GATT accession, that average growth rate fell to 6%.  In the decade following the declared 1993 free trade finish line, Singapore’s annual per capita growth dropped further to just 3%.  One could be pardoned for expecting Stevens to conclude from his Singapore example that nations looking to boost incomes and health standards should reject across-the-board free trade, not embrace it. 

Singapore’s experience is not unique.  A study by Mark Weisbrot and Rebecca Ray over at the Center for Economic and Policy Research found that from 1960-1980, a period characterized more by import-substitution than by free trade, Latin America as a whole experienced a cumulative growth rate of 92%.  But during the free trade era of 1980-2000, the region’s cumulative growth plummeted to a measly 6% over the entire twenty-year period. 

Such findings, like the Singapore data, do not necessarily mean that free trade causes lower growth.  Other factors could of course be at play in this history.  But the facts show that the opposite certainly cannot be claimed.  Free trade cannot be categorically credited for higher growth, much less recommended as an unmitigated prescription for better health.  Op-eds making such a sweeping claim would seem to be driven more by ideology than by evidence.  Those struggling to pay for medicine in Vietnam could probably do without more ideology.  

Concerns about TPP's IP Chapter Grow Among Civil Liberties and Human Rights Groups

As the 14^th round of TPP negotiations begins in Leesburg, apprehension about how the intellectual property (IP) chapter could affect free speech, global health and human rights continues to grow among prominent watchdog groups.

Last week, the American Civil Liberties Union (ACLU) described the TPP as "the latest threat to free speech in guise of IP reform” and criticized the negotiations for lack of congressional oversight.

Amnesty International chimed in on Thursday urging the TPP to “put people ahead of profits” and uphold basic principles of transparency and human rights.  Amnesty particularly stated concern that TPP would raise the cost of essential medicines by "stifling" generics.  For more information on how the IP chapter stands poised to jack up medicine costs, check out Public Citizen's Access to Medicines page.

Can you say "Déjà vu" in Spanish?

Dear Neighbor:

Congratulations on your inclusion in the elite group of states that are currently negotiating the Trans-Pacific Partnership (TPP) Agreement! Your acceptance into this proposed “historic, 21^st century trade agreement” means that much of the “burden” of making laws and regulations for your nation will be taken off of you. No worries; lobbyists for Hollywood and American pharmaceutical companies and more than 600 official “corporate trade advisers” to the Office of United States Trade Representative (USTR) will help take care of the details.

Sorry to mention it, but we’re afraid many of your laws pertaining to intellectual property (IP), affecting issues from Internet privacy to access to affordable medications, might need a little “tweaking” to ensure they comply with the specifications of U.S. corporate “advisers.” The USTR’s demands at the TPP negotiations read like a wish list from the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Recording Industry Association of America (RIAA), and YOU have the opportunity to grant all their wishes.

You see, the condition the U.S. imposed for Mexico to get a seat at this corporate banquet was that Mexico agree to accept everything that the other countries already have negotiated over the past three years. Sure, NAFTA required some nasty changes to your IP laws. Remember the millions your government wasted trying to lift the U.S. patent on common yellow beans that a bio-prospector filed after NAFTA? Well, wait until you get a look at the 21^st century NAFTA on steroids!

As a part of the “historic” TPP negotiations, it is time for your laws to truly reflect your new “21^st century” status. For instance, you need to expand pharmaceutical patent protection and create new pharmaceutical monopolies in Mexico. You also need to extend copyright protection to device memory buffers and criminalize circumvention of technological protection measures, limiting fair and educational uses of all kinds of literary and artistic content. Overall, you are expected to introduce new, draconian provisions into Mexican law to lengthen, strengthen and broaden IP monopolies in Mexico.

The strict IP enforcement in this scenario may seem very familiar to you. In fact, you fought off a very similar – although less extreme – attack on your privacy and rights on the Internet in 2011 in the form of the Anti-Counterfeiting Trade Agreement (ACTA). Some objections to ACTA expressed by Mexico Senator Carlos Sotelo Garcia in September 2010 included the opaque nature of the ACTA negotiations, stringent IP enforcement measures (championed by the U.S.), and the “erosion” of access to information technology for approximately thirty million Mexican citizens.

A look at any current media coverage of the TPP will reveal a scene that is eerily familiar and equally concerning. Sorry to break the news, but the opacity of the TPP negotiations makes the ACTA process look like a pinnacle of open government. The TPP has been negotiated entirely in secret, with the only glimpse of the text coming from leaks of the IP, investment and other chapters. Furthermore, each of the negotiating nations has agreed to keep all documents besides the finalized text a secret for four years following the conclusion of negotiations, whether it is ever finalized or not. So whereas the same report by Senator Garcia implemented a working group to review the provisions of ACTA, no such legislative oversight would be possible in the TPP. Apparently the only way to get a look at the “21^st century agreement” – even for legislators of the countries in the negotiations – is to introduce a resolution demanding they be allowed to see how trade negotiators are rewriting a nation’s laws. In the U.S, the chairman of the Senate committee with official jurisdiction over TPP, U.S. Sen. Ron Wyden (D-Ore.), has done just that. Yup, the chairman of the Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness and his staff were explicitly refused access to even the U.S. negotiators’ proposal to the TPP negotiations.

The legislature of Mexico has already expressed its opinion of trade agreements that restrict privacy and rights on the Internet. On June 21, 2011, the Mexican Congress passed a resolution that urged that the Federal Executive not become a signatory of ACTA:

The Standing Committee of the H. Congress, respectfully urges the Federal Executive Power to, within the framework of its powers, instruct the ministries and agencies involved in negotiating the Anti-Counterfeiting Trade Agreement (ACTA), not to sign the Treaty.

Reading this sort of language coming from the national legislature of a sovereign nation, one might draw the conclusion that ACTA is doomed in that country. But foreign corporate interests have found another foothold in the laws of Mexico – in the form of the TPP. You may have believed that ACTA was dead in Mexico, but, like el chupacabras, it is rising again and this time it is even stronger.

Welcome to the 21^st century, dear neighbor.

 

Follow Public Citizen's Global Access to Medicines on Twitter: https://twitter.com/#!/PCMedsAccess
Read more at our webpage: http://citizen.org/Page.aspx?pid=4955

Just Relax, Canada. U.S. Pharma Will Handle It

Dear Fellow Canadians:

Welcome to the Trans-Pacific Partnership (TPP) negotiations! Since you are fresh off a bruising fight getting provisions that protect Internet freedom and privacy into Canada’s copyright Bill C-11, I’m sure that you are exhausted with defending your rights. Take heart. With the TPP, you will not have much of a say on laws or policies threatening your privacy, rights on the Internet or access to affordable medicines. Instead, lobbyists from major American industries and some 600 “corporate trade advisers” have helped lay out some of what the Office of the United States Trade Representative (USTR) expects from you.

These are the same industries that forced major concessions on C-11’s approach to digital locks despite near-universal criticism. Hundreds of pages of new non-trade policy contained in the most sweeping “free trade agreement” could face a mere up or down vote in the House of Commons. And the USTR proposes intellectual property provisions that cover dramatically more than copyright law. They touch a wide range of IP issues.

You thought NAFTA was a pill? Sure, Big PhRMA used NAFTA to attack our drug formulary system and all of those compulsory licenses for affordable meds. But back then, our government drew a line. Despite some considerable hysteria from the U.S. drug industry giants, you did not give away all of our policy space. This time, however, the TPP gives Prime Minister Stephen Harper a way to write all of us a real prescription for high drug prices and cement his view of Canada as an extended playground for corporate America.

Here are some of the highlights of the U.S. proposed IP chapter:

• Expand patent evergreening and create new pharmaceutical monopolies, raising medicine costs;

• Dramatically increase the life of a copyright term from 50 years in most cases under C-11 to 95 years;

• Increase penalties for circumvention and reduce the exceptions for individuals; and

• Establish an American-style notice-and-take down system for online copyright infringement.

This seems like a lot. If you were worried, however, that we had some duty to at least read the proposals for the law and voice our democratic concern, fear not. Negotiators act in secret. The only glimpse of the actual agreement so far has come from leaked copies of the text from the IP, Investment and other chapters. Remember in the good old days of ACTA when the University of Ottawa filed an access-to-information request but received a blacked out document with only the title visible? Expect similar treatment during TPP negotiations. While lobbyists and corporate liaisons are granted electronic access to the agreement, your parliamentary representative might have to walk down to the Department of Foreign Affairs and International Trade to speak personally with The Honourable Ed Fast P.C. , M.P., Minister of International Trade.

Moreover, if you are distressed by the fact that our respectable Department of Trade will have lots of work reviewing all the work done so far once Canada’s negotiators get hold of these secret drafts, you will be relieved to hear that Canada has a lesser role in the negotiations. By coming late to the table, Canada has achieved a second-tier position. This status requires Canada to agree to all the settled chapters, which its officials have not even read, and Canada cannot veto current provisions. Thus, not even lobbyists or the trade minister need concern themselves with settled provisions. The TPP negotiations shut individual citizens and even members of parliament and ministers out of the process.

The public response to C-11 proved that civil engagement has made a difference on intellectual property issues in Canada. The people—frustrated, fearful and bedraggled—woke up to the oppressive measures of industry groups and fought hard. But this is far from the end. In upcoming years, we might still witness the implementation of a multinational corporations’ wish list, which seeks to criminalize copyright infringement, implement ACTA-plus provisions and restrict Canadians’ access to affordable medicines. Through the TPP, the USTR seeks to achieve all these goals and more—without too much of a voice from us. Will we allow American industry to dictate to the Canadian people our rights—or stand up and demand that Canada step down from these negotiations?

Follow Public Citizen's Global Access to Medicines Program: https://twitter.com/#!/PCMedsAccess

James Cormie is a legal intern at Global Access to Medicines Program.  Originally from Edmonton, Alberta, James blogs on issues of trade, IP, and international law.

TPP could undermine Medicare, Medicaid and Veterans’ Health - hurting seniors, military families and the poor

You've read about how the leaked chapter of the Trans-Pacific Partnership (TPP) that surfaced yesterday will outsource our judicial system and allow corporations to attack our laws.

But did you know that an earlier leaked text shows that the TPP could also undermine Medicare, Medicaid and Veterans' Health? This could hurt access to affordable medicines for our seniors, military families, and poor.

Indeed, it has been an open secret among trade negotiators that U.S. pharmaceutical companies have pushed to limit drug price containment measures, such as through the recent bilateral trade deals with Korea and Australia.

But, in our new public interest analysis, Public Citizen shows that Medicaid, Medicare, the Department of Defense’s TRICARE program for active military personnel, and the Veterans Health Administration and the 340B program are all threatened by the TPP.

We also show how proposed changes to Medicare championed by President Obama would clearly risk violating the TPP. Throughout, we show how trade tribunals are less likely to defer to national healthcare regulators than do national judges, including conservatives like Justices Scalia and Thomas. We conclude with suggested changes to the TPP to insulate smart drug price containment strategies.

Read the full memo here.

TPP Chiefs Raise Doubts about USTR’s Corporate IP Wish List

At the May 13th stakeholder briefing of the Trans-Pacific Partnership (TPP) trade talks outside Dallas, at least six countries' Chief Negotiators began to openly distance themselves from the Office of the United States Trade Representative (USTR), particularly from USTR’s radical intellectual property (IP) proposals, which would expand the scope and duration of pharmaceutical monopolies and challenge internet freedom.

In the past, these stakeholder briefings have felt like exercises in the art of saying little. USTR has sought to keep all nine countries on a common, limited message. But perhaps USTR can only push other countries and the public so far.

Early in the session, I asked the Chiefs:

The past year has witnessed the rise of an internet freedom social movement, with more than 3 million people petitioning the US Congress to block SOPA [the Stop Online Piracy Act] and tens of thousands protesting in the streets across Europe to shut down ACTA [the Anti-Counterfeiting Trade Agreement]. I think in Poland, these may have been the largest demonstrations since the Solidarity movement. Even Germany’s ministry of economic development is recommending against developing countries signing ACTA. Given that you are not releasing the TPP text, how will you assure people that the TPP will not pose similar problems?

Chile kicked things off, answering:

We are nine countries with many different positions—we are not all the same.

This may sound tame, but for those listening to the evolution of TPP sound bites, it was a surprisingly public distancing from USTR and its copyright and enforcement demands. And it set the pace for the day.

More Tumult at the TPP: Secret Negotiations Against Internet Freedom Continue this Week in Chile; Big Pharma Allies Attempt to Shut Down Critics’ Event (Again)

Talks on the Trans-Pacific Partnership Agreement (TPP), which the U.S. is negotiating with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, are continuing this week (April 9-13) in Santiago, Chile in the form of an “intersessional meeting” on intellectual property (IP) – focusing on internet policy. The last time such a meeting was convened on IP in January in Hollywood, a stakeholder event organized by public interest groups in the same hotel as the negotiations was cancelled after the hotel received pressure from the Office of the United States Trade Representative (USTR). Simultaneously, USTR made sure the Motion Picture Association of America (MPAA) had access to negotiators, as they were given an exclusive tour of 20th Century Fox Studios guided by a representative of the studio’s government relations office.

USTR is clamping down on public participation to minimize the spread of information which challenges their hardline IP maximalist agenda. In addition to increasing reliance on intersessionals, like this week’s Santiago meeting, where stakeholders are not given a forum to participate, USTR has now effectively reduced stakeholder participation in the official negotiating rounds by eliminating their opportunity to give presentations to negotiators in an official forum. USTR’s response signals the substantial impact critics of the TPP are having. At the March negotiating round in Melbourne, one stakeholder presentation after another criticized USTR’s aggressive pro-Big Pharma patent proposal, filling most of the afternoon. Now TPP countries are resisting USTR demands that would imperil their access to medicines.

Cozy relationships with government aren’t the only way corporations are influencing these talks. This week, American University and the University of Chile arranged to host an event to present analyses critical of particular proposals in the TPP. These include leaked provisions that would greatly favor Big Pharma, expand drug monopolies and raise medicine prices. The keynote speaker was to be Senator Ricardo Lagos, a major political figure in Chile considered to be a possible candidate for the Presidency. Nevertheless, the public University of Chile law school canceled the event on less than two days’ notice, evidently on the advice of a member of the faculty who is a paid advisor of the multinational pharmaceutical companies’ association in Chile (the Cámara de Industria Farmacéutica, or CIF).

The cancellation sent organizers scrambling for a new venue, which they found in Chile’s Catholic University.

Stakeholders from a spectrum of communities concerned with the implications of the TPP are continuing to shine light on the negotiations. Criticism of the TPP process is mounting from members of both state and federal government in the United States. Internet activists in Chile are calling on their government to defend the rights of their citizens from what could be the next SOPA, while analyses from academic experts on IP show that the U.S.-proposed TPP provisions go beyond those seen in ACTA. Meanwhile, USTR claims that allowing 600 corporate advisors to examine the negotiating text, including representatives of the Recording Industry Association of America (RIAA) and the Entertainment Software Association (ESA), while keeping it hidden from the general public justifies their claim of “unprecedented” transparency in the negotiations.

SOPA proved that the netroots can beat IP maximalism and rulemakings from Washington designed to curb internet freedom, while the populist response to ACTA has shown that policy laundering attempts by industry and their allies in government will face serious resistance. Ambitious, secret economic agreements have been defeated before through public awareness and organizing. Now it’s time to stand up and tell our governments we will not stand idly by while our rights are under siege.

Senator Wyden files amendment for more transparency in the TPP negotiations

A couple of weeks ago we reported about Senator Wyden's lively exchange with U.S. Trade Representative Ron Kirk regarding transparency in the Trans-Pacific Partnership Free Trade Agreement (TPP).

Senator Wyden has now increased pressure on USTR by filing a legislative amendment for more transparency in the TPP negotiations related to intellectual property and the internet. Our colleagues at KEI posted a short blog about the amendment.

November Deadline for Obama’s First Trade Deal Falls Away as Controversies Roil Chicago Trans-Pacific Trade Talks

American Medical Assoc. Enters Fray Over Inclusion of Tobacco, Alcohol in Deal; Obama Administration Proposal Limiting Access to Medicines Stirs Fury

CHICAGO – A range of controversies, mostly on health issues, has emerged at negotiations of the Trans-Pacific Free Trade Agreement (FTA) in Chicago this week, such that the vaunted deadline to complete the deal – the November Asia-Pacific Economic Cooperation (APEC) summit in Hawaii – will not be met. And after this eighth round of negotiations, troubling signs are emerging that the Obama administration’s first trade deal could roll back initial reforms made on affordable access to medicines made during the last round of George W. Bush-era trade deals, Public Citizen said today.

“While the administration keeps touting this potential first Obama trade pact as a new 21st century model, and instead of implementing the many specific trade reforms President Obama pledged as a candidate to avoid more job loss and ensure import safety, it appears the administration is pushing for something like NAFTA on steroids with Vietnam and Malaysia,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Growing controversy over the trade deal’s threats to domestic regulation of cigarettes and alcohol escalated when the American Medical Association (AMA) made its first foray into the trade debate, sending a letter on Sept. 8 to U.S. negotiators demanding that tobacco and alcohol be excluded from the pact. The AMA and other public health groups intensified their focus on trade talks after the World Trade Organization (WTO) ruled recently that the U.S. ban on clove, cola and candy-flavored cigarettes in the 2009 legislation to combat youth smoking violated WTO requirements, and ordered the policy changed. This followed an attack by tobacco giant Philip Morris Asia against Australia’s proposed cigarette “plain packaging” rules using an international commercial agreement that follows on a similar assault by a Swiss Philip Morris unit on a similar Uruguayan law initiated last year. Both attacks use the “investor-state” private enforcement system the Obama administration is pushing for in the Trans-Pacific pact.

Meanwhile, various countries and U.S. health, consumer and development groups reacted with ire as the Obama administration sought to distract attention from a proposal it was submitting earlier this week to roll back Bush-era 2007 improvements for affordable medicines access by expanding trade pact patent rules. While the U.S. proposal was being submitted behind closed doors, a paper was released publicly announcing a U.S. “Trade Enhancing Access to Medicines (TEAM) initiative” that was advertised as revealing a new policy to increase access to medicines for consumers. In fact, this initiative simply repackaged many of the most problematic aspects of the long-standing, retrograde U.S. position on trade patent rules that restrict medicinal access.

“It is insulting that the Obama administration released this paper on ‘access to medicines’ on the same day that it put forth its most controversial and access-restricting provisions at the Trans-Pacific FTA negotiations,” said Peter Maybarduk, director of Public Citizen’s Global Access to Medicines Program. “The U.S. intellectual property proposal rolls back even some of the few protections for access to medicines in the Bush-negotiated trade pacts. The administration is heading rapidly in the wrong direction, at the expense of global public health.”

The Obama administration’s attempts to roll back the “May 2007” reforms of trade pact patent rules relating to medicine access, its insistence over objections by Australia and other countries that private corporate “investor-state” enforcement be included, and its rejection of exclusions for any product from the deal is likely to add more dead weight to its efforts to pass pending Bush-negotiated trade deals with South Korea, Colombia and Panama. These deals were signed in 2007. After months of insisting votes would happen “within weeks,” it is increasingly likely that Congress could consider the deals in October. These three trade deals contain the same foreign investor rights and private enforcement used by Philip Morris to attack tobacco regulation in other countries.

“Obama folks always say that there just was not much they could do to fix the Bush-negotiated Korea, Colombia and Panama deals, but that when the new administration negotiated its own trade pacts, it would do them differently,” Wallach said. “Well, now they’re negotiating their own trade deal, and it’s looking like a Bush NAFTA-style deal in key respects – and even worse in some areas – and that only builds even more opposition to Obama’s call to pass Bush’s  old deals.”

Trans-Pacific FTA negotiations currently include Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam. The next round of Trans-Pacific FTA negotiations will be held next month in Lima, Peru. No high-level negotiations will take place at the APEC summit in Hawaii in November.

Bombshell Australian Report Finds FTAs "Oversold"

Yesterday, the Australian Government's Productivity Commission released a 400-page report examining the effects of Australia's "Free Trade" Agreements (FTAs). The Productivity Commission is the Australian Government’s independent research and advisory body on economic and social issues. The Age reports:

The Productivity Commission has told the government there is little evidence to suggest Australia's six free-trade agreements have produced ''substantial commercial benefits''....

Copyright provisions inserted in the US-Australia Free Trade Agreement could eventually cost Australia as much as $88 million per year....

The report also rails against investor-state lawsuit provisions like NAFTA's Chapter 11 that allow foreign corporations to sue sovereign governments for taxpayer compensation when governments take necessary action to protect the health and safety of their citizens: "There does not appear to be an underlying economic problem that necessitates the inclusion of ISDS [Investor-State Dispute Settlement] provisions within agreements.....Experience in other countries demonstrates that there are considerable policy and financial risks arising from ISDS provisions." The report goes on to note that millions of dollars of taxpayer funds has been paid out to multinational corporations due to corporate lawsuits filed under NAFTA's investor-state dispute settlement provisions. 

The report recommends that the Australian government "seek to avoid the inclusion of investor-state dispute settlement provisions in [FTAs] that grant foreign investors in Australia substantive or procedural rights greater than those enjoyed by Australian investors."  Australia excluded investor-state lawsuit provisions from the U.S.-Australia FTA due to justified fears that foreign corporations would demand compensation if environmental or public interest laws reduced their "expected profits."  The Australian trade negotiators would be wise to heed the well-reasoned recommendations of the Productivity Commission and ensure that investor-state lawsuit provisions are excluded from the proposed Trans-Pacific Partnership.
 
The report notes that the totality of evidence on FTAs "suggest that the economic value of Australia’s [FTAs] has been oversold." That sounds familiar. Oh, that's right, Public Citizen found that the same was true for U.S. FTAs in our September report, "Lies, Damn Lies, and Export Statistics: How Corporate Lobbyists Distort the Record of Flawed Trade Deals," in which we revealed that U.S. exports to FTA partners have grown at half the pace of U.S. exports to the rest of the world. There seems to be a consensus developing here.

University of California Study Finds that CAFTA Intellectual Property Rules Hinder Access to Medicines in Guatemala

A new study from the University of California concludes after rigorous analysis that the Central American Free Trade Agreement (CAFTA) elevates the prices of medicines in Guatemala while removing cheaper, generic options from the market. 

Guatemala is a low-income country with a domestic generic drug industry.  CAFTA’s intellectual property rules affect the drug market not as much through patent protections, but through data protection (or data exclusivity), which inserts an administrative barrier to generic drugs entering the market even if there is no patent in place, providing one company with a monopoly. Not only are generics denied registration and entry into the market by CAFTA’s market protections but generics already in the market are removed. 

The study looked at drugs used to treat some of the most common causes for sickness and mortality in Guatemala, including cancer, pneumonia, diabetes, and cardiac disease and stroke. The intellectual property rules in CAFTA have had a significant effect on medication costs in Guatemala, making many of them prohibitively expensive. In every case included in the study, the data-protected drug was more expensive than its generic equivalent. For example, the insulin Lantus, used to treat diabetes, costs 846 percent more than its generic equivalent. The antifungal Vfend, used to treat infections, costs 810 percent more than the generic medication. 

In fact, CAFTA’s rules on intellectual property provide even stronger monopoly protections than U.S. law or the WTO’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS).  Unfortunately, Guatemala is a prime example of the effects of CAFTA’s intellectual property rules and the Guatemalan people are paying the price, literally and figuratively. 

For more information, see GTW’s information on CAFTA and access to medicines.

The University of California article, entitled “A Trade Agreement’s Impact on Access to Generic Drugs,” can be found here. 

Botox protectionism

Defenders of the trade status quo sometimes like to point out that the economic argument in favor of free trade is identical whether you're talking about trade between countries, individuals or state lines. And that's true, so long as you believe the models and are willing to dismiss the notion of a national interest. Some interest gets protected at the expense of another: there may be a surplus created, but who can say where this goes without looking at specific distributions?

In the latest news off of Roll Call, it's Botox that's getting protected:

Those wrinkle-busting Botox injections can cost $500 a squirt, but if you were waiting for the price to come down when a generic version hits the market, well, get used to your frown lines.

That’s if a bill introduced late last week by Reps. Anna Eshoo (D-Calif.) and Joe Barton (R-Texas) makes it into law.

The measure, which would create a pathway for generic versions of biotech drugs, exempts pharmaceuticals that contain “select agents and toxins,” such as Botox’s botulinum toxin type A, mainly on the the grounds of national security, according to people on both sides of the issue...

A lobbyist for the generics industry said the national security argument doesn’t hold up. “They spin it as a national security issue — that botulism could be used in terrorist plots,” said this lobbyist. “I don’t know how in the hell they justify how generic botox is any more of a terrorist threat than brand-name Botox.”

The fact that this is a protectionist measure that is not free trade that benefits Botox producers at the expense of other segments of society is not discussed in the article. Barton, who voted against fair trade on 19 out of 20 votes, says on his website that "I firmly believe that free and open trade benefits all people." Eshoo claims to have a good trade record because she supports labor standards and trade adjustment assistance, but she was only marginally better and voted against fair trade on 15 out of 19 occasions, including through her votes for NAFTA, WTO, and the Peru FTA. Isn't this discrepancy worth a mention?

On the other hand, as our own Health Research Group at Public Citizen has pointed out, to the extent that Botox is dangerous, maybe it's a good thing that it's made out of reach for more people!

Nobelists on trade, globalization

Leonid Hurwicz, Roger Myerson, and Eric Maskin were awarded the Nobel in Economics yesterday for their work in mechanism design theory. Alex Tabarrok at Marginal Revolution has a pretty good explanation of this work, and Maskin told the Times:

Mechanism design, Professor Maskin explained, can be thought of as the “reverse engineering part of economics.” The starting point, he said, is an outcome that is being sought, like a cleaner environment, a more equitable distribution of income or more technical innovation. Then, he added, one works to design a system that aligns private incentives with public goals.

One recent subject of Professor Maskin’s wide-ranging research has been on the value of software patents. He determined that software was a market where innovations tended to be sequential, in that they were built closely on the work of predecessors, and innovators could take many different paths to the same goal. In such markets, he said, patents might serve as a wall that inhibited innovation rather than stimulating progress.

What Maskin is writing about is the textbook theory of the value of free trade. It also complements work in the development economics literature about how "late developers" can adopt the technological advancements of rich countries, thus "leapfrogging" a stage of development. It should be noted that this is something that our current WTO- and NAFTA-enforced intellectual property protectionism regime sharply limits.

Maskin has also written recently on inequality and globalization:

Supporters of the anti-globalization movement argue that “globalization has dramatically increased inequality between and within nations” (Mazur, 2000), and in particular that it has marginalized the poor in developing countries and left behind the poorest countries. Meanwhile, more moderate mainstream politicians argue that the poor must invest in education to take advantage of globalization (Clinton, 2000). Such views are difficult to reconcile with a standard Heckscher-Ohlin trade model with two countries, two goods, and two factors (skilled and unskilled labor, or alternatively capital and labor) [which predicts that] inequality will rise in the rich country and fall in the poor country...

There are, however, at least two empirical problems with the Heckscher-Ohlin story. First, it predicts that bilateral trade will be greatest when factor endowments are most different, ceteris paribus (Vanek, 1968). There is little trade between advanced countries such as the U.S. and very poor countries such as Chad. A second problem with the Heckscher-Ohlin model is that evidence from examination of specific developing countries following trade liberalization and from cross-country studies does not suggest that trade liberalization generally reduces inequality in poor countries and in fact frequently suggests that trade liberalization can increase inequality...

We propose a model of production by workers of different skill-levels (Kremer and Maskin, 1997) that is consistent with 1) the small scale of trade between countries with very different factor endowments and 2) the possibility that globalization may increase inequality in both rich and poor countries.

Their model shows that it's possible that the least-skilled masses in poor countries will be totally marginalized under globalization, and that inequality can thus rise in both rich and poor countries. Maskin and co-author Michael Kremer conclude, "if people measure their status relative to others in their own society, then they will perceive inequality increasing. This analysis corresponds to the view of many anti-globalization protestors that globalization benefits elites in both rich and poor countries."

Nine Inch Nails, Radiohead embrace free trade

Nine Inch Nails just announced that they're following Radiohead's lead and making their music available for download at whatever price fans want to pay. Conversation over at Dani Rodrik's blog has already spoken about some of the economic issues involved.

This is huge. Technological change is unraveling the entertainment industry's ability to use protectionist devices like copyright and patents to have the nanny state enforce their monopolies. As Dean Baker writes:

Whether or not copyright protection is a desirable public policy, it is undeniably a huge government intervention in the market. In the case of prescription drugs, patent monopolies raise the average price of protected drugs by more than 200 percent, and in some cases by as much as 5,000 percent. In the case of copyright protection, items like software and recorded music and movies that would otherwise be available at zero cost over the Internet, can instead be sold for hundreds of dollars. Clearly these forms of protection are substantial interventions in the economy.

The fact that copyright and patent protections are forms of intervention does not mean that they are bad, but it is essential to at least recognize this fact in order to assess their merits. Suppose we eliminated all welfare to needy mothers in the form of cash benefits from the government, and instead assigned them the right to control traffic intersections in major cities. Then we allowed these poor mothers to charge people to make turns from the intersections. These women could have the police arrest anyone who crosses the intersection under their control without paying them their royalty, just as Bill Gates will have the police arrest anyone who sells Windows without paying him a royalty. The royalties they collect could provide enough income to support them without any money from the government. In this way, we could get rid of welfare - the classic big government social program — and still ensure that poor mothers have the income needed to support their family.

Giving people the right to charge royalties to cross intersections is government intervention in the economy and is every bit as much “big government” as if the government taxed people and redistributed the money to low-income mothers. It would not change anything if we declared the right to charge fees at an intersection a “copyright.” Government intervention by any other name is government intervention.

But trade agreements like NAFTA and the WTO, although often described as "free trade" agreements, in fact contain provisions that extend the reach and length of government intervention on behalf of copyright holders. This is not surprising, since these industries are among the top lobbyists for NAFTA-style trade pacts.

Progressives should reject these NAFTA expansions to Peru and other countries. These deals will increase patent protectionism at the expense of the poor and sick in Peru. And while copyrights may seem like a less burning issue, pacts like CAFTA have already cut away at free trade in Central America by forcing a crackdown on vendors engaging in free trade in music and computer programs, much as Nine Inch Nails and Radiohead have done to the delight of their fans.

Drinking, Dieting, Industrial Policy

As I recently noted, Ha-Joon Chang is coming out with a book very soon in the US - "Bad Samaritan: Rich Nations, Poor Policies and the threat to the developing world." The book has spawned a sharp debate over at the Financial Times over the desirability of active trade and industrial policies.

After having studied industrial policies myself, I remember being surprised to hear a presenter at the American Enterprise Institute say that "the arguments for industrial policy don't hold up to closer scrutiny." Granted, any argument for or against industrial policy has to be sensitive to local conditions (landlocked Chad is unlikely to build a successful shipbuilding industry, as Martin Wolf notes), so I didn't quite understand what the presenter was referring to... was the statement meant to discredit the boom years of Latin America in the 1960s, Korea in the 1970s, China in the 1990s? It couldn't have been to celebrate the experience of Latin America or Africa for the last quarter century - during which time practically no industrial policies were practiced (except in Chile, as I talk about here.), right?

So I have still been waiting for further clarification from orthodox economists about what is meant by this pooh-poohing of the lessons of history. Here are the arguments, summarized from the FT debate, with the quick and dirty response taken from Ha-Joon:

• Orthodoxy: Dude, industrial policy is so 19th century. Sanity: Latin America, Asian, and Scandinavian development did not happen in the 19th century, dude.
• Orthodoxy: Korea didn't use industrial policy (that's why it grew before the late 1970s), except when it did (that's why it didn't grow in the late 1970s, early 1980s). Sanity: That is so 1980s of you. Korea used industrial policy before, during, and after the period in question, and it grew the whole time, except when it didn't, and that was due to a little something called a world recession.
• Orthodoxy: Free trade is the best! But if you practice free trade and you don't grow, blame it on on some other policy. Sanity: Where are we, Middle Earth?

The whole debate is worth a read, and it is not as idiotic in tone as I have made it seem. But the days when orthodox economists could shove facts under the rug for 20 years is gone, and you can tell it's causing some growing pains. To part, here are some choice Hajoonisms:

• I feel like a man being accused of promoting a copious consumption of vodka when all I have done is to recommend moderate amount of red wine as a part of balanced diet.
• It may be possible to dismiss the US as an "exception", but if there are another two dozen countries that have to be dismissed as "exceptions", then the theory has simply too many holes (the exercise reminds me of the pre-Copernican practice of drawing "epi-circles" in order to square evidence with geo-centrism).
• I think it is wrong to dismiss one’s opponent’s theory by labelling them with negative words (‘nineteenth-century’). How would Alan feel if I described him and his colleagues as "defenders of free-trade theory that was so strongly advocated by American slave-owners and opium-trafficking British imperialists"?
• I am a man whose book recommending the Mediterranean diet has been reviewed by a well-known anti-fat dietician, who unintentionally misrepresented me as praising beneficial qualities of all fats, when I had only praised olive oil. This was bad enough, but then a few other anti-fat dieticians read the review, go into a Pavlovian reaction on seeing the word, "fat", and accuse me of promoting excessive consumption of all fats, brandishing American obesity figures and Scottish heart-attack statistics. I regretfully have come to conclusion that I was absolutely right to say what I said at the end of chapter three in the book – "Trade is simply too important for economic development to be left to free trade economists".

Sherrod Brown and Tom Allen Demand Pro-Public Health Trade Policy

Well, Sen. Sherrod Brown (D-Ohio) and Rep. Tom Allen (D-Maine) have done it again. While the Deathstar Deal is needlessly splitting party unity on trade, they are showing the positive fair trade alternative. Check out this Dear Colleague that they are circulating, and go to the Essential Action page to learn more about the issues at stake.

July 9, 2007

*Support our Nation's commitment to the Doha Declaration on TRIPS and Public Health*

Dear Colleague:

We write today to invite you to co-sponsor a resolution that reaffirms the commitment of the United States to the 2001 Doha Declaration on TRIPS and Public Health (S. Res 241) and (H. Res 525).

The 2001 Doha Declaration on the TRIPS Agreement and Public Health, to which the United States and all WTO members are signatories, "affirm[s] that the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all." This international agreement properly emphasizes the importance of public health considerations in implementation of patent rules.

However, the Bush administration included Thailand on its 2007 Special 301 Report for intellectual property violators, citing "a weakening of respect for patents."

Health groups bash process and substance of "deal"

Health Gap, Essential Action and Student Global AIDS Campaign - some of the nation's leading groups fighting for access to life-saving medicines - have released a statement bashing the process and substance of the "deal." Their conclusion, even with the "deal" fixes, the FTAs "restrict rather than expand access to lifesaving medicines." Read the full analysis after the jump.

Civil society putting Big Pharma on the defense

Around the world, news is streaming in that civil society - and even governmental pressure - is putting Big Pharma on the defensive, deepening the people's revolt that David talked about here.

First off, Brazil. According to the Working Group on Intellectual Property (GTPI) from the Brazilian Network for the Integration of Peoples (REBRIP), the Brazilian federal government has decided

to issue a compulsory license for the antiviral drug, Efavirenz, whose patent is current held by Merck Sharp & Dohme. This historical decision reinforces the efforts of civil society groups fighting for access to medicines, for the sustainability of public health policies, such as universal and unlimited access to antiretroviral medicines used in the treatment of HIV/AIDS, and for the strengthening of the Brazilian public health care system, the Unique Health System (SUS).

Next stop, Thailand. Here, too, civil society is successfully pressuring governments to issue compulsory licenses for life-saving drugs. According to Congress Daily (sorry, not linkable):

U.S. officials added Thailand to the Priority Watch List in their Special 301 report, partly because of Thailand's handling of compulsory licenses it issued to import generic versions of two HIV/AIDS drugs and a heart medication ... Health activists and advocates of fewer restrictions on the use of intellectual property criticized the move. One of them, James Love, executive director of Knowledge Ecology International, said, "The sanctioning of countries for using legitimate and important flexibilities in the [WTO] agreement brings shame to all U.S. citizens who are increasingly seen in Thailand and elsewhere as bullies and hypocrites."

And, final stop, the U.S. of A. Here, public health groups and fair trade activists' pressure on House Democratic leadership may be leading to a groundbreaking reversal of the "patent protectionism" long practiced by the Clinton and Bush administrations in trade deals. Says Mark Drajem of Bloomberg (not linkable):

The negotiators also want to remove requirements that drug patents be extended if the companies face long delays in getting approval to sell their products in those countries, they said. The proposals, if adopted as part of a larger package of changes, would mean House Ways and Means Chairman Charles Rangel and the White House would cut provisions the U.S. insisted upon when those trade agreements were being negotiated... Health activists back the changes, saying they will mean cheaper life-saving medicines for AIDS victims and others in poor nations, according to Rohit Malpani of Oxfam America.

Needless to say, Big Pharma is not happy about these changes, which is why it's crucial that we continue to make our voices heard by clicking here.

Rangel speak at IIE

House Ways and Means Chairman Charlie Rangel (D-N.Y.) gave a speech last night to the Peterson Institute for International Economics.

Worth noting is the continued deliberations over what/how/if labor rights may/could/should/will be incorporated into FTAs and Fast Track. Follow the full verbatim transcript after the jump.

Corporate lobbyists hate Americans, part deux

Well, we've already heard from the U.S. Council for International Business and the Emergency Committee for American Trade, and they told us that they hate working Americans. Today, we found out (not that this is really a huge surprise or anything) that the National Association of Manufacturers does too! NAM will oppose any free trade agreement that includes new labor standards for American workers. This from Bloomberg's Mark Drajem - sorry, not linkable:

The National Association of Manufacturers, the largest industrial lobbying group, said it will oppose new trade agreements unless Democrats agree to exempt the U.S. from new labor provisions. [...] The business group is joining organizations such as the U.S. Chamber of Commerce in objecting to proposals, pushed by Democrats in Congress, that the organizations say may force revisions in state and federal labor laws such as those that limit the ability of workers to strike.

Also, in a rare moment of candor, NAM president John Engler actually said this, as reported in the article: "In addition to the labor provisions, the manufacturer's group opposes Democratic proposals to change the intellectual property provisions of the pending agreements so that developing countries can make cheaper versions of generic drugs sooner, Engler said."

In other words: "Our profit is more important than your wages or life-saving medicines." Catnip anyone?

Because drug prices aren't high enough already

As predicted, the U.S.-Korea FTA (what should we call this thing? SKFTA? SKOFTA? KORUS, like USTR is calling it? Hmm...) will almost certainly lead to an increase in drug prices — apparently not just in Korea, but maybe in the U.S. as well. According to a PharmaTimes story yesterday:

As part of the FTA, Korea has agreed to abandon its policy of requiring drugmakers to negotiate prices with the government in order for their products to be placed on the national health care system's positive reimbursement list. This policy was reported to be a major stumbling block at the talks, with US negotiators regarding it as a potential barrier to trade. Korea has also agreed to extend its patent period on innovative drugs [...] the Korean Federation of Medical Groups for Health Rights has forecast that these concessions will increase costs to Koreans by 1 trillion won over the next five years, while US critics have warned that they could also increase drug prices in the USA.

Interestingly, doesn't the Korean price-negotiation scheme that U.S. negotiators nixed sound awfully like the Democrats' Medicare drug bill that the House passed in January?

For more on this issue in general, over at Beat the Press, Dean Baker frequently riffs on how patent protection for drug companies is, ironically, a kind of protectionist boondoggle for Big Pharma, despite being promoted by "free-traders" as a necessary part of new FTAs.