“The Trans-Pacific Partnership means that America will write the rules for 21st century trade,” according to President Obama, but as Reuters reports, U.S. unions, lawmakers and interest groups questioned the long-awaited text of a landmark U.S.-backed Pacific trade deal on Thursday. “It’s worse than we thought,” Lori Wallach, director of Public Citizen’s Global Trade Watch, told members and U.S. labor representatives said the agreement contained weak, poorly worded or unenforceable provisions, concluding “we do not believe those improvements are significant or meaningful for workers.” It appears, that ObamaTrade may be a boon for factory and export economies like Malaysia and Vietnam, but – as expected – will achieve little for the average joe in America.
President Barack Obama, who championed the deal, will have to muster support among moderates in Washington to ensure ratification. “The TPP means that America will write the rules of the road in the 21st century,” Obama said in post online. “If we don’t pass this agreement – if America doesn’t write those rules – then countries like China will.” As Reuters reports,
U.S. unions, lawmakers and interest groups questioned the long-awaited text of a landmark U.S.-backed Pacific trade deal on Thursday, setting up a potentially long and difficult path to ratification by the United States, the biggest of the 12 partners.
Arguments over the Trans-Pacific Partnership agreement, aimed at freeing up commerce in 40 percent of the world’s economy, are set to focus on transparency and how the pact affects workers and businesses.
“It’s worse than we thought,” Lori Wallach, director of Public Citizen’s Global Trade Watch, told reporters on a conference call after examining the full text of the pact, which was unveiled early on Thursday.
U.S. labor representatives said the agreement contained weak, poorly worded or unenforceable provisions.
“There are improvements, but we do not believe those improvements are significant or meaningful for workers,” Celeste Drake, trade and globalization policy specialist at the AFL-CIO, said on the same call.
Japan has pledged to ease trade barriers on imported french fries and butter, which have been in short supply in the Asian market, while Malaysia will eliminate tariffs on all imported alcohol for the first time in a trade agreement.
Other firsts cited by the partners – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – include a prohibition on subsidies to harmful fisheries as well as commitments to discourage imports of goods produced by forced labor and to adopt laws on acceptable working conditions.
Malaysia will have to implement reforms to combat human trafficking, and Vietnam will have to allow independent labor unions before they can reap benefits of the pact.
But the deal does not include measures demanded by some U.S. lawmakers to punish currency manipulation with trade sanctions, disappointing carmaker Ford Motor Co, although members pledged not to deliberately weaken their currencies.
The TPP would be a boon for factory and export economies like Malaysia and Vietnam. Anticipated tariff perks are already luring record foreign investment into Vietnamese manufacturing, and both countries are expected to see increased demand for their key exports, including palm oil, rubber, electronics, seafood and textiles.
That could put pressure on several of Asia’s major developing economies, including the Philippines and Indonesia, which have recently expressed interest in signing up to the pact.. Thailand said it was studying the deal and might consider joining.
* * *
The sprawling deal would affect a variety of issues, including tariffs, labor rights, and international investment. But the deal’s most controversial provisions are the ones limiting competition in the pharmaceutical industry. According to Doctors Without Borders, “The TPP will still go down in history as the worst trade agreement for access to medicines in developing countries.”
Though the final text of the agreement won’t be available for at least another month, here’s what we know so far.
The TPP will drive up costs for some of the most expensive drugs on the market in the poorest countries
One of the biggest sticking points in the negotiations had to do with data protection for biologic drugs.
Biologics are treatments made from biological sources, including vaccines, anti-toxins, proteins, and monoclonal antibodies for everything from Ebola to cancer. As the Brookings Institution explains, biologics are much more structurally complex than regular “small-molecule drugs” and are therefore more difficult and expensive to make, costing on average 22 times more than nonbiologic drugs.
Because of the high prices of these drugs, companies are very interested in developing “biosimilars” – cheaper copies of the original drugs, similar to generic versions of pharmaceuticals. The reason these biosimilars are so cheap is that manufacturers can usually just rely on data from clinical trials submitted by the maker of the original biologic. But, of course, the maker of the original drug doesn’t want everyone using its data and making cheap knockoffs.
So in the United States, there are really protective rules around this: Any maker of a biologic gets 12 years of data exclusivity. The FDA can’t approve a similar drug that relies on the original data during this time. (Theoretically, other companies could conduct their own trials to create a biosimilar, but because this is so expensive, it defeats the point.) By contrast, in other countries, there are looser rules – or no rules – around such data exclusivity. Japan offers eight years, for instance. Brunei offers zero.
As part of the TPP, the United States (and the pharmaceutical lobby) had been pushing to get every country to agree on 12 years of data protection for biologics. The final agreement falls somewhere in between, with a period of data exclusivity from at least five to eight years, according to the New York Times.
This means the agreement will prevent more affordable biosimilars from entering the market for a longer period of time in places that previously had no bar to entry.
* * *
The earliest the TPP could come before Congress is March, just as the U.S. presidential primary season is heating up, creating the risk that the deal becomes a campaign issue. U.S. Trade Representative Michael Froman warned that trying to reopen the complex deal could unravel the whole package… which may not be a bad thing after all.