In the early hours of Monday October 5th in Atlanta, delegates from 12 Pacific Rim countries – the United States, Japan, Canada, Australia, Malaysia, Mexico, New Zealand, Peru, Brunei, Singapore, Chile, and Vietnam – announced the conclusion of negotiations for the Trans-Pacific Partnership (the TPP).
The scope of the TPP is massive, covering more than 40% of the global economy. The agreement aims to lower barriers to trade and promote investment between TPP countries by slashing tariffs, setting minimum standards in intellectual property, environmental, and labour laws, as well as allowing the direct resolution of disputes between investor companies and TPP countries (aka Investor State Dispute Settlement – or ISDS – provisions).
As a regional agreement, the TPP imposes minimum standards above those already set out under international trade law, such as the World Trade Organization’s General Agreement on Trade and Tariffs (GATT) and the Trade Related Aspects of Intellectual Property Agreement (TRIPS), leading to descriptions of the TPP’s intellectual property chapter as a “TRIPS++” agreement.
The inclusion of increased intellectual property minimum standards, along with ISDS provisions, has greatly concerned the global health community with Médecins sans Frontières (MSF) declaring previous drafts of the TPP reveal “a terrible deal for access to affordable medicines”.
Following extensive negotiations between the Australian and United States lead negotiators, Andrew Robb and Mike Froman, the TPP appears to provide important compromises for public health. However, in response to the TPP’s agreement, MSF responded that while the text “has improved over the initial demands, the TPP will still go down in history as the worst trade agreement for access to medicines in developing countries” and may become “a dangerous blueprint” for future trade deals.
Despite Monday’s agreement, the finalized TPP text is yet to be made publicly available. In addition to past leaked drafts (by Wikileaks), we do know some things about the finalized text from statements made to the press by negotiators. The full TPP text is expected sometime over the next month as the process for domestic approvals – such as congressional or parliamentary approvals – for the 12 negotiating countries begin. Here, I examine two key issues in the finalized TPP that are of particular concern for global health: intellectual property minimum standards for biologics, and ISDS provisions.
1. Intellectual Property & Biologics
Biologics are therapies developed from biological sources, such as vaccines, blood and blood products (such as mono-clonal antibodies), cells, or gene-therapies. Typically, biologics are more difficult to identify and characterize than chemically synthesized drugs. With the aim of encouraging innovation, under US law, clinical trials data for biologics is kept secret (“data exclusivity”) for 12 years – effectively preventing generic versions from entering the market until they can access the data. Other TPP partners have varying legal requirements: Brunei offers no period of data exclusivity for biologics; Australia, New Zealand, Singapore and Chile provide 5 years exclusivity; and Japan offers 8 years exclusivity. Until the final stages of TPP negotiations, the US lobbied heavily for inclusion of a minimum standard of 12 years data exclusivity for biologics. However, a group of TPP negotiating countries, led by Australia, objected strongly to the US position, proposing an alternative 5 year period of data exclusivity. Until the finalized text is released in the coming months, it appears that this lobbying was partly successful, with TPP parties reportedly agreeing to a 5 year mandatory minimum period of data exclusivity for biologics. While not as exclusive as a 12 year period, this still allows some countries to have longer periods of exclusivity, as well as imposing periods on countries – such as Brunei – that previously did not require it.
2. Investor State Dispute Settlement (ISDS) provisions
Under World Trade Organization (WTO) agreements – such as GATT or TRIPS – WTO member countries can bring a dispute against another member country that has adopted policy measures or actions considered to be in breach of WTO agreements. In some circumstances, WTO member states may seek dispute resolution if a company or industry has been able to convince them to use WTO dispute settlement to challenge the legitimacy of foreign policies or actions as the WTO dispute settlement procedures can only be between states.
In contrast, Investor-State Dispute Settlement (ISDS) provisions allow companies to bring disputes against states directly. ISDS provisions are included in many bilateral and multilateral free trade agreements – including the North American Free Trade Agreement (NAFTA), and the Australia-Hong Kong Bilateral Investment Treaty under which Philip Morris has brought a dispute against Australia for its tobacco plain packaging laws. This week at Georgetown University, WHO Director-General Margaret Chan stated that this ISDS dispute has cost Australia more than $50 million. During this same speech, Director-General Chan noted the importance of countries being free to legislate to protect public health without fear of private companies launching legal action to protect their products.
No doubt following this experience, during the TPP negotiations Australia successfully led a campaign to exclude the tobacco industry from being able to use the TPP’s ISDS provisions. While an important win for public health measures in the Pacific Rim, the exact breadth of this exception is not yet clear. It is also not clear whether and how “public health” is included as an exception to ISDS in the TPP. As a result, other industries that have a profound impact on public health – such as pharmaceuticals, food, drink, coal, mining, and natural gas – may still be able to use ISDS provisions to dispute government legislative efforts to protect public health.
Where to from here?
Over the coming months, the 12 negotiating parties will commence their domestic processes to approve signing of the TPP. In the United States, this means Congressional approval – a process which is likely to extend into next year. With the forthcoming 2016 election, the TPP is likely to continue to feature in campaigning for party nominations and perhaps even the Presidential race itself. For now, we wait to see the finalized text itself: the culmination of an eight-year long negotiations process, conducted in secret, that will no doubt have a profound impact on global public health well beyond the Pacific Rim.
