1 May 2011: The Office of the US Trade Representative (USTR) has declared an intention to have all its proposals on IP protections by the commencement of the next round of TPP talks in Vietnam on June 20, spurring renewed lobbying by pharmaceutical companies to secure advantages for the industry in any US bid.
Inside US Trade reports that reports that US pharma companies are seeking a final US proposal that replicates the same 'high-standard' of the Korea-US Free Trade Agreement (KORUS) with additional protections for more recent pharmaceutical developments such as growing use of biologics (medicinal products created from biological and organic processes, rather than chemical ones).
Additionally, they are resisting any move by the US to base a proposal on the May 10, 2007 agreement. That agreement varied the original IP conditions in the Colombia, Panama and Peru US trade agreements in order to gain bipartisan support for all three to pass through Congress. The changes were designed to help ensure access to affordable medicines in developing countries. A leaked lobbying document from the Pharmaceutical Researchers and Manufacturers of America (PhRMA) indicates the May 10 agreement 'openly discriminates against the innovative pharmaceutical industry and would hinder (the) ability to compete fairly by lowering IP standards in export markets).
Lobbyists have also been outspoken about the current state of play in prospective TPP export markets, including New Zealand, which has a central state-run drug-purchasing agency (Pharmac). Pharmac is described as having a single-minded focus on 'driving down costs' that 'comes at the expense of the respect for intellectual property, transparency to the public and patient access tro better health outcomes' in the same document.
While no full details on what the US's June proposal will look like are presently available, senior USTR officials have indicated they would be open to moving away from the May 10 proposals. However, leading public health and advocacy groups are expected to use the May 10 agreement as the basis for their desired TPP proposal.
16 FEBRUARY 2011: The fifth round of TPP talks began in Santiago this week, with US pushes for more aggressive IP reform in the text expected to be a major source of debate and commentator discussion.
New Zealand, along with one another country, is understood to have submitted a draft text on IP, described as 'relatively progressive' compared to the IP provisions contained in most modern US FTAs.
As covered previously on TPPDigest, NZ negotiatiors have expressed concerns at the US's more aggressive demands on IP in the talks, which were understood to expand on IP provisions in the US-Australia FTA and make up for ground conceded in the current version of the Anti-Counterfeiting Trade Agreement (ACTA). The US reportedly submitted its own draft text to negotiators at the same time as NZ.
As with the Auckland talks last December, public statements on the progress of the talks are expected to limited to brief press conferences with stakeholders and the media.
However, delegates will be presented with signed open letters and petitions from civil society groups in Australia, Malaysia, Chile, NZ and the US asking that negotiations be made public and transparent. Negotiators will also be presented with a paper authored by Professor Jane Kelsey and Third World Network's Sanya Reid Smith, linking the agreement to continued international financial instability and offering a mock draft text.
Professor Kelsey says the current negotiations fail to recognise that the 2008 global financial crisis was the product of excessive liberalisation and deregulation, and that rather than rethinking an unsuccessful model, the TPPA negotiations appear to be bolting the door closed on the options for governments to re-regulate the financial sector and impose controls on speculative capital flows in ways that meet the needs of their people”.
The mock text is intended to approximate the actual text, still under negotiations conducted in secret. It is based on existing FTAs between the US and Singapore, Australia, Chile and Peru.
The authors recommend that financial services, financial investment and movement of currency are all excluded from the TPPA. Failing this, the agreement must provide allowances for national governments to continue to regulate the financial sector and financial transactions so as to prevent another crisis in the future.
20 JANUARY 2011: The Sydney Morning Herald reports that Phillip Morris may be using Australia's shift to implement plain packaging on cigarettes and tobacco as an example of 'extreme and disproportionate' legislation that the TPP should be able to challenge through 'investor-state' provisions.
Australia's Labor government announced last April that cigarettes would have to be sold in plain packaging from mid-2012, which would be a world first.
In a submission on the proposed trade agreement to the US Trade Representative, Philip Morris described the plain-packaging laws as an 'initiative of concern' which would allegedly violate international law and intellectual property rights.
Australian Minister for Trade Craig Emerson has offered no committment either way on the inclusion of investor-state provisions in the TPP, but has indicated that an attempt by any tobacco company to undermine Australian anti-tobacco legislation would be so much 'whistling in the wind'.
Thomas Faunce of the Australian National University has suggested in a paper for the Medical Journal of Australia that in the event of such provisions being included, Australia and other countries could initiated an interpretative declaration limiting their effect on the area of public health. Alternatively, he suggests a clause in the agreement could require that non-discriminatory legislation in the pursuit of public health and safety not be deemed expropriatory or compensable for damages.
19 JANUARY 2010: Inside US Trade reports that the US will hold off tabling a full and formal chapter on IP rights at the next round of TPP talks in Chile because of a need to carry out intra-agency and congressional consultation on areas of potential controversy.
An official reportedly indicated 'very wide' differences of opinion among US stakeholders, and is urging private-sector ones to handle suggestions on how to best handle hotter topics.
It is understood that one such contentious area is that of 'secondary liability' on Internet firms for violations of copyright by individuals. The US was intending to include this in the Anti-Counterfeiting Trade Agreement (ACTA), but the final language of that text as of August last year made the imposition of secondary liability on Internet firms optional. Secondary liability is strongly advocated by US movie and recording industry producers.
Further complicating the issue is the May 10 2007 agreement between the then-Bush administration and House Democrats on IPR, which relaxed stringent provisions on data exclusivity, patent linkage, and patent term extension. US industry groups oppose the retention of these relaxed provisions in the TPP context.
Overall, US private-sector groups say IP has been one of the slowest progressing areas of discussion in TPP talks to date. As previously reported, NZ has already drafted a paper opposing US approaches on IP and suggesting that the protections in TPP be limited to those already established under the multilateral WTO TRIPS agreement.
However, other sources are indicating Australia may end up being an ally of the US in the push for stronger IP protections. Additionally, sources have speculated that NZ's stance on IP is a negotiating tactic which they may relent on should they get the agricultural and dairy access in the US market they desire.
Professor Jane Kelsey has criticised the bid by USTR negotiatiors to make secondary liability a part of TPP intellectual property provisions. She released the press release below the break, warning that the move could 'reignite the hugely successful international campaign against secondary liability that followed the leak of the (local) ACTA text', on January 17.
20 DECEMBER 2010: Inside US Trade reports that USTR held a meeting with US stakeholders last week, where it was indicated that US negotiators would likely draft a proposed text covering all aspects on an intellectual property rights chapter at the fifth round of talks in Chile in February.
To date, the US has tabled proposals for general provisions and trademarks of an IP chapter of TPP. The February talks would see the US table sections on copyright, patents, and IP rights enforcement.
A blog on Knowledge Economy International, representatives of which were present at the stakeholder meeting, indicates that the US intends that unlike ACTA (in ACTA's current form), the TPP will have a dispute resolution process where parties may be subject to fines and penalties for breach of the agreement. KEI were also told the Obama Administration would not consider anything which lowered IPR norms as part of the TPP - in effect, IP laws and rights can only be harmonised upwards in TPP. KEI has some good examples of how this departs from executive policy under both the Clinton and Bush Administrations on its site.
20 DECEMBER 2010: The New Zealand media published a series of cables at the weekend indicating covert pressure on pharmaceutical reform by US lobbies, as well as serious doubts by NZ's own trade negotiators about the possible advantages of any US-NZ free trade agreement.
Writing in the Sunday Star-Times, Nicky Hager reports that chief trade negotiator Mark Sinclair privately told a visiting US State Dept official that New Zealand had little to gain from a free-trade agreement. This differs significantly from the accounts of the potential FTA benefits given by Prime Minister John Key and Trade Minister Tim Groser.
According to the cable, detailing a February 2010 meeting, Sinclair told US Deputy Assistant Frankie Reed there was a public perception a US free-trade agreement would be an 'El Dorado' for NZ's commercial sector, but that 'the reality is different' and that NZ must 'manage expectations' about the benefits of such an agreement.
Neither Sinclair nor the NZ government has deigned to comment on the content of the cable, which also warned that negotiations would prove 'gut-wrenching' for New Zealand and criticised member states for 'hanging on to 'little fantasies' about what is acheivable'.
For the US's part, a December 2004 cable reports that the American drug industry has been 'trying in vain to persuade the New Zealand government to change its restrictive pricing policies on pharmaceuticals' and that their new tactic is to reach out directly to NZ consumers to foster demands for 'cutting-edge drugs not covered by government subsidy'. More surprisingly, that cable goes on to say that pharmaceutical companies saw direct opposition in the then-Labour government's Cabinet, particularly in former Primer Minister Helen Clark. It goes on to note that "the industry may be paying a price for its unsuccessful effort in 1990 to unseat Clark, who at the time was health minister".
The full-text cables on Mark Sinclair's meeting with Frankie Reed can be read here and here. An earlier cable in which Groser expresses strong desire for the US to come to the table on TPP is here, warns about 'anti-US' factions of the opposition Labour Party, and indicates his government will handle the public aspect of negotiations in a 'mature' way can be found here.
Professor Jane Kelsey has argued that the leaks indicate comprehensively that the government sees 'no tangible benefits' from a NZ-US free trade deal, and that the government should concede as such to the public. Her press release following these reports can be read below the break.
The TPP Digest is on the lookout for further Cablegate leaks relating to TPP, with all and any actual or prospective members, and will publish them as they become available.
15 DECEMBER 2010: Australia's Productivity Commission has released its final version of a report on the benefits and drawbacks of free trade agreements, after releasing a draft for consultation in July.
The 392-page report says that "businesses have provided little evidence that Australia's bilateral and regional trade agreements have generated commercial benefits".
Specific criticisms of existing models have been that:
- Selection of prospective partner countries is not prioritised or co-ordinated strategically;
- Other options were not adequately assessed before bilateral trade agreements were entered into;
- Modelling results pre-negotiation were used to oversell the benefits of the agreements;
- Consultation once negotiations had started were inadequate;
- Parliament is often poorly placed to handle the outcome of talks.
Furthermore, the Commission recommended that agreements should not guarantee foreign investors special provisions 'over and above those already provided by the Australian legal system', should not contain IP provisions as a matter of course, and that the government should be cautious about including labour standards and exclusions on cultural grounds.
It has also recommended that bilateral deals be subject to independent analysis after they are completed and before they are signed, a suggestion which has attracted the ire of some other negotiating partners who believe this could undermine Australia's negotiating position in future talks.
The full report can be read here. Canadian IP law expert Michael Geist has summarised the relevant areas of the Commission's report relating to intellectual property provisions on his blog, while Aftinet has issued a press release heralding the report. The transcript of an ABC news report about the Productivity Commission's findings appears below.
DECEMBER 5 2010:
The December 3 edition of Inside US Trade reports that a draft paper which has now been finalized and submitted to the Office of the US Trade Representative by a coalition of US businesses is urging US negotiators to actively shape IP regimes in other TPP countries in order to protect US geographical indicators (GI’s). Apart from protecting certain GI’s already existing in the US, the coalition wants the policy to make certain products produced in ‘significant quantities’ outside a proposed protected region (for example, ‘feta’ cheese) ineligible for GI protection. This is intended to help current US manufacturers and producers and save them the loss or cost of relabelling and rebranding.
As well, the paper requests that US negotiators replicate the IP provisions of the as-yet unsigned US-Korea trade agreement as a baseline to a text, especially in the area of patents and copyrights. It also asks for punitive protections extending beyond those in the current version of the Anti-Counterfeiting Trade Agreement (ACTA), such as a requirement that TPP states outlaw filming in theatres.
The paper, written by the Pharmaceutical Research and Manufacturers of America (PhRMA), the US Chamber of Commerce, and the Motion Picture Association of America (MPAA), also suggests that the TPP go beyond the US-Korea FTA in terms of software patents. These are traditionally a contentious area of IP rights, with critics arguing that patenting software effectively grants property rights over formulas and algorithims (ie: knowledge itself, rather than new physical inventions or processes).
The paper also contains implicit criticism of New Zealand’s public pharmaceutical purchaser, Pharmac. At one point, it urges drafters to deal with regulatory barriers which ‘have the effect of delaying or restricting access to innovative medicines to patients’. NZ is also cited as a TPP country that has yet to fully implement requirements of the World Intellectual Property Organisation (WIPO)’s Copyright Treaty and Performances and Phonograms Treaty.
5 DECEMBER 2010: Members of the public who want to demonstrate their opposition to a NAFTA-style TPP and hear from alternative TPP experts and commentators this week in Auckland have three great opportunities to do so, with two public demonstrations on Monday and a public meeting on Tuesday 7 December.
Information is as follows:
Protests: Monday 6th December: “No to the TPPA. Stop Gambling with Our Future
8.30am, SKYCITY Convention Centre, Federal Street, Auckland
5.30pm, Voyager Maritime Museum, Corner Quay and Hobson Streets, Auckland Viaduct Basin
Public meeting: Tuesday 7th December
6-8 pm St-Matthew-in-the-City, cnr Hobson & Wellesley Sts, Auckland
Main speaker: Prof Jane Kelsey. Commentators Mike Smith, Sanya Read Smith (Third World Network), Andrew Campbell (FinSec) and other international guests(
The views expressed during this event are not necessarily those of St Matthew-in-the-City)
The Tuesday event is free. All members of the public are completely welcome to all events, whether they consider themselves well-familiarised with free trade agreements or whether they are anxious to learn more about what they may contain and NZ’s role within them.
Also note that Jane Kelsey and Third World Network's Sanya Read Smith, who will be present in Auckland for the talks, will each be speaking about the leak and other TPP issues at a media briefing at the Welcome Room, Sky City Hotel, at 3pm on Monday 6 December. All media are welcome for this event.
While a number of key activities and discussions will be private and not open to the media, those not attending the talks but following them locally during the week may be interested in this programme of stakeholders' events. It includes presentations by both business and civil society groups, including Council of Trade Unions chief economist Bill Rosenberg and Agcarm Chief Executive Graeme Peters. Thursday and Friday's seminars are devoted to environmental issues and the question of how the TPP will deal with these.
5 DECEMBER 2010:
A leaked negotiating document
from New Zealand’s TPP talks has revealed a fundamental conflict between US and NZ positions on intellectual property in a possible agreement.
At the weekend, Public Citizen released the confidential paper, combined with analysis. It rebuffs the US’s ‘high-standard’ IP rights provisions as included in their recent bilateral trade agreements, particularly as they apply to medicine, entertainment and software patents.
The tenor of the New Zealand paper absolutely goes against that of a briefing paper to USTR negotiators previously covered by Inside US Trade and this site, in which US pharmaceutical companies singled out Pharmac as a non-tariff trade barrier which would pose a problem in negotiations.
The NZ paper goes on to recognize the effect of recent domestic debates on IP, including the 2009 controversy around proposed and abandoned changes to the Copyright Act and the recently concluded Anti-Counterfeiting Trade Agreement (ACTA). As it says, such debates ‘are taking on a significant political dimension in many of our societies. Many IP users as well as some innovators have become mobilised to oppose the further strengthening of IP rights’.
Although the proposed Copyright Act changes were first initiated by the previous Labour government, the grassroots movement against them was one of the first direct public challenges to John Key’s government post-2008. The government has also continued to face scrutiny from Maori iwi about how its IP laws are used for their traditional indigenous art, design, and knowledge. The Key government was also criticized for the secrecy under which Wellington-based ACTA negotiations were conducted, a point also acknowledged in the paper.
Public Citizen’s press release on the leak can be found here or by reading more below. An executive summary can be read here. Third World Network has also analysed the paper, and Jane Kelsey and TWN's Sanya Read Smith will each be speaking about the leak and other TPP issues at a media briefing at the Welcome Room, Sky City Hotel, at 3pm on Monday 6 December (all media welcome).
25 OCTOBER 2010: Inside US Trade reports that Canada has been told by the US and other TPP parties that it is still not ready to enter negotiations.
It is understood the message was conveyed to Canada at a sideline meeting to the Brunei round at the start of October - the rationale being that a 'range of issues' existing partners had asked Canada to address have yet to be satisfactorially resolved. Chief among these are Canada's retention of a supply management system for its dairy and poultry sectors, which has led New Zealand to criticise its bid, and a perception by the US that Canada better needs to address intellectual property rights.
Canada has not stated which specific concessions it would make in its dairy sector or elsewhere, were it to gain membership.
In Brunei, Vietnam was also urged to decide ahead of the fourth round of talks in New Zealand whether or not to join as a full negotiating partner - to date, its status has been that of an 'associate member', which has saved it some of the responsibilities and commitments of full negotiating partners. Officials have not been specific as to what would occur if Vietnam could not give an undertaking as to full membership before the December round.
The US source IUT spoke to was also non-specific as to any role for Japan in the near future in TPP talks . They were clear that no informal discussion between Japan and the US has occurred to date, and indeed suggested that Japan may be perceived much as Canada - a potential party with too many domestic hurdles at present to be seen as a viable partner by members with strong agricultural sectors. It was also suggested that as the talks become more robust, US negotiators are keen to set a cap on the current nine negotiating members, requiring other states to accede in the future.
5 NOVEMBER 2010: NZ IT news site Computerworld has quoted NZ intellectual property lawyer Rick Shera as warning that that US and prospective Japanese participation in the TPP could signal a renewed attempt by by both countries to secure more stringent IT protection provisions they have not been able to secure in the latest version of the ACTA (Anti-Counterfeiting Trade Agreement) text.
Shera believes that as the European Union presented a major obstacle to 'maximalist' IP protection in ACTA talks, the US may be using the TPP negotiations as an opportunity to circumvent opposition and set a tougher regime up among Asian nations.
The full article follows below.
1 OCTOBER 2010: Assistant US Trade Representative Barbara Weisel has welcomed the Philippines interest on joining the TPP, but has warned that doing so will involve 'significant legal reforms', including a strong IP rights system and the near-total opening up of the services sector.
BusinessWorld reports Weisel recognised that TPP commitments may even require the Philippines to undertake constitutional reforms (the constitution presently bars foreign ownership in a number of service sectors), and that the administration of Benigno Aquino III will have to generate 'domestic consensus' to permit such changes to get through.
The Philippine National Economic and Development Authority (NEDA), which would be negotiating any service sector liberalisation, has said full participation in TPP talks will take time because of the present legislative restrictions, and that no negotiation can occur ahead of making these reforms.
Weisel noted financial, telecommunications and computer services as areas of key interest for the US in the Philippines. The original BusinessWorld article follows below.
OCTOBER 4 2010: Inside US Trade reports that a coalition of US business groups supporting the TPP negotiations have urged the USTR to include a separate TPP chapter to deal with regulatory coherence, in light of the reported emphasis negotiators have put on the topic in talks to date.
The coalition, headed by the US Chamber of Commerce, previously submitted a paper on regulatory coherence to negotiators in May. They have now issued another document of general recommendations, including that agreeements be made on a sector-by-sector basis. Sources say this may reflect the fact talks on coherence are at an early stage.
Other recommendations are:
* that negotiators identify in separate chapters a list of both best practices and unacceptable regulatory conditions;
* that the US request that other parties in the talks deliver a list of 'regulatory coherence deliverables and achievements' to set a sense of their initial progress;
* that any regulatory coherence chapter contain provisions on meaningful stakeholder consultation.
The coalition has also released a draft document of 14 'principles' ahead of the third round of TPP talks in Brunei. Its recommendations include:
* the conclusion of talks by late 2011;
* a set date for elimination of all tariffs and non-tariff barriers;
* that the TPP build on existing IP protections in previous US FTAs.
Sources say that as of early October, the US had not yet placed any concrete requests on regulatory coherence at the feet of the other negotiating partners, but may submit a concept paper on regulatory coherence during the third round of talks in Brunei, asking that parties outline what (if any) regulatory bodies and coordinating systems they currently have or use. Another source suggested that the US will aim to base its approach on its current position at the Doha talks.
It is understood that Singapore has already submitted a paper on regulatory coherence, while New Zealand, which is chairing TPP talks on regulatory coherence, plans to submit its own concept paper on the issue when it hosts the next round of talks in December.
13 SEPTEMBER 2010: Public Citizen, along with 19 other US activist groups, has signed off an open letter to US Trade Representative Ron Kirk asking that any negotiated TPP restrict intellectual property provisions to levels no higher than those set under the TRIPS agreement.
It asks instead that the US build upon the more progressive IP exemptions allowed for in the US-Peru Trade Promotion Agreement, which made patent term extensions and patent linkage voluntary while placing limits on the term and scope of data exclusivity.
It also asks that accession or adherence to ACTA (the Anti-Counterfeiting Trade Agreement) not be a requirement of a TPP. It is believed ACTA could threaten access to several generic medicines. New Zealand, the US, Singapore and Australia are presently negotiating parties in that agreement. The letter can be read here.
19 JULY 2010: A draft research report by the Australian government's independent Productivity Commission has suggested that the national income flowing from future bilateral and regional trade agreements 'is likely to be modest'.
The report, released online last Friday, suggests that the Commission has received little evidence from Australian business to show that preferential agreements of this sort have provided substantial commercial benefits, and that current processes for assessing and prioritising such agreements "lack transparency and tend to oversell the likely benefits". Among its recommendations, it suggests Australia continue to pursue progress in the Doha Round, while carrying out full and public assessments of proposed agreements after negotiations have concluded, and that a cautious approach be taken to provisions on IP, investor-state dispute settlement, labour standards and cultural matters.
The government is expected to receive the Commission's final report in November 2010. The draft, meanwhile, can be read here.
26 MARCH 2010 - La Republica and IPS report that a former Peruvian Deputy Minister of Labour, Julio Gamero, has warned that the large number of trade agreeements Peru has signed in the past year, as well as the impending negotiations in the TPP, may be having a negative impact on labour rights.
Gamero warned IPS that over the past three years, the number of collective bargaining agreements, health and safety inspections, and unionised members of the workforce has fallen dramatically. He is critical of the government's response, saying that it was not until a US delegation on labour issues visited Lima that a liaison office between government and unions was created. Coordinator for the Peruvian Network for Globalisation with Equity (RedGE), Alejandra Alayza, says it is essential to guarantee labour rights in any further agreements so that workers may share in the benefits.
The IPS article, which follows below, also looks at the effect of tariff-lowering on peasant farmers, as well as the TPA with the United States's impact on indigenous forestry rights and intellectual property.
21 MAY 2010 - Last week was deemed 'World Trade Week' in the United States by the Obama Administration, and saw US Trade Representative Ron Kirk has been work to encourage buy-in for support of the TPP from both the US Chamber of Commerce and members of the public.
On 18 May, Kirk spoke to the US Chamber of Commerce's 'Next Steps on World Trade' conference, with a focus on his administration's 'high-standard, 21st century, Asia-Pacfic regional trade agreement'. He again confirmed that San Francisco would be the site of negotiations on the week of June 14. With regards to market access arrangements, he said that any agreement would need to be 'forward looking' while also possessing 'enough flexibility to accomodate sensitivities'.
Kirk also indicated that the second round of negotiations would focus on 'value-added' benefits of a regional agreement, such as greater regulatory cooperation on issues such as food safety.
On 21 May, the USTR held an "online chat" session in which it answered submitted questions about various aspects of the TPP. The chat indicated that the USTR is focused on obtaining an investor-state dispute mechanism for the TPP, that it intends to 'consult closely with stakeholders' over the possible changes to rules of origin in the US textile industry that the TPP would require, and that the US will seek 'high-standard' IP enforcement rights. A transcript of the chat follows below.
New Zealand economic commentator and editor of interest.co.nz Bernard Hickey has written in the New Zealand Herald arguing against a NZ-US FTA. Central to his article's concerns are the possibility of an agreement where dairy is excluded, the opening-up of the NZ Pharmac system to competition, and the possibility of more stringent IP laws (New Zealand recently considered controversial reforms that would have bought it closer to the existing US framework).
Hickey's editorial comes as US and NZ dairy groups continue to dispute the effect of a FTA allowing NZ dairy farmers access into the US market. A Stuff article about the US National Milk Producers Federation's allegations against Fonterra is below the break.