Australia’s Pharmaceutical Benefits Scheme is under attack at the 17th round of Trans Pacific Partnership (TPP) negotiations underway in Lima. It is not just the cheap drugs enjoyed by Australia thanks to this brilliant scheme, it is the very question of national sovereignty.
The Australian delegation is winning accolades around the world for its stand on national sovereignty but this has not yet made headlines locally.
This article discusses the reasons why these negotiations are so critical to our future and concludes with a plea to bring all the pressure we can to bear on politicians of all stripes to maintain our proud bipartisan stance on this issue.
What is this thing called TPP?
This is essentially a free trade partnership between the nations of the Asia Pacific. It currently engages Brunei Darussalam, Chile, New Zealand, Singapore, Australia, Canada, Japan, Malaysia, Mexico, Peru, the USA and Vietnam. It seeks to facilitate the economic integration of the Pacific region and provide the infrastructure to make this the Pacific Century.
There are many sources of information about the nature of the agreement and the details of the current negotiations. The wikipedia site is outdated and has not been significantly updated since February this year. The Australian Department of Foreign Affairs website is as good as any and is written in language that makes sense to most Australians http://www.dfat.gov.au/fta/tpp/
What’s wrong with free trade anyway?
The historical problem with free trade partnerships has been the tensions between rich and poor nations. The reason that the Dohar round of Free Trade Talks failed in November 2011 is because India, Brazil, China and South Africa refused to accept that they should be raped and pillaged by wealthy robber barons posing as international diplomats. Those are strong words, but they sum up the mood of the frustrations that emerged over ten years of talks. That’s right, the talks took ten years and effectively ended multilateral trade talks for ever. For a more measured account that verifies the intent of that statement read the Indian Economic Times article at http://articles.economictimes.indiatimes.com/2012-06-01/news/31959341_1_ptas-wto-multilateral-trade
The alternative to these global talks have been Free Trade Agreements between pairs of country or specific regions. The Free Trade Talks between China and Australia have been in the news recently following China’s request to have the same right to buy Australian farms as the US and New Zealand without scrutiny by the Foreign Investment Review Board . Australia has a Free Trade Agreement with the USA, negotiated by the Howard Government in 2004.
This type of Partial Trade Agreement (PTA) are often blamed for the impoverishment of already poor countries.
How real are these concerns?
The collapse of the Greek and Spanish economies for example has been blamed by many commentators on the liberalisation of lending to southern institutions by northern investors. As the Germans called in the loans on their southern debtors the northerly flow of money bankrupted the Mediterranean nations. http://www.independent.co.uk/news/world/europe/france-and-germany-to-blame-for-greece-crisis-7218923.html
The North America Free Trade Agreement has been notorious for the negative impacts it has had on Mexico. US companies move their factories across the border where labour is cheap and environmental laws lax. Where the Mexican government has attempted to tighten laws, or sue companies that have killed Mexicans with toxic pollution, the US companies have sued the Mexican government under the terms of the free trade agreement for interfering with trade. http://www.polarisinstitute.org/we_should_all_support_nafta_renegotiation
The recent collapse of the Mexican states closest to the US border and the murder of journalists and community campaigners can be attributed to the incapacity of the government to impose its will in an area where its authority (and revenue base) has been so seriously undermined by this instrument of international law specifically designed to enrich corporations at the expense of a foreign people.
But surely corporations only do what the law allows
It is true that corporations are simply legal institutions designed to generate profit and that they generally operate within the law, and cannot be blamed if the laws do not protect others from their activities.
The problem with this benign view, however, is that corporations actively pursue changes to laws that allow them to externalise the costs and internalise the profits. We see this every day through the lobbying that goes on in our media.
The Minerals Council of Australia spent will in excess of 10 million dollars opposing the first super profits tax, designed to get miners, then effectively paying 13% tax on profits in the tens of billions (they were legally supposed to pay 30% but loopholes allowed them to get away with the much lower figure) to pay their fair share. It is no accident that Gina Rinehart bought 15% of Fairfax newspapers as this kerfuffle unfolded.
As well documented by Ted Nace in his book Corporate Gangs of America, http://www.gangsofamerica.com/ the global corporation was invented by the railway and oil barons of wall street that wanted to escape the governance of the American Constitution. It was deliberately designed to control corporate greed, specifically banned monopolies and treated corporations of shareholders as temporary project funds, licenced by state governments to operate for limited periods under the supervision of State law.
The fourteenth amendment defined the rights of an individual under the law and protected the individual from unjust laws of individual states. This was an adjunct to the famou 13th amendment recently depicted in the film Lincoln, which abolished slavery. The corporate barons spent decades cultivating judges to recognise their rights as individuals under the 14th and exonerate them from the governance of the states. It was not until the Great Depression of the 1920s that the US Federal Government saw fit to do anything to rein in the power of these financial power-brokers.
Now, with more than 40% of the wealth in the USA in the hands of the top 1%, those corporations are following the same form of breaking government control through these international trade agreements.
What’s Australia got to do with it?
Australia is getting global attention for its stand at the TPP talks, precisely because it has drawn a line in the sand and has stood up to for the rights of sovereign governments over corporations.
Australia has a proud, bipartisan history of taking this position.
The Howard government stood firm on the right of the Australian government to run a pharmaceutical benefits scheme and subsidise certain drugs. This has been roundly criticised by Big Pharma who strongly lobbied the US government not to accept the compromise and who have made a number of attempts to overturn them since. Peter Sainsbury’s speech at the time the FTA was being negotiated is as good a reference as any. http://thegenerator.com.au/australia-us-free-trade-agreement-and-the-pharmaceutical-benefits-scheme-pbs/
Funnily enough this is precisely one of the targets of the TPP negotiations.
The Australian government has recent experience of how difficult it can be to maintain control of its own destiny when international law is abused by corporations seeking to determine the laws to their own advantage. When it recently passed the plain packaging laws for tobacco, Philip Morris promptly moved their headquarters to Hong Kong and commenced a suit against the Australian Government for breaching its free trade agreement with that special economic zone of China by preventing a Hong Kong based company from freely selling its products into the country. http://theconversation.com/government-wins-first-battle-in-plain-packaging-war-8855
What on earth can we do?
In 1932 the Premier of NSW, Jack Lang, established the Lang Plan to address the impacts of the depression on the NSW economy. In part this plan included the reduction of interest payments to British based banks, which he said could be better spent on the poor of NSW. At the demand of the British Parliament, the Australian Government instructed him not to follow the plan upon which he withdrew all the state’s funds from the bank, using the NSW police to convey the money to the Trades Hall Council, triggering a financial crisis that brought down his government and led to many years of conservative rule in NSW.
Clearly, it is extremely difficult to withstand the forces of the global bankers.
A government the size of Australia, though, is big enough and has the strategic power to do it.
We must all lobby our local members of parliament to make sure that Australia maintains its proud bilateral history of standing up to the bullies of global capitalism and holds firm at the TPP.
Since the talks do not conclude until October, there is a reasonable chance that it will be an incoming conservative government who will conclude negotiations. We must secure their promise, now, that they will not cave on this critical issue.