TPP is dead, but its legacy lives on
The Trans-Pacific Partnership was dead long before Donald Trump signed his executive order. But its damaging aspects, like stringent IP provisions, have just migrated to other agreements.
Issue: TPP’s damaging provisions with respect to access to medicines
What is TPP?
Twelve countries that border the Pacific Ocean signed up to the TPP in February 2016, representing roughly 40% of the world’s economic output.
- Aim: The pact aimed to deepen economic ties between these nations, slashing tariffs and fostering trade to boost growth. Members had also hoped to foster a closer relationship on economic policies and regulation
- The agreement was designed so that it could eventually create a new single market, something like that of the EU
- But all 12 nations needed to ratify it, before it could come into effect
- Member states: Japan ,Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.
- Abandoning TPP was a key element of the election campaign of the new US president elect Donald Trump & as soon as he entered office, US pulled out of TPP
How big a deal was TPP?
Pretty big. The 12 countries involved have a collective population of about 800 million – almost double that of the European Union’s single market. The 12-nation would-be bloc is already responsible for 40% of world trade.
- The deal was seen as a remarkable achievement given the very different approaches and standards within the member countries, including environmental protection, workers’ rights and regulatory coherence not to mention the special protections that some countries have for certain industries
Without the US does TPP definitely fail?
To take effect, the deal would have had to be ratified by February 2018 by at least six countries that account for 85% of the group’s economic output. The US would need to be on board to meet that last condition.
- Some countries, including New Zealand, have suggested some sort of alternative deal may be possible without the US.
- But Japan’s Prime Minister Shinzo Abe has said a TPP without the US – and its market of 250 million consumers – would be “meaningless”
Is this the same thing as TTIP?
No. The Transatlantic Trade and Investment Partnership, now generally known as TTIP, is a deal to cut tariffs and regulatory barriers to trade between the US and member states of the EU. Negotiations here are at an earlier stage. But given President Trump’s hostility towards trade deals in general it’s unlikely to be plain sailing for that one either.
TPP’s damaging provisions: IPR
The agreement’s damaging ambitions were most evident in the proposed provisions concerning intellectual property
- Explicit provision for Biologics: The TPP provided explicit protections for ‘biologics’ (drugs manufactured in a living organism, rather than through chemical synthesis), the first trade agreement to do so
- Extended data exclusivity: The agreement mandated the protection of clinical test data submitted for marketing approvals, with pharmaceutical data obtaining five to eight years of protection. This provision, called ‘data exclusivity’ or ‘marketing exclusivity’, prevents a generic company from relying on the clinical test results of the originator in order to prove the efficacy of its drug
- Argument given: It was justified using the argument that clinical trials are the most expensive part of drug development and hence there is a necessity to provide drug developers the ability to limit access to that data so as to incentivise research
- Weaker patent standards: Such standards would allow a greater number of secondary or ever-greening patents on pharmaceuticals
- Harsher intellectual property enforcement
The Legacy of TPP
Although US has pulled out of TPP, but the lines along which it was being negotiated reflects poorly on the US trade policy vis-à-vis public health and Intellectual property (IP). TPP can have further damaging impacts,
- Impact on other agreements: The potentially damaging provisions of TPP can migrate to other global agreements like RCEP. Countries involved in RCEP are now trying to conclude the talks as soon as possible. RCEP includes several of IP provisions included in TPP. This should be of great concern for access to medicines globally, as countries involved in the RCEP negotiations include key generic drug-producing countries, including India
- Pressure on India’s patent regime likely to continue: U.S. withdrawal from the TPP may change the U.S.’s approach to trade and intellectual property more in form than in substance, by switching from trade agreements that include several countries to bilateral free trade agreements (FTAs). In this process, the U.S. is more than likely to continue its vigorous campaign against perceived “violators” of U.S. intellectual property. The pressure exerted by the Obama administration on the public health safeguards in Indian patent law over the past eight years are likely to continue, if not worsen.
- Subversive US Trade Policy to continue: Despite the public health impact of the TPP’s provisions, it is unlikely that these concerns will guide U.S. trade or foreign policy. President Trump’s remarks in early January emphasized his desire to end “global freeloading” stating that “foreign price controls reduce the resources of American drug companies to finance drug and R&D innovation… our trade policy will prioritize that foreign countries pay their fair share for U.S.-manufactured drugs, so our drug companies have greater financial resources to accelerate development of new cures.”
in the light of ever increasing efforts of the developed world to limit the access to medicines, India needs a far greater government commitment to the use of the public health safeguards in the indigenous patent law to survive this era and ensure the health of the country’s citizens