TPP: Who's the real winner?
Update – 10 March 2016
You might have heard of the recent Phillip Morris tobacco plain packaging case. The company sued the Australian Government over the plain packaging legislation, using an investor-state dispute settlement (ISDS) clause in a bilateral investment treaty between Hong Kong and Australia.
The TPP also has ISDS in it, but this time there are 12 parties to the agreement including the US.
Some people have argued that the Phillip Morris case shows we have nothing to fear in the TPP, since Australia won the case. However, we won on a procedural issue, not on the substance of the case. And the reported cost to Australian taxpayers was around fifty million dollars.
How does TPP become law?
Section 51 of our Constitution provides the Government with the power to enter into treaties. This power is not dependent on Parliament.
However, treaties don't automatically become law once they've been signed. Generally, the substance of treaties needs to be incorporated into our domestic law through Parliament passing legislation. Parliament is granted the power to pass these laws in section 61 of the Constitution.
Once Parliament has passed the necessary implementing legislation, the Government can bring the treaty into effect. The Government does have the power to go ahead and ratify a treaty even if Parliament refuses to pass implementing legislation, but doing so would put Australia at risk of breaching obligations under the treaty - which could lead to sanctions.
This means that while the Government has the power to enter into treaties without Parliamentary approval, in practice if Parliament disapproves of the substance of a treaty it can refuse to pass implementing legislation unless the problems are resolved.
This is why CHOICE is asking Members of Parliament to oppose any TPP legislation until the risks associated with ISDS are dealt with. The Government has already opted out of ISDS with New Zealand. It should seek the same option with the rest of the TPP parties.
While this won't resolve all of the issues with the wide-ranging TPP, it will help reduce the risk of harm and safeguard our Parliament's ability to make laws that benefit Australians.
What else is in the TPP?
Prior to the release of the final TPP text, the intellectual property chapter was leaked. Intellectual property law covers a broad range of topics, including patients' access to affordable medicines, punishment for online piracy and the ways that consumers access online content.
These are complex issues, so CHOICE sought out some expert opinions on exactly what's in the bit of the TPP that we've seen. What we heard was mixed; some of the worst provisions included in earlier leaks are gone. However, what remains in the TPP is not without problems.
In some ways, the section relating to medicine is business as usual; it's the same as Australia's existing law. This makes the chapter sound harmless, but it will make future law reform more difficult.
- The takeout: fixing existing laws that favour pharmaceutical companies' rights over patients' will be much harder under the TPP.
For instance, the TPP promotes medical patent 'evergreening'. This means patent owners can push out the length of their patents beyond the original term, delaying the introduction of cheaper generic medicines. Australia's law already promotes evergreening, but the TPP makes it harder for us to change this. A provision in our domestic law can be changed relatively easily; when the same provision is included in an international treaty, it's a much more difficult proposition.
- The takeout: current long waits for cheaper generic drugs are locked in by the TPP.
Earlier versions of the TPP text showed that the United States was looking to boost a particular type of monopoly protection for some drugs up from the five years we currently have to 12 years. Following community outrage, this provision has been amended.
However, what's left is confusing. Australia can either bump up our existing five-year protection period to eight years, or keep the five years but also use "other measures" to promote effective monopolies for the full eight years. While Australian government officials have stated that this means no law changes are required, the expert we spoke to remains concerned about the impact the TPP could have on access to medicine. The TPP could still lead to delays in the listing of cheaper drugs on the PBS, costing substantial amounts of money.
- The takeout: potential delays in cheaper drugs being listed on the Pharmaceutical Benefit Scheme, costing the PBS money.
Similarly to the medicine provisions, the TPP locks in parts of our current copyright law. Copyright law in Australia has been subject to multiple reviews and could benefit from reforms designed to update the system for the digital era. Locking in old laws through an international trade agreement is a mistake.
- The takeout: it will be much harder to fix current, outdated laws that are not fit for the digital era.
The intellectual property chapter could also be subject to the still secret investor-state dispute settlement (ISDS) mechanism. This means that, for example, movie studios could sue the government arguing that our copyright laws are not in compliance with the TPP.
Attempts to introduce new consumer-focused laws, such the ability to bypass geoblocks, could be prevented by legal challenges from corporations. Consumers, on the other hand, are unable to use ISDS to ensure fair and equitable access to content. Australians have long been subject to the Australia Tax, finding that identical digital products are either more expensive here, or entirely unavailable.
Circumventing geoblocks is one way for consumers to seek access to more competitive markets. If the law was clarified to make it clear this behaviour is legal, it could be challenged under the TPP.
- The takeout: international movie studios could sue the Australian government over laws that help consumers defeat the Australia Tax.
The TPP appears to be an unbalanced agreement, weighted against consumer interests. In order for a full analysis to be conducted, the government needs to release the text and facilitate genuine, informed public debate.
CHOICE spoke with respected experts to get their take on the final intellectual property chapter of the Trans-Pacific Partnership. Get the full details here.