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Free Trade: Intellectual Property? « Previous | |Next »
August 4, 2004

I see that the ALP has decided to fight an election on his minor and largely symbolic changes to the US free trade deal. Mark Latham has declared that the Howard Government must accept a key amendment to protect the health system. If he did then the FTA would pass the Senate. However, the Coalition is rejecting Latham's call for a little amendment to the US free trade agreement (FTA) to protect the Pharmaceutical Benefits Scheme.

Is it clever politics? Well, the move keeps the ALP troops onside and pressures the Howard Government so that it is seen to be defending the big US drug companies trying to rort the little Aussie PBS.

Is this the much needed circuit breaker for the ALP? The point when the tide starts to flow back to the ALP? I doubt it. But then it depends on how the Canberra Press Gallery frames the politics.

Today we had lots of polemical froth and bubble around tactics and strategy that has turned into a Mexican standoff. Will the ALP stand firm? Do they have doubts already? Can they afford to be seen to crumble again?


The events inside the Canberra hothouse reinforce the feeling that the FTA is about politics, not economics or trade. The real trade and economic issues have been sidelined. It is about the politics of economic integration not the politics of free trade.

An example is the Intellectual Property (IP) obligations under the Free Trade Agreement, and the implications the US attempt to establish a strong IP regime for its owners has for Australia's IP regime. From what I can gather the US is using the Free Trade Agreement to improve its global intellectual protection. This approach to the value of intellectual property goes against competition policy and cheaper consumer goods.

It does not appear that a stronger IPR regime will generate economic benefits for Australia in the form of innovation and creativity, which in turn, increase productivity and economic growth.

Is there not a contradiction here? The purpose of a free trade agreement is to reduce government interference in trade across international borders. The purpose of making IP rights stronger is to interfer into the market for the benefit of the property right holders.

| Posted by Gary Sauer-Thompson at 3:40 PM | | Comments (6) | TrackBacks (2)

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I don't think it's 'clever politics'. On the contrary, I think it's surprisingly 'unclever politics' by Howard to hand this one to the ALP, which I trust will prove as opportunistic as ever. The ABJ Party should get a damaging backflip out of this as a minimum ... at best, the utterly unlikely scenario that Howard will keep the FTA open all the way to the election looms. Amazing political salve to a policy crock.

I was thinking more of the ALP slipping in the clever politics than Howard.

I was countering the Pryor cartoon of Howard calling the tune.

Like you I think that Howard has misjudged it. He is seen to misjudge the situation. That all important FTA (for the money makers) is being sacrificed for the sake of the Coaltion gaining an advantage over Latham.

I reckon that pressure will continue to mount on Howard to concede the amendment in the name of the national interest.

It is clever politics by Latham (not Conroy) that goes beyond the initial political showmanship of the initial 43 amendments of the 3 ALP senators to show that the ALP had not sold out.

The PBS is a button emotional button. It means cheap drugs for Aussies and stopping the US drug companies from gouging Aussie families. The ALP is protecting Aussie battlers from the bad side effects of the FTA medicine.

On the other hand, the ALP does not want to fight the election campaign on the FTA terrain.

Of course, none of this has much to do with good public policy.

I like this Spooner cartoon better:

I do think that the Pryor cartoon captured a moment that has passed.

This was one in which Howard had boxed the ALP into a corner. The ALP was facing political defeat over the FTA with the US with Latham looking like any other politician.

As Michael Costello points out the dilemma for Latham was this:

'If he voted no, he was anti-American. If he voted yes, he was weak and indecisive, giving way under intense pressure from Howard. And that is exactly what Howard and his Foreign Minister, Lord Downer, and that ever-reliable political thug Tony Abbott tried to do. They roared "visceral anti-Americanism". They shouted "weak, indecisive, flip-flopper".'

etc etc etc.

Latham turned the FTA debate away from the relations with the US and Latham's character into a proposal for legislation to keep drugs cheap in this country and protect us from the depredations of big American drug companies.

The political debate has shifted. Howard will give way as he cannot afford to be seen to be defending the predatory US drug companies and being opposed to cheap drugs for sick Australians.

Spooner's cartoon captures that moment of the shift.

Howards preoccupation with proving the worth of his special relationship with the US
may come back to haunt him, I don't think the average punter cared less about the FTA but voters will take notice if there is a chance of higher prices for medication.

I reckon you are right.

I wonder what the feedback on talk back radio has been like this week?

Running hot in favour of cheap medication for battling Aussie families I would imagine.

Does that mean a small blip in the polls for the ALP that keeps them off the ropes for a little longer, now that Latham looks neither weak nor anti-American?

Of course, none of that political manoeuvring really protects the PBS which the Americans see as an unfair trade practice.

They want to get rid of the price controls for brand name drugs in the name of free markets. Australians must pay for the R&D of the US drug companies and accept a free market system for drugs.

And the ALP is not concerned that any Australian legislation that tries to stop evergreening by the US drug companies can be challenged by the dispute settlement procedures. If Australia loses the US challenge, and refuses to change its domestic law that protects against evergreening, then the US has the right to retailiate with sanctions in any other area of our bilateral trade.

That is way in the future. All the ALP wants is the FTA swept off the political agenda by next week. The ALP just wants to get back into power. To hell with fixing the text of the FTA so that it works more in Australia's national interest.

The IP provisions (extension of copyright, patent protection etc) in the FTA are very damaging to Australia. In their effect they are a protectionist measure in the guise of monopoly rights.

Howard caved in whilst the ALP has failed to push for the IP provisions to be scrubbed clean.