The Biological Drugs question in TPP

The major course over the arguments during the negotiations of TPP in the past few meetings has been about the Drug deals and Intellectual Property Rights in that capacity.

http://www.japantimes.co.jp/news/2015/10/04/business/tpp-talks-extended-for-24-hours-as-nations-try-to-reach-compromise-on-next-generation-drugs/#.VhHfH_lVikp

While the USA has argued that the TPP is beneficial to the drug makers if it offers them the access to the member countries along with monopoly for their drugs for at least 12 years to recuperate the expensive validation programs for approval, the others especially Australia and smaller countries like Malaysia  have argued that showering the companies with anything more then 5-7 years will be too harmful to the market.

The drug industry within these 12 countries alone stands at Billions of dollars every year, and the monopoly in this domain could have great profits for the companies at the cost of developing countries’ citizens.

In a sharp turn to its previous standings, the USA as it seems in the recent negotiations has decided to soften its stand in this question, coming down from 12 years to possibly 7 according to investigators and experts in the field.

Over the last few months the negotiations have escalated to an all time high especially due to the soon to start elections in some of the member countries. This has led to compromises from all directions and this is what, could either make or break the deal.

 

Will the deal reach a successful completion, especially considering that there have been extensions in the negotiations over the recent weeks?

Australia and New Zealand want USA to rush the TPP

Previously I had posted how the TPP was formed from just the original 4 members to the current 12 members and how USA has become a driving leader for the ongoing negotiations.

Andrew Robbs, the minister for trade and investment for Australia has urged them to help rush the proceedings so that Australia and New Zealand do not have to suffer from stalling at this point of the negotiations as per http://www.afr.com/news/politics/andrew-robb-demands-us-tear-down-barriers-or-no-tpp-deal-20151001-gjz0pm

Over the past few weeks, Australia has pushed for 87000 tonne sugar quota from the USA and some of the US congressmen have backed this deal, but the majority have concerns whether such high import values would be good for the US market?  New Zealand wants more from the dairy point of view, asking for increased imports from the others especially USA for their kiwi butter, cheese and milk powder citing dairy accounting for at least 30% of their GDP.

USA feels that allowing Australia to a further 87000 tonne limit would jeopardize the other countries like Mexico and their local manufacturers. The same goes for New Zealand’s demand considering that USA itself is a huge manufacturer of dairy products. The USA imports are worth more than $100 Billion in agricultural products as per http://www.abc.net.au/news/2015-04-10/what-hope-for-us-sugar-concessions-in-tpp/6383638

With each countries prioritizing their own demands and the fact that soon the elections for Canada followed by USA and Japan will be held, will there be a mutual agreement soon?

http://www.reuters.com/article/2015/08/04/us-australia-usa-sugar-idUSKCN0Q909W20150804

 

TPP and the E-Commerce

According to the USTR one of the points of concern while negotiating is also that of the billions of internet users. This is especially useful for the small scale businesses as the popularity and the free nature of the internet is something that will help them promote their businesses.

  • On the table are the negotiations that customs on digital products be removed completely
  • Promote and require that companies place infrastructure in each operational market rather than focusing on strategic ones that make more business sense
  • Promote competition and choices in the market space
  • Address key bottlenecks in public telecommunications
  • Give a common platform to share data including privacy data to tackle unsocial elements

However, some of the members have some concerns about the privacy data access stating that such a provision would lead to a severe damage to their privacy laws… But will the web security triumph over e-commerce or will the other member nations change their existing policies in regard to this?

Facts from the https://ustr.gov/sites/default/files/TPP-Detailed-Summary-of-US-Objectives.pdf and the https://www.fas.org/sgp/crs/row/R42694.pdf

TPP and benefits for Indiana

 

53% of the export trade Indiana trade does, is with the TPP members! Yes, more than half of Indiana exports are to only 11 countries, thus for Indiana this deal could prove to be very useful.

Some of the big companies based in Indiana as well as the prospective members of the deal include Pratt industries, Indiana Packers, Republic Steel among at least 273 other companies who are related to these companies.

Indiana already had FTA with 6 of the member countries and with the TPP will get a chance to tap 5 countries of Asia, some previously having import duty of as much as 24%

Thus TPP will have a great impact on the dynamically growing Indiana Economy as per the report http://tradebenefitsamerica.org/sites/default/files/studies/BRT_TPP_IN.pdf

Florida and TPP

Florida is a major exporter of clothing merchandise, shipping $60.5 Billion worth in the 2013 itself. Of this, 20% was to the TPP region. Moreover, this export business supports more than 200,000 jobs in Florida.

More importantly, more than 2/3rds of this exporter group were small to medium sized businesses. It is evident that for these businesses, the TPP will be the most beneficial one, as they won’t have to pay the exorbitant import duties on their products, which tend to have lower profit margins, and giving them the affordance of being able to enter some of the cost centric markets like Vietnam, Peru etc…

Data analysed from https://ustr.gov/tpp

TPP focuses on job creating investment according to the USTR

The USTR report finally gives some light on what the deal is about especially with a focus on investment in the following article: https://ustr.gov/sites/default/files/TPP-Detailed-Summary-of-US-Objectives.pdf

Following the age old premise that trade is usually what follows after the investment, the USA hopes that with increased investments, the returns will increase exponentially too. It also aims to focus on the investment that can not only focus on money but also on the working environments in the various domains within all the member countries.

  • It also aims to allow transfer of funds within the reach of the TPP with a control over the volatile capital flows
  • This will help in reducing a number of lawsuits that occur between the multinational companies and the local markets
  • It aims to focus on various labor laws, environmental pacts and other stakeholders

The major reason for inclusion is the fact that more than 5 million jobs in the USA which are linked with such companies or markets earn more than 33% than national average. Moreover, according to a report by the Office of International Investments, the USA stands to gain at least $173 Billion through FDI from the opening of the TPP access.

 

investments

Data as per http://ofii.org/sites/default/files/Unleash%20Global%20Investment%20In%20America_Executive%20Summary.pdf

Canada and its dairy industry finally on the table.

As part of the TPP negotiations, Canada has always kept the dairy industry on the bay.  The article “http://www.cbc.ca/news/politics/canada-election-2015-trans-pacific-partnership-dairy-1.3242234” explains this.

Canadians typically pay atleast 23% more than the others on  the negotiating table for consumption of the dairy products. More importantly the industry in Canada so far had discouraged imported products in this domain by issuing approximately 250% tariffs on imported dairy products. However as the deal approaches more serious talks, the pressure on Canada to open its industry to the other members has been mounting. USA, New Zealand and Australia are the major ones that would benefit. This is detailed in “http://www.theglobeandmail.com/report-on-business/rob-commentary/no-turning-back-for-canada-now-that-dairy-protection-is-finally-on-tpp-table/article25834661/

Comparing the two North American nations as per reports, opening of the dairy markets in the USA and Canada led to a fall in the local farms by more than 60%, but while the USA counterparts increased production for exports, the Canadian market continues to survive on the local consumption. Moreover with all of the other three countries having milking operations at least 3-5 times, the question the Canadian dairy farmers ponder over is how much of a decline in the sales are they looking at especially considering that some of the USA dairies are only a couple of hours drive from Canadian markets! Are they justified considering they would get access to 40% of the global trade?