While rapid change is always possible in trade talks as they approach the deadline, lets assume that the offers on the table for dairy at the TPP talks in Maui won’t improve much beyond the “appallingly bad” level currently being lamented by New Zealand dairy industry participants. What is Plan B now for New Zealand? As tactical partners to date, New Zealand and Australia have found some common ground in stalling on the patent terms for medicines, particularly in the expensive, cutting edge realm of “biologics” treatments.
New Zealand has been stalling on the medicines and IP provisions in general, to try and prise that better deal on dairy from Japan, the US and Canada – while Australia has taken the same obstructive line in order to leverage better access for its sugar exports to the US domestic market. Dream on. One of the features of this allegedly “free” trade deal is that the US has decreed that its protectionist wall for sugar is not open to negotiation, and don’t even think of asking the US to reduce its enormous farm production subsidies. And then there’s the Jones Act which has given blanket protection to the US shipbuilding and maritime industry for the past 95 years. You get the picture: from the US point of view, removing trade barriers is something for other countries to do, for its corporate benefit.
In this current game of chicken, the NZ/Australia position on medicines and IP now has to put up or shut up. The only way that the position on dairy – or sugar – will improve now depends on the readiness of the Transtasman allies to hold progress on the wider TPP deal to ransom. Of late though, Trade Minister Tim Groser has been missing in action, when it comes to making any public statements. Surely, a bit of public pressure is called for. Shouldn’t Groser be complaining about the dairy offers tabled to date? Its called leadership. This is not a time for sulking in your tent.
Here at home, the attempts in Parliament to get any answers on likely costs – say, to Pharmac’s drugs budget – have run into a predictable stonewall from the Key government: ie. the deal hasn’t been concluded yet, so we can’t say a thing. Right now, it might be more useful to know which team in which agency of government is keeping a running tab on the net benefits to New Zealand of the various offers in train, and how these benefits are being calculated. Presumably, trade-offs can only be signed off if and when we know the net benefits of say, conceding X hundreds of millions on added drug costs as opposed to Y benefits from enhanced dairy access. At the moment, who is doing those numbers – and given the bad offer on dairy, are we currently in the red or in the black?
In the interim, it has been striking to see the gaps in perception between New Zealand – which looks in the mirror and sees itself as being an honest free trader in dairy – and the way that others see us. Who for instance, do you think Canada’s Trade Minister Ed Fast is talking about here when he says this:
Mr. Fast said Canada wants to see constraints on government-owned companies and sovereign wealth funds so they can’t use their power to tread on private firms or pursue other ends. “We want to make sure that state-owned companies that could act in a manner that is contrary to free-market principles are subject to disciplines that ensure they don’t compete unfairly with companies that are operating within a free market.”
Sure, it could be SOEs in general. Yet Fast could just as easily be talking about Canadian dairy farmers being asked to compete without tariff protection against Fonterra – which is widely seen offshore as a state-supported near monopoly whose structure (as trade analyst Peter Clark has pointed out) wouldn’t survive challenge for five minutes under North American or European anti-trust rules and competition law. (Similarly, Pharmac is seen by many offshore as a drug purchasing body whose powers are not consistent with free trade principles, either.)
In saying that I’m not denigrating the achievements of either Fonterra or Pharmac – but merely pointing out that virtue in these negotiations is in the eye of the perceiver, and that those perceptions do carry political weight, especially since any concessions will finally have to be rationalised to the people on the receiving end. Should family farms in Canada really be sacrificed to the needs of a foreign, state-supported dairy juggernaut – whether that be Fonterra, or US dairy farmers buoyed by production subsidies from the Obama administration? I think I can see why Ed Fast may be thinking twice about his ability to sell that one, on the eve of an election.
So what is Plan B for New Zealand if dairy won’t fly? Sure it can always tot up the scraps it is getting – a bit of dairy here, a bit of beef there – and try to declare victory. Yet as things stand, New Zealand is looking down the barrel of major costs on drug patent term extensions under the TPP. As Australian health academic and trade analyst Dr Deborah Gleeson pointed out on RNZ this morning, Australia has already had to soak up those patent term costs under prior trade deals with the US. And, according to a study last year cited by Gleeson, even only a five year patent extension for existing drugs has imposed extra costs to the Australian taxpayer of $240 million in the short term. and $480 million in the longer term.
So… if New Zealand agrees to the medicines/IP provisions on the table at the TPP it will face a potential double whammy – major extra costs for both (a) patent term extensions to existing drugs and (b) for the new, cutting edge biologics treatments, which the Australians are trying to maintain a five year patent term, while the US is holding out for seven or eight years. Again… you’d have to think that surely someone at Pharmac has already calculated what a three (or five) year extension of the patents for those items on its existing drug schedule would cost. Maybe we’ll be lucky and generics will still rule. But maybe we won’t.
So far, I haven’t even mentioned the TPP provisions for investor-state dispute settlements. (I’ll talk about ISDS provisions in a future column.) Ultimately though, Plan B surely has to involve a readiness to walk away from this deal. It wouldn’t involve a major reality shift, either – given that this particular cave of dreams never did have much of substance to offer us. Way back in 2010, New Zealand’s chief TPP negotiator Mark Sinclair had said exactly that, in a cable printed by Wikileaks:
New Zealand’s own chief negotiator Mark Sinclair conceded to US officials there was little in a TPP Agreement for New Zealand. The only real “pay-off” was a remote long-term prospect to “put the squeeze” on Japan and Korea to stop protecting their agricultural markets.
Sinclair reportedly pointed to “a public perception that getting into the US will be an ‘El Dorado’ for New Zealand’s commercial sector. However, the reality is different.’”
Well, it has taken five years – and a lot of frequent flyer points and hotel bills – for Tim Groser to prove that Mark Sinclair was right all along. The TPP dreamtime is over. So let’s either cut our losses and leave, or stay and pull the whole thing down around the ears of the Americans, who crashed our little P-4 party. And ruined it.
James Brown on the radio
Good to hear RNZ offering with a long James Brown segment last Tuesday afternoon…Too bad though, that host Jesse Mulligan didn’t make full use of the occasion to try and resolve the get on up/get on down controversy.
Unfortunately, in the year 2015, Brown’s exhortations to get on the good foot are pretty hard to distinguish – as Mulligan conceded at one point – from the legions of JB imitators and parodists that have come in his wake. That’s not to deny Brown’s place in music history, or his place in the memory banks of the fans that Mulligan brought to the mic, but I’d argue that these days….Brown’s late 50s, early 60s ballad singing can sound a lot more idiosyncratically soulful than his rhythm workouts.
Deep soul owed its origins to what James Brown and Bobby Bland were doing to the ballads songbook. On something like “Lost Someone” for instance, JB’s delivery makes the rote sentiments come nakedly alive: “Gee whiz, I love you, I’m so weak…Come on home to me…” As a song of unmanned need, it still sounds pretty compelling, 50 years on. (That’s besides it being an early blueprint for his 1965 smash hit “Its a Man’s, Man’s World.” )
Even a 1931 chestnut like “Prisoner of Love” – previously associated with the crooning likes of Russ Columbo and Perry Como – had a new and tortured grace bestowed on it. Like Bobby Bland, Brown could bring emotional despair right into the room, and make it sound therapeutic. (In the 1970s, Candi Staton”s “I’m Just a Prisoner” offered a great update of those same trapped-by-love sentiments.)