While Australia and the US have reached agreement on the patent exclusivity term for biologics – the new drugs that have been one of the last sticking points on a TPP deal – this agreement has reportedly been rejected by both Chile and Peru, and it is this final impasse that has been holding up the unveiling of the final shape of the dairy deal reported in this column last Monday.
The Australian/US biologics deal is reportedly for an eight year term presumably sweetened for Australia by some movement on sugar access to the US, for which Australia has been pressing. The desperate rearguard attempts by the US dairy industry to prevent a US dairy market access carve-out for New Zealand have included this appeal.
Coming into the talks in Atlanta, the auto parts wrangle between the US and Japan one side and Canada and Mexico on the other was resolved in a fashion that perfectly illustrates how the final compromises in this kind of deal are reached: essentially by finding a face-saving recipe for the cave-ins that are actually occurring. Ultimately, Canada and Mexico blinked and have allowed Japan to (a) source the components for its auto industry from countries outside the TPP, yet while (b) still allowing the final product to enjoy the tariff free conditions that are supposedly reserved for TPP members. Because local content is calculated differently in Japan, what looks like a concession by the Japanese to Mexico/Canada sensibilities is still basically a victory for Tokyo. The Japan News news service explains:
According to the sources, the four countries also agreed to adopt a Japan-proposed rule to regard vehicles that use parts procured outside the economic zone as made in the zone if the key parts are made within a TPP country. Under the North American Free Trade Agreement, Canada and Mexico export vehicles to the U.S. tariff-free.
Fearing that vehicles and auto parts made by Japanese manufacturers in non-TPP countries such as Thailand will flood the U.S. and other markets, Canada and Mexico had been demanding a local content rate of 60 percent or higher, close to the 62.5 percent spelled out under NAFTA. Japan was seeking a level of around 40 percent……..Although a rate of 45 percent appears like it will be detrimental to Japan, it is expected to benefit from the rule because of the agreed change to the definition of what constitutes locally made products.
The dairy deal reported in this column last week was a decision made in principle (and containing considerable detail) in order to provide a carve-out for New Zealand. As this report from Atlanta by Canadian expert Peter Clark in Ipolitico indicates, the US has since struggled to deliver its end of the bargain:
Overnight Thursday and through Friday into the evening progress was being made on dairy trade liberalization — a.k.a buying off New Zealand. We will soon know how much that cost. Sources suggest that New Zealand remains unhappy, not surprising given New Zealand’s overly ambitious demands [ made in Maui] were not accepted. In Kiwi circles, there appears to be a feeling of betrayal by Washington.
It is believed that New Zealand Minister Tim Groser and Japan’s TPP Minister Amari do not get along and that Japan is not ready to antagonize its dairy farmers to bail out New Zealand from the effects of low prices and oversupply.
Groser may find the U.S. pantry is bare……Farm support policy changes have backfired. It seems that gross margin insurance doesn’t work as well as hoped when it replaced more predictable programs. This is a real problem for U.S. dairy farmers because Washington has always supported milk prices. Farm gate prices are rarely above cost of production. Dairy farmers are pressuring their senators, including Democrat presidential aspirant Bernie Sanders, for help.
The final shape of the dairy deal will not surface until and if Peru and Chile accept the biologics agreement hammered out between Australia and the US ; thereby allowing the intellectual property chapter to be closed. Reportedly, the US has already offered national trademark rights to Peru over the future marketing of pisco – a local brandy that Peru regards as its own, although Chile also claims a genuine variant. Chile and Peru have formed what Peter Clark has dubbed a “ coalition of the unwilling” bloc on the biologics issue, holding out for a five year term for these medicines. Chile already has FTAs with the main TPP countries, and therefore has less to gain from the TPP – so its holdout for a five year biologics term may well be what has blocked and delayed the final announcement.
Ultimately, if the final agreement does contain the eight year biologics patent term hammered out between the US and Australia, this will impose significant extra costs to New Zealand for the cutting edge medical treatments coming onto the market. If New Zealand has any hopes of maintaining a First World health system, it will have to recognise the extra costs that the TPP will impose on this country, and will need to fund Pharmac accordingly, in compensation. Otherwise, sick New Zealanders will in effect be subsidising the gains made elsewhere in the deal by dairy farmers. If and when a TPP deal is concluded today, the government will need to calculate not only the net benefit, but where the gains and losses from the deal will actually fall.
To date, the Key government has been unwilling to share any information about this TPP deal until it is too late for outraged public opinion to affect the outcome. Since the total information blackout on the TPP has been imposed mainly for the government’s political convenience, the disclosure process is likely to consist of a similarly skewed and careful exercise in spin.
The Mysterious Mary Margaret O’Hara
In Friday column and in the wake of the Taylor Swift/Ryan Adams détente over her 1989 album, I linked to another 1989 talent, Syd Straw. The late 1980s also saw the emergence of yet another unique performer : the brilliant Canadian singer /songwriter Mary Margaret O’Hara. In 1988 O’Hara released her first – and up to this point, only – album, the classic Miss America. On the Net there are a smattering of her live performances and soundtrack contributions. Here’s one of the best tracks from the 1988 album….
The video for her “Body’s In Trouble” song hints at her mesmeric presence on stage :
Her beautiful song “ Dark Dear Heart” was one that she sang at the funeral of the Canadian actor John Candy. There’s only one CD recording of it by her, as a guest appearance on an album by a Canadian group called The Henrys. This live rendition is simply stunning:
This late 1980s live performance on David Sanborn’s TV show is also pretty remarkable :