Category Archives: Trade Agreements and ISDS

Trade Agreements, Treaties and Investor State Dispute Settlement

AFTINET Trans Pacific Partnership Forum – Video

Public Forum 18th November, NSW Parliament House, Sydney, speakers were

Dr Patricia Ranald, Australian Fair Trade and Investment Network, on Overview of the TPP and foreign investor rights to sue governments
Jon Edwards, Doctors without Borders (MSF)on medicines,
Professor Kimberlee Weatherall on copyright,
Tom Skladzien AMWU economist, on labour rights, temporary labour.

View the video here, external link Forum Video

Professor Weatherall’s comments, “An insufficient policy framework for the 21st century” are relevant to health, she notes that the TPP will make law reform harder.

A three year extension on patents for monopoly higher prices on biologic medicines before cheaper versions become available.

The Trans Pacific Partnership will provide additional monopoly rights for the costly biologic medicines used to treat cancer and other serious diseases.

Up to three extra years of monopoly for Australians and significantly more in some other countries.

External link AFTINET: Higher Prices for Medicines. Stronger Monopolies…

Trans Pacific Partnership – only 0.05% GDP increase after ten years BUT costs and risks are many and long term

Estimated National Benefit

The Australia Institute stated in November 2015:

“…Modelling commissioned by the Department of Foreign Affairs and Trade (DFAT) …. estimates these agreements will:

  •   Increase GDP by 0.05 per cent in 2035, or an additional $780 million per year in today’s dollars.
  •   Increase employment in 2035 by just 5,434 jobs.
  •   Increase the value of Australia’s trade by about three per cent ie Increase imports by 2.5 per cent, Increase exports by 0.5 per cent.

Other modelling finds slightly more, possibly 0.5% extra GDP after ten years or total 0.7% in 2030:
Sydney Morning Herald Economics Editor Ross Gittens concluded from various modelling, that after ten years, GDP will be 0.5% higher. New York’s Quartz news outlet quotes modelling to say Australia’s GDP increase will be 0.3% after ten years (US will be 0.2%). The World Bank finds total 0.7% more in 2030 (US total 0.4% more) (SMH Jan 2016).

These figures are consistent with various economists saying that the US and Australia have very open economies, hence little benefit.

The Peterson’s Institute in the US said “we dont calculate any increase in the number of people at work (in the US). But about one-half of 1 per cent of the US workforce will move from import-competing jobs (typically in manufacturing) to exporting jobs (typically in services)…”

Costs and Risks

The biggest risks are that

  • there is no end date on a trade agreement, just negotiated amendments and journalists have pointed out how little negotiating power Australia holds when negotiating with the US.
  • the agreement includes ISDS provisions

Details will emerge as the thousands of pages (originally written by multinationals) are analysed.

Inclusion of ISDS provisions are a major risk. Eminent economist Joseph Stigliz makes this point:
“if these provisions were in place when the lethal effects of asbestos were discovered, rather than shutting down manufacturers and forcing them to compensate those who had been harmed, under ISDS, governments would have had to pay the manufacturers not to kill their citizens.”

External link Trans-Pacific Partnership: we’re selling economic sovereignty for little return


Doctors Without Borders – Trans Pacific Partnership: a bad deal for medecine

“We need to keep prices low so our patients—and millions of others still waiting for treatment in the developing world—can get the medicines they need.

But right now the U.S. government is advocating for trade terms with eleven other Pacific Rim nations that could restrict access to generic medicines, making life-saving treatments unaffordable to millions.”

External link Help Us Fix the TPP provides more explanation, Video, Tweet your support, write to President Obama, Share on Facebook.

“Australia has a broader responsibility in these negotiations than simply improving Australia’s trade figures. Like it or not, The Australian Government’s success or otherwise in rejecting the aggressive demands of the brand name pharmaceutical lobby will affect the future health outcomes of millions of vulnerable people across the region. For the sake our patients and those like them we urge Australia to stand strong,” said Médecins Sans Frontières  Australia spokesperson Jon Edwards 25th Sept 2015.

Explanation of ISDS, who refused/accepted ISDS and problems it creates

Governments around the world enter into Free Trade Agreements to reduce tariffs and and expand global trade.

But trade agreements can and often do suit the interests of global corporations at the expense of people’s rights and the environment.  When present, Investor State Dispute Settlement  (ISDS) conditions increase rights for foreign investors and reduce rights for governments to regulate in the public interest.

Prime Minister John Howard refused to accept ISDS in the free trade agreement with the US and as a result Australia has avoided major issues that the US continues to suffer when dealing with other signatories, internal link,  US Dolphin safe tuna labeling ruled a violation of the rights of Mexican fishers. Country of Origin labeling for beef and pork ruled a barrier to trade, US ordered to pay $1 billion per year.

“ISDS is a flawed system that allows a single foreign investor to sue a government over regulations which can be in the public interest and even if its unsuccessful, governments pay a very high price.

Its not really a legal system that has the safeguards that national systems have because there is no independent judiciary, lacks transparency and doesn’t properly consider public interest issues.”  Dr Patricia Ranald, convenor of AFTINET speaking at an NGO conference in Singapore.  External link with video: Dr Ranald Explains ISDS in Australia

Governments after PM John Howard continued to refuse ISDS conditions in trade agreements until PM Tony Abbott reversed the policy and quickly signed a succession of agreements containing ISDS.  PM Malcolm Turnbull continues with Tony Abbott’s policy unchanged.