The TTIP of the iceberg
The Trans-Atlantic Trade and Investment Partnership (TTIP) is currently being negotiated in secret between the United States and the European Union. Both sides account for nearly half of global GDP, approximately 30% of global exports, and have investments of over $3.7 trillion in each other’s economies. If concluded, the TTIP is set to be the largest FTA in history. Both sides are seeking to increase transatlantic market access, enhance regulatory cooperation on a range of issues, and address challenges associated with emerging markets. The US and the EU have held seven rounds of TTIP negotiations thus far, with the seventh round concluded on 3 October, 2014.
Peter Van Ham attributes the resurgence of transatlanticism to the decline of Western ideological dominance as part of the changing global balance of power. He explains that in the face of emerging economies, the TTIP offers the US and the EU an opportunity to defend their shared interests from a position of strength and rewrite global trade rules in their favor. Regulatory harmonization across the Atlantic is designed to strengthen the collective US-EU position and prevent standard-setting power from being lost to China. Marc Venhaus agrees that the TTIP provides the US and the EU with a first mover advantage — a means of establishing new rules and norms based on shared economic interests that, due to the deadlocked Doha Development Round, could no longer be realized within the framework of the WTO.
The TTIP, if concluded, would entrench a system of global trade that places the EU and the US under one common umbrella, leaving emerging powers standing at the rain-soaked periphery, still largely dependent on Western demand. Venhaus explains that the TTIP is an attempt to alter geo-economic dynamics by reinstating the US and the EU at the helm of a global trading system they once dominated.
Developed nations such as the US have increasingly abandoned multilateralism in favour of bilateral FTAs which are generally more effective in extracting concessions from emerging powers. This shift adversely affects access to medicines as developing countries agree to unreasonably high levels of IP protection as part of trade negotiations characterized by unequal bargaining power. As patent protection expands, generic competition is delayed, reducing the affordability and accessibility of medicines. As the TTIP is negotiated solely between the US and the EU, its impact on access to medicines in developing countries is not easily discernible — but herein lies its greatest threat. As public attention focuses on the leaked text of the agreement and its ramifications for US and EU citizens, little attention is paid to the long-term consequences of US-EU cooperation on intellectual property norms. The development of global rules and standards on intellectual property rights as part of the TTIP may set a dangerous precedent for Western expectations in future free trade agreements with developing countries. US-EU regulatory harmonization threatens to lock in regulations which prioritize pharmaceutical profits at the expense of affordable healthcare, setting new global standards that will later be imposed on developing countries.
Faisal Chaudhry explains that the relative parity between the US and the EU makes careful scrutiny of the TTIP all the more necessary, as discussion between equals is a more effective channel for pushing TRIPS-plus standards and thereby normalizing rules that reduce access to medicines. The US and the EU’s mutual agenda to promote a high level of intellectual property protection and resolve any areas of regulatory divergence can only produce provisions which enhance, rather than reduce, patent protection. This may occur in the form of extended patent terms, an expanded scope of patentability, stricter data exclusivity rules, patent linkage and greater restrictions on pre-grant opposition procedures.
Alarmingly, the TTIP is also set to contain an Investor-State Dispute Settlement (ISDS) provision which would allow US pharmaceutical companies to sue EU Member States for government measures that promote access to medicines but negatively affect future earnings on pharmaceutical IP or similar EU investments. Lawsuits could be brought against public health measures such as price controls, reimbursement and therapeutic formulary decisions, marketing approvals, pharmacovigiliance decisions and stronger patentability standards. The fear of foreign litigation would severely compromise the willingness of Member States to utilize TRIPS flexibilities such as patent reform and compulsory licensing, thereby eroding the public health policy space painstakingly carved out by TRIPS. The absence of such flexibilities would further delay the onset of generic competition, reducing the affordability and availability of medicines in Europe.
The TTIP, like its trans-Pacific counterpart the TPP, is still being written — and we need to seize the pen. While negotiations continue, greater publicity should occur to expose the potential adverse effects of these agreements on access to medicines. The US and EU governments should be actively lobbied to commit to the following goals:
- TRIPS-plus provisions should be removed from the text of the TTIP to prevent the creation of an unreasonable global standard for intellectual property protection that may be applied to future trade agreements with developing countries.
- The US and the EU should actively encourage the use of TRIPS flexibilities by national governments and refrain from including ISDS in the text of the TTIP.
- The US and the EU should ensure that their trade policies do not undermine the human right to health and access to medicines. The TTIP must not be used to create higher norms for intellectual property rights in a non-transparent, non-representative manner.
- More research should be conducted on new business models for incentivizing pharmaceutical R&D which do not involve rewarding research with monopolies. Instead, innovative models which encourage innovation while simultaneously expanding access to affordable medicines should be promoted.
- Free trade agreements such as the TTIP should incorporate by reference the Doha Declaration on TRIPS, reflecting the commitment made by WTO members to promote access to medicines for all.
This article is written by Katrina Geddes, a right to health advocate from Boston.
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