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Canada Must Hold Firm in Opposing US Efforts to Expand Intellectual Property Rights

Our federal government seems hell-bent on signing as many new free trade and investment treaties as possible. We just completed one ‘in principle’ with the European Union (the Comprehensive Economic and Trade Agreement, or CETA); we finalized one with Honduras (not exactly a current bastion of democracy); and we have half a dozen more underway. As well, we are in the final throes of what is being mooted as the biggest trade treaty outside of the World Trade Organization: the Trans-Pacific Partnership Agreement (TPPA), involving 12 countries including the USA, Japan and Australia.

Health is usually seen as an externality in such treaty negotiations. It is generally assumed (though empirically contested) that increased trade between countries will improve peoples’ health—the security of which is regarded as a nation’s highest priority. Much depends on the pre-existing endowments and policy structures of trading nations. But many aspects of trade and investment treaties pose unnecessary health risks for all concerned, and should be avoided in trade agreements.

Canada must continue to hold firm in cooperation with many of the other TPPA negotiating countries in opposing US efforts to extend costly, unhealthy and consumer-unfriendly provisions in the IPR chapter.

One risk lies in extending patent protection for pharmaceuticals beyond the provisions that most of the world’s nations have already settled upon in the multilateral WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS) and the Declaration on the TRIPS Agreement and Public Health. The perennially stalled WTO negotiations have led to forum-shifting in a ‘spaghetti bowl’ of bilateral and regional treaties. The rub is that most of these new treaties are negotiated in highly guarded secrecy, making it difficult to know the details until it is too late to change them (unless, that is, one happens to be a US company, some 700 of which have been invited to advise that country’s trade negotiators on the 12-country undertaking of the TPPA).

Canada joined the TPPA party late in the game, and little was known of its negotiating stand—at least until the Wiki-leaked chapter on intellectual property rights (IPRs) was blasted around the internet on November 13 of this year. To some surprise, Canadian negotiators have been putting up a stiff resistance to US proposals that would significantly expand IPRs. The surprise is that Canada has already ceded to the European Union (through the CETA negotiations) extensions on data exclusivity for patented drugs. This will slow down the introduction of less expensive generic drugs after the patent has expired, and increase public health costs of drugs by between $850 million and $1.65 billion annually (for which a compensation transfer will be negotiated with provinces to cover the additional burden to their health ministries). The same provision is now being proposed by the USA in the TPPA, and is the only one to which Canada has not objected. Not so for many other negotiating countries, though, and Canada should support their opposition and not be complicit in having such damaging provisions on other countries.

But otherwise, Canada has been stalwart in opposing almost every other American effort to shore up the profits for its drug and chemical manufacturing industries. It has opposed granting drug patents without evidence of enhanced efficacy, or patents for diagnostic, therapeutic and surgical methods. (The American proposal for the latter was described as declaring as copyright any surgery not performed with bare hands.) We favour wording that would allow countries to exclude such processes from patents if they wish. Canada is also opposing a number of proposals that would give drug companies greater ability to ‘evergreen’ their patent products simply by adding a new chemical to the drug mix without specifying whether such a chemical added any therapeutic value. These and other American proposals would substantively increase costs of drugs in Canada and in every other country that ratifies the eventual TPPA.

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Canada and its negotiators warrant applause and political support for holding firm (at least so far). They could also do a bit more. One of the articles in the leaked IPR chapter refers to the hard-fought 2001 Declaration on the TRIPS Agreement and Public Health, in which developing countries clarified their rights to issue compulsory licenses for patent drugs when facing a public health emergency. At the time, developed countries with pharmaceutical transnationals tried to restrict this right to such notable infections as HIV/AIDS, tuberculosis and malaria. They lost, and the door was open for developing countries to issue compulsory licenses for drugs needed to intervene in the new global pandemics of chronic disease (e.g. cancer, heart disease and diabetes). This hasn’t been easy, with threatened trade challenges or economic pullouts by pharmaceutical companies emerging almost every time such a license is issued. But now, once again, the big three diseases (HIV/AIDS, tuberculosis and malaria) are given prominence in the TPPA, with no reference to the important 2001 agreement that every country “has the right to grant compulsory licences, the freedom to determine the grounds upon which such licences are granted” and “the right to determine what constitutes a national emergency or other circumstances of extreme urgency.” Canada would do well to insist on this language in the TPPA.

Canada should also oppose inclusion of IPRs in the definition of investment (the draft chapter of which has not yet been leaked). Defining IPRs as an investment would allow pharmaceutical companies to sue governments for compensation if they believed that a regulatory decision impeded their profit-taking. Canada already has a bad taste of this, with the current USD $500 million NAFTA case being brought by Eli Lilly against it for regulating a couple of drugs that scientific reviews and court decisions found had little therapeutic value. Tobacco transnational firms are using such investment treaties to oppose tobacco control policies; and it’s likely that costly and regulation-chilling claims will arise in efforts to control obesogenic food environments. This is another area where our negotiators could take a firm stand.

But of immediate concern: Canada must continue to hold firm in cooperation with many of the other TPPA negotiating countries in opposing US efforts to extend costly, unhealthy and consumer-unfriendly provisions in the IPR chapter.

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