TPP Miscellaneous: Corporate dominance in the US (Workshop by Sanya Reid Smith)

In this article, we answer a question from the public: “Why is the US pushing to protect the private sector?” In sum, the US government answers to their campaign financiers, and they also respond to their cleared advisor committees within the TPPA negotiations, composed mostly of multinational company representatives. Lastly, we learn that the Americans are not united in their opinions on some provisions of the TPP either. Where there are winners, there will be losers – even within the US itself.

This series is brought to you by based on a recent NGO briefing on the Trans-Pacific Partnership (TPP) in Malaysia by Ms Sanya Reid Smith, an expert on Trade and Investment Rules. She has been monitoring the Trans-Pacific Partnership Agreement (TPPA) since 2011, and is also the resource expert for Bantah TPPA Malaysia. The entire talk is uploaded on YouTube in a seven part series and can be accessed here; this article is drawn mainly from Part 7 of the talk. The index of the series is attached at the end of the article.

Video starts from 7:21

(Question from the public: “Moral question. Why is the US pushing to protect the private sector?”)

Campaign financing in the US ensures corporate interests

There are a lot of answers to this question. (laughs) In the US, they have campaign financing, right? Their presidential campaigns cost how many billions of dollars in advertising. They get that money from donations from companies. If the companies give the donations, they expect something in return. They want the policies. So, for example, Big Pharma, the patent owning medicine companies, they donate to both sides; tobacco companies, donate to everybody. And then, when they are elected, they want their money’s worth, right? That’s number one, the money. Next year, the US politicians want to get the donations from the same companies, so they’d better do what they want.

MNCs dominate the cleared advisor committee

The second thing is, the US has system of what we call ‘cleared advisors’. They are about 800 people who can see the negotiating text during the negotiations and give comments about what they want in it etc. And, I think, almost all of them are multinational companies. On the labour committee they have trade unions lah, but not on the other committees. On the medicines committee, they have one generic company and I think one public health group, the rest are Big Pharma, the patent owners. So the generic companies/health advocates are always voted down. So those guys are the ones who give advice to the US Government.

And you can see how influential they are in another report that the US Government puts out every year called ‘Special 301′, and this is about how much the US government’ doesn’t like other countries’ intellectual property standards. So, even when countries are already complying with what the World Trade Organization (WTO) requires, the US says ‘this is not enough, I want you to give more. More protection for my medicines and so on, my Hollywood movies…’ So every year they put out a report: how such countries are not doing the extra that the US wants them to do. And you see that, in the US, they have a process: the Big Pharma, the patent owning pharmaceutical companies, they give a submission for this report.

Every year some university law professors in the US perform an academic exercise, looking at what the demands were of the pharmaceutical companies, and how close the US Government’s Special 301 report is to their demands. And depending on the year, 90 to 95% of what the pharmaceutical companies demanded is what is the US government’s position becomes! It’s almost an exact copy.

Video starts at 13:10

NGO had to sue to get into cleared advisor committee

The other part of the story is that, the public health NGOs, representing the patients, they sued the US government to get themselves onto the cleared advisor committee, and they got one spot, out of what, twenty people on the committee? So that when they come to vote, Big Pharma always votes for longer intellectual property, stronger intellectual property, and the NGO got voted down. But they had to sue their own government, even to get one person on, plus one generic company, the rest are Big Pharma. Certainly no human rights groups or anything, no human rights committee…

Video starts at 9:28

Americans are also split in opinion

But the funny thing is that within the US, there is a split. So the US has both Big Pharma, the patent owning pharmaceutical companies, and also a generic industry. But they only choose to listen to Big Pharma, they don’t listen to the generic companies, who are being screwed over by their own government.

And this plays out in different ways, like the US car companies, which manufacture cars – Ford and GM and whoever. They have to pay the health insurance in the US. When medicine prices are high, the have to pay more for the health insurance for their workers, so they actually don’t like the medicine companies getting longer patents, more patents, more monopolies. And so they fight with the medicine companies and say, ‘We don’t want you to get these longer patents’, because, I think they told me, it’s like 1000 or 1500 US dollars extra cost per car in paying the health insurance. Which means, they are not competitive with the Japanese cars and so on, and they lose business.

Even Obama’s White House cannot afford biologics’ exclusivity

So there is a split within the US. There are US patients who need medicines. It is also unaffordable for US patients. So the American Association of Retired Persons (AARP) which is very famous in the US, it is a very big powerful NGO of retired people – they came out against their own government’s proposal in the TPP of biologics’ exclusivity, saying even 8 years of exclusivity is too long, because in the USA the current law is a twelve-year monopoly on these biologic medicines, even when they’re not patented and this is causing problems for access to affordable medicines.

Obama’s White House budget says every year, ‘We cannot afford our current 12 year biologic exclusivity monopoly, we want it to go down to seven years.’ But they can’t get it through their Congress, because their Congress is paid for by Big Pharma, so they go for the longer monopoly. So even the Obama White House cannot afford it. The executive branch cannot afford their own twelve-year monopoly and want to bring it down to seven. So they didn’t want to lock it into more than seven years in the TPP, or they could never make it come down.

The US State Parliaments don’t want ISDS

The other funny one is, the US state parliaments, the 50 states in the US, each has their own parliament. Every two years they pass a resolution saying, ‘No Investor-to-State Dispute Settlement in US free trade agreements because we want to regulate.’ Because even though the US government has never lost, they often challenge state government laws, for example California has tough environmental laws, which are often challenged. And so, even though they’ve never lost, every year the US state parliaments say, ‘We don’t want ISDS, please don’t put ISDS in.’ And yet the US Trade Ministry keeps negotiating ISDS in agreements like the TPP.

So who does the US Government listen to? it’s a mixed bag. It’s not their own state parliaments, it’s not the generic industry, it’s not their patients. It’s not the car companies on medicines. They listen to the car companies about tariffs and about currency, but they don’t listen to them on medicine. So it’s a bit of a mixture, who they listen to. And a lot of it is from the campaign financing for the presidential and other US elections.

Index of the Series

This series contains 20 articles on the TPP, and can be read in any order:

Transcriptions are kept chiefly ad verbatim, with some minor edits for readability. The text has also been checked by Ms Smith for accuracy.

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