RCEP: the trade agreement you’ve never heard of but should be concerned about

Source: The Conversation

8 June 2015

If the proposals are agreed, they could delay the market entry of generic medicines in the region – and the impact will be felt around the world. Jeng_Niamwhan

You’ve probably heard of the controversial and secret Trans Pacific Partnership Agreement (TPP) negotiations, which have generated concerns in many quarters.

Nobel Prize-winning economist Joseph Stiglitz has highlightedserious risks the agreement may reduce access to medicines and health care. United States Senator Elizabeth Warren has rebuked the inclusion of dispute clauses that would enable corporations to sue governments if their policies negatively affected profits. And several Australian parliamentarians have raised concerns at the lack of transparency surrounding the negotiations.

Meanwhile, negotiations for another trade agreement, equally shrouded in secrecy, are raising alarm among health and humanitarian organisations.

Obscurely named the Regional Comprehensive Economic Partnership (RCEP), this agreement encompasses ASEAN (Association of Southeast Asian Nations) members and their trading partners: Australia, Brunei, Cambodia, China, India, Indonesia, Laos, Malaysia, Myanmar, New Zealand, Japan, the Philippines, Singapore, South Korea, Thailand, and Vietnam. The United States is notably absent.

Seven rounds of negotiations have already taken place with virtually no public debate. The next round of negotiations begins today in Kyoto, Japan.

The RCEP emerged in the context of China’s exclusion from the TPP. RCEP recognises “ASEAN centrality” in the region and aims to strengthen economic cooperation among participating countries.

Like other recent bilateral and regional trade agreements, the RCEP’s scope is broad, going beyond trade in goods and services to investment, economic and technical cooperation, intellectual property (IP), competition, dispute settlement and other issues related to government regulation.

RCEP recognises ‘ASEAN centrality’ in the region. OPgrapher/Shutterstock

In contrast to the TPP, RCEP was expected to be more favourable to low and middle-income countries in the region – with fewer demands for regulatory harmonisation and slower reductions in trade barriers, particularly for least developed countries.

But recent leaks of negotiating texts proposed by Japan and South Korea for an IP chapter raise serious concerns for access to medicines across the globe.

In February, a leaked Japanese text (dated October 2014) proposed monopoly protections beyond both the obligations of existing IP agreements and IP laws of many RCEP countries. Particularly controversial are provisions that:

  • broaden and lengthen patent monopolies
  • extend restrictions on the use of clinical trial data to support the marketing approval of generic medicines
  • enable the seizure of generic medicines in transit, even those only suspected of infringing IP laws in the transit country.

On June 3, a leaked South Korean IP proposal revealed several provisions that would award additional privileges to the pharmaceutical industry. These include patent term extensions, the seizure of suspected IP infringing medicines in “trans-shipment” and, equally worrying, damages for patent infringements determined according to the value asserted by the patent owner.

If these proposals are agreed, they could delay the market entry of generic medicines in the region – and the impact will be felt around the world.

India and China are major suppliers of generic medicines for the world’s poor. The role of Indian generic firms in substantively lowering the price of HIV medicines is well known. Indian firms continue to supply the majority of these for low and middle-income countries. This has been possible because India’s intellectual property laws balance private rights with the public interest.

India, for example, does not grant patents for new forms or new uses of a known substance. This has prevented unnecessary extensions of patent monopolies on some cancer drugs – a move praised by health advocacy groups such as Médecins Sans Frontières‎ as a major victory for access to affordable medicines. These safeguards would be lost if India and RCEP countries agree to Japan’s proposal.

India IP laws safeguard access to affordable medicines. Trinity Care Foundation/Flickr, CC BY-NC-ND

It’s also crucial that other low and middle-income countries such as Thailand and the Philippines do not agree to these types of provisions. Despite their key roles as generics suppliers, the UN Conference on Trade and Development has suggested that large Indian generic firms are looking to wealthier markets, which could ultimately put at risk supplies of cheap generics to poorer countries such as these.

While Australia introduced several of the proposed measures some years ago, a 2013 independent Pharmaceutical Patents Review concluded that Australia should reduce the length of patent term extensions. Clearly it would be wise for Australia to reject any measures that could preclude much-needed IP reform in future.

It’s not in Australia’s interest to support the inclusion of these IP measures in the RCEP, but we don’t have a good track recording protecting the public interest amidst pressure from corporate actors and powerful states. It’s therefore important the treaty text be released before being endorsed by Cabinet, to give sufficient time for independent assessment before it’s ratified.

Last week, a group of UN experts raised serious concerns over the detrimental impact trade agreements can have on human rights, recommending that trade and investment agreement negotiations be conducted transparently, with active consultation with labour unions, consumer organisations, environmental protection groups and health professionals. This is vitally important in the context of the RCEP negotiations if we are to preserve access to affordable medicines across the globe.

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