Article by Jo Moir and Laura McQuillan,
New Zealanders will not face increased medicine costs as a
result of the Trans-Pacific Partnership deal.
Australian officials took an ANZAC approach to patent
protections on biologics over the last three days and dug their
heels in on the issue on behalf of Australians and Kiwis.
This single-handedly stalled the TPPA deal while also giving
Trade Minister Tim Groser more time to strike a better deal over
New Zealand and Australia won't have to change any existing
policy settings on biologics as a result of the agreement and that
has created some negative feedback from American pharmaceutical
"This will complicate the Americans' job of selling it to their
people. We pushed back and got a result that's as good as we could
have possibly expected," Groser said.
"Now our American friends have got a problem but I don't think
Groser said Kiwis will not pay any more for medicine as a result
of the TPPA and the "cost of the subsidy bill will not go up [by]
any large extent".
It will cost roughly $4.5 million in the first year to set up
the software to provide the additional information that negotiating
After that operating costs will be about $2.5m a year - a "tiny
rounding error" on what is a large health budget, he said.
Prime Minister John Key welcomed news of the deal, saying it
would give Kiwi exporters much better access to a market of more
than 800 million people with expected financial benefits of at
least NZ$2.7 billion a year by 2030.
"As a country, we won't
get rich selling things to ourselves. Instead, we need to sell more
of our products and services to customers around the world, and TPP
helps makes that happen."
Key acknowledged disappointment with the lack of gains on dairy
tariffs, but said the agreement was "overall a very good deal for
Economic Development Minister Steven Joyce described the deal as
a "big win for regional New Zealand", with areas such as the Bay of
Plenty, Hawke's Bay, Manawatu and Whanganui set to benefit from the
removal of tariffs.
"It's not everything we wanted in dairy by any manner of means,
but you can't ignore these other industries.
"The meat industry, the fruit industry, the wine industry, the
forestry industry, the manufacturing industry - all of these get
the benefits," Joyce told TV3's Paul Henry.
Fonterra was "very disappointed" by limited gains for dairy in
the TPPA, with the Government admitting it was "too difficult" to
lift all tariffs in the newly-agreed trade deal.
Several countries had refused to remove all blocks to free trade
for New Zealand's dairy and beef exports, under the deal finalised
in Atlanta overnight.
"I'd never be satisfied with anything less than total
liberation, even if it took forever and a day," Groser said.
"All I can say is it's the best we could get against the massive
resistance we met from the four giants of Mexico, Canada, the US
"It will take us forward on dairy absolutely, but in the most
sensitive areas, only a little bit at this point."
Fonterra's chairman John Wilson said the deal was "far from
perfect" and "failed to reach its potential" for the dairy
industry, due to a pushback from farmers in other member
But regardless, he said the TPPA was a small but significant
step forward for the sector.
Groser said the dairy deal was a "long game" that would
eventually lead to elimination of tariffs on cheese exported to
Japan and elimination of one part of cheese tariffs to the US.
"At the end of the day the trade negotiation game isn't that
sophisticated. You negotiate as well as you can with whatever
weapons you've got - political, logic, whatever - and when you
sense the bus is going to take off you jump on board. It's as
simple as that," he said.
International relations got "pretty close" to breaking down on
more than one occasion and the negotiations took their toll on
officials, Groser said.
"Our guys are dead on their feet. One had to have a doctor
called in because they're so dead."
"I've had to control my own temper with certain people that I
regard as good people," he said.
TPPA negotiations were awash with lobbyists from each country
and the Japanese and US politicians in particular were being
pressured not to budge.
"The pressure works and it forces the negotiators to leave
everything to the last minute. If you are representing a deeply
defensive industry in any country and seen to be making concessions
too early you're regarded as naive."
The deal is a political hot potato for Canada, just days out
from its general election.
Canadian officials confirmed the deal would only offer up just
3.25 per cent of the Canadian dairy market and around two per cent
of the poultry market over five years.
Farmers said during the negotiations that they could be crippled
if Canada gave up too much of its supply management system, which
imposes strict production quotas and export tariffs to keep
domestic dairy and poultry prices high.
Labour's acting leader Annette King said the detail was "scant"
and she wasn't convinced that there wouldn't still be costs down
the line in the health sector.
"We don't know about the protection of Pharmac because Doctors
Without Borders are saying it's in effect 8 years of patents on
"The whole argument is it's definitely five years now for us. If
they're saying at least five with further extensions being
interpreted as 8 years internationally, that is a huge cost on us
and we want to know that sort of detail."
The US and Canada will be taking will be taking it to congress
and Parliament respectively for a full debate and King said we need
that kind of commitment also.
"That way we can judge whether we have swallowed a lot of dead
rats...or made lots of ugly compromises as Groser said."
Green Party co-leader James Shaw said for the most part the TPPA
looked to be delivering status quo.
He said it was "hard to tell" if New Zealand would be worse off
not being part of it.
"For the most part the deal is actually the status quo...for
something that's taken five years to negotiate but only adds 1 per
cent to our GDP, it doesn't sound like it's that good a deal."
Shaw had concerns about the Investor-State Disputes Procedures
and while he said it was good news that tobacco companies had been
carved out of that there was still opportunity for other companies
"If we decide that we want to protect Maui's dolphin by not
exploring for oil in the area where Maui's dolphin lives then we'll
still be open to being sued by oil companies for loss of
He said the extension on copyright by 20 years would have a
"suppressing effect" on some New Zealand creative industries, who
now have a 70 year copyright to deal with.
New Zealand First leader Winston Peters said the promise of a
"Gold Standard TPPA" hadn't come through and while the details
remain sketchy it looks like "dairy and meat industries have taken
a real hit".
"New Zealand was promised a stretch limo and we're getting a
"Two of our critical primary industries, on which we rely so
much, know that they have been sold out," he said.
Staunch critic of the TPPA, Auckland University law professor
Jane Kelsey, has previously said the Government was doing a deal
"shrouded in secrecy".
But Groser said he was "absolutely convinced" the deal was a
good one but the critics would "never see themselves silenced".
"We'll still hear the 'TPP kills babies' crowd but in my view
they won't have a factual leg to stand on.
"Then we'll hear that we should have walked away because it
wasn't good enough on dairy, which is naive frankly," he said.
MEDICINES STANDOFF RESOLVED
Negotiators agreed on a minimum period of data protection for
next-generation biologic drugs of at least five years, after a
deadlock over rights for drug manufacturers including Pfizer Inc,
Roche Group's Genentech and Japan's Takeda Pharmaceutical Co.
The United States had sought 12 years of protection to encourage
pharmaceutical companies to invest in expensive biological
treatments like Genentech's cancer treatment Avastin.
US Trade Representative Michael Froman
But Australia, New Zealand and public health groups had sought a
period of five years to reduce drug costs and the burden on
state-subsidised medical programmes.
The outcome is a two-track system with an 8 year protection for
biologics and status quo for all other drugs.
DETAILS REMAIN SECRET
Trade representatives at the press conference gave only limited
details of the deal's contents.
"To formalise the outcomes of the agreement, negotiators will
continue technical work to prepare a complete text for public
release," US Trade Representative Michael Froman
Froman described the deal as "ambitious, comprehensive,
high standard and balanced".
The TPPA would give Japan's carmakers, led by Toyota, a freer
hand to buy parts from Asia for vehicles sold in the United States
but sets long phase-out periods for US tariffs on Japanese cars and
The trade deal also set minimum standards on issues ranging from
workers' rights to environmental protection. It also set up dispute
settlement guidelines between governments and foreign investors,
separate from national courts.
The agreement followed days of delays that saw a press
conference scheduled for 9am Monday (NZ time) repeatedly put off,
before being postponed to 2.20am Tuesday.
Watch the TPP Atlanta Ministerial Press