The US is set to reap the benefits of NZ concessions - without joining TPP

Prime Minister Bill English and wife Mary are greeted at a business meeting at the start of his three-day trip to Japan.
VERNON SMALL/FAIRFAX NZ

Prime Minister Bill English and wife Mary are greeted at a business meeting at the start of his three-day trip to Japan.

The Government has confirmed that countries not signed up to the Trans-Pacific Partnership, including the United States, will be able to reap the benefit of concessions New Zealand has made on pharmaceuticals.

Yet New Zealand will not benefit from better access to the US market in return, because president Donald Trump pulled it out of the pact.

Ironically, the concessions on the way drug agency Pharmac operates were made to make the 12-nation trade deal more palatable to the US.

Trade Minister Todd McClay says the US and others not in the TPP will benefit from Pharmac concessions.
FAIRFAX NZ

Trade Minister Todd McClay says the US and others not in the TPP will benefit from Pharmac concessions.

Trade Minister Todd McClay confirmed to reporters, on the eve of talks between Prime Minister Bill English and Japanese Prime Minister Shinzo Abe, that the US and others would benefit from the TPP rules on pharmaceuticals.

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For English and Abe the future of the TPP without the US will be a top agenda item.

McClay said New Zealand law changes made for the TPP meant "country specific" benefits only came into force when those countries had ratified it and the agreement went live.

"There are some parts of TPP, though, that are changes that all countries have made that actually other trading nations that aren't part of TPP will receive," he said. 

It was agreed as part of the TPP, after strong pressure from US pharmaceutical companies, that Pharmac would provide more information about how drugs are authorised and come to market.

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"If TPP was to go ahead in its current form they and other countries who aren't part of TPP as it was originally written would find some benefit," McClay said.

He said that was "the type of thing that happens with negotiation - that you make agreements that sometimes will benefit others".

The cost to Pharmac was quite small, he said.

A Pharmac estimate in 2016 put the cost of implementing the TPP-related amendments at $4.5 million in one-off establishment costs, plus $2.15m ongoing cost each year.

McClay said New Zealand had gained benefits from others' trade agreements.

The last time was when the WTO reached an agreement and parts of that were shared broadly with other members that had not signed up to parts of that.

But it was important to remember the Government had given a commitment "that the availability and cost of medicines wouldn't go up significantly for New Zealanders," McClay said.

"The only change really was around Pharmac had to provide more information to all parties around their processes. Actually Pharmac providing more information probably is a good thing."

He said for New Zealand TPP was a high quality outcome that will give unprecedented access to important markets around the world.

The future of the "TPP 11" or some smaller grouping of countries including Japan and New Zealand, who are the only two countries so far to formally ratify it, will be discussed on the margins of an APEC ministerial meeting in Vietnam later this week which McClay will co-chair.

He said the countries would discuss whether the TPP as negotiated should stay in place - NZ's preferred route - or the deal should be renegotiated now the US has quit.

Some countries believe retaining the deal in its current form is the best way to encourage the Us to join in the future, perhaps when Donald Trump is no longer president.

But Auckland University law professor Jane Kelsey, a strong opponent of the TPP, this week said the existing text has "all the toxic rules the US insisted on that undermine affordable medicines, grant foreign investors special rights to enforce offshore, prohibit requirements for data to be held onshore, and more".

"But why would the US want to re-join if its corporations have already got the benefits of the rules without paying anything for them?"

English said he was looking for positive support from Japan for a TPP 11.

"It will be interesting tomorrow to see just how positive of otherwise Prime Minister Abe could be."

 - Stuff

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