Following Howard’s stunning mishandling of the FTA debate, I’ve come to a marginally more optimistic view of the whole issue of FTA and PBS. After reading the various statements on both the review process and the issue of generics, it seems to me that a purely legalistic focus is misleading. I think the letter of the FTA gives a fair bit of room to move, allowing for interpretations more or less favorable to the pharmaceutical lobby on the one hand and the PBS on the other. The government has tried to have it both ways, assuring the Australian public that the FTA clauses relating to PBS are meaningless words inserted to placate the Americans, while promising their (very close) friends in the pharmaceutical lobby that they can expect more favorable treatment, consistent with Wooldridge’s efforts to stack the PBAC and so forth. Passage of the FTA without amendment would have made it easy for the government to deliver to its friends when the elections were out of the way and the electors conveniently on the sidelines. Adding amendments directed at specific possible abuses implies, more generally, that Australia is committed to ensuring that the drug lobby gets nothing more than its minimum legal entitlement under the FTA – a nonbinding review, and observation of patent law.
Of course, if the government gets back in there will be plenty of temptation to renegotiate after the election. But at least now the press is awake to the fact that this is a big story, and that there are headlines to be got from exposing cosy deals, dubious claims and so forth.
John Quiggin 
The idea that the Howard govt would place at risk the cost effectiveness of the PBS in the FTA is conspiratorial nonsense. It is as aware as the Labor Opposition, after the latter bit the bullet by passing 2 yr old govt legislation to increase copayments, that the PBS is a major ongoing threat to revenues. Our PBS was never on the table for negotiation under the FTA, just as the US had certain non-negotiables, like sugar.
I do think the govt sees a lucrative future for Australian drug research and development, with greater integration with the US market. It would want to protect patent law and standards to allow Australian companies to participate in this perceived, lucrative future. I think this is why Howard resisted what he saw as initially a silly proposal to penalise unsuccessful patent applicants.
What Latham has put into perspective for Australians is that if the rules are too favourable then there will be a lot of litigation – so that Australians are beaten into submission by the legal system.
This issue goes to the very heart of what it means to be Australian.
John Howard wanted Australia to remain a monarchy under a British queen but is working hard to become part of a republic.
It is hard to believe that in the pursuit of the dollar there are so many leaders on the Coalition benches who think that it is worse to be Anti-American than Pro-Australian and are prepared to sacrifice Australia’s sovereignty.
I don’t want to be a wet blanket, but there is a section in the submission by Drahos et al under the heading Constructive ambiguities.
They are apparently common in trade texts. They allow both sides to declare a “win” but reserving positions to sort out later. Drahos emphasises that it is not possible to say, from the FTA, how things will turn out.
Yesterday Tom Faunce emphasised that the real problems are likely to come from how the law will change in the future. I guess there is hope, because Big Pharma is surely getting to be on the nose and the FTA itself may not be the coercive instrument we have feared if there is wriggle room in the text.
It’s all about politics. Howard wants ownership of the FTA, which is one of his greatest triumphs and will, in the years to come, be his greatest claim to fame. Latham wanted to play to his loony left wing, and show his credentials. He can show his anti-Americanism by his opposition to the FTA and by implication to the US Alliance, but disguising it by pretending to be committed to protecting cheap generic drugs and the pharmaceutical benefits scheme broadly.
He is basically trying to talk with a forked tongue, saying one thing in code to his loonies and another to the broad Australian community. Problem is everyone can see through his bullsh*t.
Calling those who disagree with you “loonies” is not a substitute for producing a coherent argument. Please don’t do it in future.
(Of course, there are plenty of blogs where this kind of thing is considered the height of sophistication and comments of this kind might better be posted there.)
“It is hard to believe that in the pursuit of the dollar there are so many leaders on the Coalition benches who think that it is worse to be Anti-American than Pro-Australian and are prepared to sacrifice Australia’s sovereignty.”
Jill, on the side issue of Anti-American vs Pro-Australian there is a subtle difference. Working class people often exibit Anti-Americanism in a not unhealthy Australian trait of ‘tall poppyism’ as in the bloody boss, the bloody govt or the bloody Yanks. That is a far cry from some educated elite’s Anti-Americanism. Their attachment to the enemies of America, often makes them like friends of our enemies and hence the healthy skepticism that they are really Pro-Australian.
Tipper,
I would concur with John re your comments. Just as I don’t believe Howard would sell us out to Big Pharma in the FTA, I can accept that Latham’s proposed amendmendments on media cultural content and drug patents, were a genuine expression of his followers main concerns with the agreement. These were areas dear to their hearts. Now Howard accepted the first, but immediately saw problems with the initial proposal to fine unsuccessful patent applicants generally. It remains to be seen, how well law can be drafted to ameliorate both their concerns. That is the boring part of due parliamentary process and normally all this would be snooze material, but for a nation and its media in election mode.
The one thing this storm in a teacup did do was concentrate our minds on some of the more important issues around the FTA. When it seemed threatened for a moment, there was a softening of stances, as different players realised what was at stake. I guess as a market man, I would recognise the FTA has its shortcomings, but largely deferred to the superior wisdom of our Premiers, in assessing the overall benefits. After all they should have their finger on the pulse in these matters. I also have to acknowledge that total free trade between our countries is not all win, just as this ‘freer’ agreement isn’t. What the debate has thrown up is there is strong evidence that restrictive practices like our PBS, free rides on American drug consumers. Yes we have a beef with their agricultural restrictions, but they have a right not to be all sugary over our PBS restrictions.
Through all of this difficult negotiating the govt strikes what it believes to be the best compromised win/win deal with the US it can. Howard has to trumpet it as the greatest thing since sliced bread, while a new Opposition Leader, at the behest of his Party’s Premiers, must negotiate the minefield of skeptical left unions and the like. This is the hard yards of politics, where you don’t enjoy the purity of impotent bloggerdom. Now I have to acknowledge that Latham has negotiated this minefield fairly well and expressed his followers concerns in the amendments. This is what turning loudmouth backbenchers into PMs is all about in our democracy. Latham like Howard, must necessarily make some tough and unpopular calls with their constituencies. Howard has to tell his sugar farmers the bad news over the FTA, because he won’t sacrifice the PBS. Latham, you’ll recall, had to face the unpalatable but econoimically responsible task of raising the PBS copayments recently. Through all this I accept that real decisionmaking by both parties, is done largely with a degree of integrity, with the inevitable bit of politicking for the troops.
By all means barrack long and loud for your team and discuss the tactics and weaknesses of the other mob, but don’t cuss, because the kids might be listening. Dammit, the f…ing daughter wants to use the computer.
Observa,
It is not Anti American to ensure that Australian interests are looked after and one of the most basic of these is to ensure a population able to afford medical attention. It is not Anti American to look at the consequences over time for a deal which offers opportunities to undermine Australian laws through the use of litigation to ensure that favourable terms fro American companies prevail.
To obscure the arguments by referring to a general anti-Americanism by elites does not lead to a pro-Australian position but does label and belittle those who have genuine concerns about the benefits of such an all encompassing agreement with a much stronger power.
I don’t understand why some discuss Anti – Americanism whilst the benefits to Australians in general has been overlooked. The government cannot be trusted to give us an honest appraisal because of its history in distorting the truth. To question the benefits is not anti – American but all about being pro- Australian.