Pacific trade partnership: Obama administration’s ‘hands tied’

Promises made by Barack Obama to shore up support internally stymied a new trade deal, Andrew Robb says.

US President Barack Obama talks to the media before signing H.R. 3236 Ð the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 in the Oval Office at the White House in Washington on July 31, 2015. AFP PHOTO/YURI GRIPAS

The Obama Administration’s promises to protect industries for key congressmen and senators have “tied their hands” when it comes to clinching a watershed Asia-Pacific trade pact, Trade Minister Andrew Robb says.

Talks to conclude the Trans-Pacific Partnership last week broke down in Hawaii, with “reasonable progress” on medicines undermined by failures to reach agreement on car and dairy tariffs.

The Australian today revealed Tony Abbott had defied a personal plea from the US President to cave in to an American demand for longer medical patents that would push up drug prices in Australia.

Mr Robb said there was agreement on more than nine-tenths of the deal, although “nothing’s agreed until everything’s agreed”.

The Obama Administration “gave a lot of commitments to congressmen and senators which seem to have tied their hands when they got to the negotiation,” Mr Robb told ABC Radio today.

“As you understand well, in the US system there’s no great party discipline, it’s all about what can I protect in my own patch. And I feel it held back the resolution on a couple of those very big issues, cars for instance, in a way that was quite unfortunate.

“I keep saying to the Americans it is a deal to reduce protection, not increase it or maintain it.”

Mr Robb said the TPP’s controversial Investor-State Dispute Settlement provisions – which allow companies to sue countries that adversely affect business through changes in law – were “close to conclusion” on the basis that Australia must have “room to take decisions on public health and the environment in a way it can’t be litigated against”.

The US wants to increase the term for patents on biologic drugs — those made from natural sources — from five years to 12 years. The President put this position strongly to Mr Abbott. However, he firmly rejected Mr Obama’s proposal.

Mr Abbott and Mr Robb are on the record as saying they will sign no deal that will increase the price of drugs in Australia.