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Rob Long Is Wrong
I am flattered and humbled that my last post was discussed on the last flagship podcast, but I am sorry to say that I think Rob Long is wrong about TPP.
When Rob says that, “somethings are true even if Barack Obama says they are true and TPP is good for this country.” I am going to get into more of the substance of TPP in a few moments, but I’d like to begin by saying that Obama advocating for anything is a red flag. Why should I trust Obama when he says this is free trade or that this is good for America? Why would I trust anyone in government after the last 8 years? Did the Affordable Care Act make healthcare more affordable? Did Dodd-Frank protect consumers or did it just end up hurting small community banks while protecting big banks and big law firms? I should trust Obama on TPP after he said there wasn’t a smidgen of corruption at the IRS? I should trust Obama after he said he found out about Hillary’s server on the news even though the FBI documents showed that he emailed her on that very same server? I’m sorry, but Barack Obama is not to be trusted.
The same goes for members of congress because I do not believe a single member of congress read the 6,700 page TPP bill. If they didn’t read the 2,700-page Affordable Care Act, then they most definitely didn’t read the TPP bill. The federal government is not worthy of our trust and they have forfeited their right to pass massive comprehensive bills of any kind.
I have not read the entire bill myself, but I have looked into one area that should be of particular interest to all voters. The TPP will be terrible for average people because it will limit the availability of generic drugs and will stifle innovation in large drug companies.
Before I can continue to explain this, I have to explain how drugs are patented, protected, and approved by the FDA. When a drug company develops a new drug it has to go through a tremendous amount of red tape and testing before it can be approved for human use. The process is so extensive that it can actually bankrupt companies, which is why they are protected by patents. A drug patent lasts for 20 years. I personally think that 20 years is too long, but I’ll take them at their word. After 20 years a competing company can market a generic version of the drug, right? Wrong. Before another company can market the generic drug they have to re-perform all of the costly proof of efficacy trials. The generic company has to redo the trials because the original developer can withhold the initial research proving the drug is effective for an additional 5 years. The drug patent of 20 years is more like 25 years. Things become even more complicated when new benefits of existing drugs are found. I could spend an entire post arguing about the inefficiencies of the FDA drug approval process. The basic point is that it’s absurd that generic drug companies have to prove the efficacy of a drug that has already been proven to be effective; it’s not good for competition or innovation.
The TPP will only make the aforementioned drug approval process worse because it takes it international. The 5-year extension for data acquired during initial drug testing could be extended from 10 to 12 years in the signatory nations. Things continue to get even more complicated when new uses of existing drugs are found. We would be turning over an increasingly bureaucratic and inefficient drug approval system to a supra-national organization. I doubt things will become more efficient, but I can almost guarantee innovation and competition will continue to be stifled.
A final thought on free trade in general. I support free trade in theory because I view it as an extension of capitalism. The goal is to create an environment where I can prosper and that same prosperity can be spread across the world, which will hopefully improve the lives of everyone. My concern is with how free trade or what is called free trade is actually practiced today. I find myself wondering if free trade is actually possible? How can we compete against countries that are unscrupulous and have little thought for individual citizens? Is my iPhone worth the terrible conditions at the Foxconn factory? Would American companies figure out how to make their devices in the US, if they didn’t have the option of cheap foreign labor? What are the negative effects of large American companies thinking of themselves as international companies rather than American companies that happen to make some products overseas? If we can’t actually compete does that make it free trade? What about the social consequences of industries leaving? Are cheaper clothes at Walmart worth the erosion of the community and social fabric? I don’t know these answers, but I agree with Richard Feynman when he said, “I would rather have questions that can’t be answered, than answers that can’t be questioned.”
I do know that if TPP is passed the generic drug market will suffer, innovation will suffer, competition will suffer, and Americans will suffer. The more removed the governors are from the governed, the worse it will be for the people. The average citizen can barely get their congressmen to care about them, how will we be able to influence the new TPP bureaucracy? We won’t.
Published in General
Do you believe that other American Presidents have not been keen to bring the rest of the world onto US standards in a way that makes life cheaper and easier for American enterprise? If we adjust to fit international norms, we’re engaging in controversial behavior. Having the rest of the world adjust to fit us seems only right and proper. If you want to give examples of modern politicians that you like, it wouldn’t be much work to come up with a list of initiatives they supported that would bring this about (Ron Paul was genuinely isolationist and so forms an exception, but every good and normal politician supports this.)
The comprehensive bill I know best, having studied it in Mexico, Canada, Curacao, Germany, Italy, and London along with UC Berkeley, California Western, and UC Davis in the US, is the NAFTA. There were lots of claims like this before the NAFTA was passed (and, to be fair, lots after). There was never one that was correct. Nothing hidden. Nothing was revealed in the text that was unexpected (there were people who expressed surprise after Metalclad showed that the investor state dispute resolution mechanism really did act like a takings clause provision for Mexico, just as it said it did, but very few who were both informed and honest). There is nothing in the NAFTA that benefits an insider over anyone else in the long term (there were some tariffs that came down more slowly than others, but a little delay was the most that even the best lobbying campaign could buy).
Right. You should trust but verify. The text is there for you to look at if you want.
It simplifies the current spaghetti bowl of highly similar but not identical bilateral arrangements with a single system, making an export regulatory environment that is already much cheaper than the pre-NAFTA environment cheaper still.
It adds Japan, New Zealand, etc. to the US network of tariff free trade.
It adds coverage for protectionist measures that were not invented when Reagan wrote up the models. Data localization laws, for instance, which insist that electronic data is stored in an in-country database are a popular way of extracting rent from multinational tech companies and are curtailed by the TPP.
It makes it cheaper for some of our allies to trade with each other rather than with China.
The benefits are pretty substantial. People who are familiar with the content of the agreement, or with portions of the agreement (Jamie Lockett, for instance, has read some decent sized chunks) can talk knowledgeably and confidently about it. Experts in Congress like George Holding can, and do, talk about it confidently and intelligently, in part thanks to direct research and in part because their staff work pretty hard on it.
If you want to talk about specifics, do you have any sense of what the future disaster might look like?
I agree with most of this. The nit picking that follows addresses only the bits that I don’t agree with.
The biggest reason that the TPP’s effect will be much more limited than the NAFTA’s is because we already have tariff free trade with most of the members. Before CUSFTA and the Israel FTA, the US had no tariff free external trade. Before NAFTA, it had no free trade with developing countries. The CAFTA, KORUSFTA,
The TPP reduces the trade bureaucracy.Having separate agreements with Korea, Chile, Peru, CAFTA, NAFTA, Australia, Panama, and such makes work for the companies that have to comply with them (although less work than before those agreements were passed) and more for the ITA in the Department of Commerce. Just having the one agreement is simpler and cheaper.
Sorry, but the TPP is unlikely to reduce the power of the DoC much. We’ve got almost three decades of FTAs and they’re pretty effectively designed to change US behavior less than the behavior of America’s partners.
They’re pretty good for monocultures, too. If what you do is sell sugar and bananas, tariff free access to foreign markets is nice, and the removal of barriers to buying the diversified offerings of foreigners is helpful, too. Plus the improvements to rule of law and such.
If you were an economist, you could still be wrong. See Prof. Groseclose’s stupid argument that if we want to stop Clinton we should vote third party on the recent main feed. Indeed, if you were one of the many economists employed by unions to pump out bilge, you might even be more likely to be wrong about trade.
The point made in the OP regarding how pharmaceuticals will be addressed under TPP was good. Tariffs are attacked by free trade advocates in part because they do more harm than good in the final analysis. This conclusion is generally based, as I understand it, on the net effects on GDP and its components, so its a numbers game. Trade deals such as TPP are different from tariffs in that they are multilateral and the benefits and harms are mutually negotiated and agreed upon by ‘government’ officials from the involved nations. Why would those of us in the United States who have experienced the destruction of our constitutional compact by the expert practice of crony capitalism by government and business (including non-profits) domestically expect to get a different type of outcome from such international trade deals when these agreements are being made by the same parties? Except now what’s at stake will be national sovereignty and since I happen to think our constitutional system and its acknowledgement and protections of individual liberty are worthy of preservation, so I agree with the post.
I think that Stad is talking about the difficulty in finding out the contents before the contents existed, when they were in the late stages of negotiation. The USTR’s office tries to find a balance between getting the involvement and input from the relevant committees in Congress that would help resolve issues before they arise and giving the sort of access that would help the Alan Graysons and their ilk to spread lies about the agreement. So, reading in hard copy without the ability to sneak those copies out, that sort of thing. Now, obviously, everyone has full access, but there was a lengthy period of complaints before the text existed that the text was not being displayed to anyone, to the great consternation of Breitbart and Infowars.
My concern is that this omnibus bill is too large for anyone to understand and leaves myriad portals open for self aggrandizement by the connected inner circle of power. I have no problem with trade under open and not even necessarily equal situations. A trade deal with Canada or Japan or Israel, open and verfiable, is great. What did Ronald say…trust, but verify. This is too big and supported by the wrong people. I do not trust it. Why should I?
Reagan signed omnibus trade agreements of similar length and supported trade agreements of even more similar length. The bill isn’t all that hard to understand. It’s long, so if you’re uninterested in the topic you might not want to bother, but length and complexity are not the same. School choice bills in large states, for instance, are far more complex than this.
We have a lot of experience with these sorts of laws. They do not leave portals open for self aggrandizement by the connected inner circle of power. They close portals for that stuff; they make it harder for connected industries to exclude foreigners.
You’re saying that the NAFTA is fine (and so, I guess, is the NAFTA recapitulating part of the TPP). You’re saying a new FTA with Japan would be fine. The TPP is open and verifiable (it is far more so than most laws; find another law that has as much effort put into educating people on the contents, making the language publicly available, and is open for study for as long before being voted on as the TPP and I’ll be impressed; it is my understanding that it is unprecendentedly open). Is your problem, then, that we have just one document for Japan and Canada when they should have different rules?
If Reagan had said “trust, but verify, and I’m not going to go to the effort of verifying, so I’m not going to sign the deal”, he’d have been saying the opposite of what he actually said. I agree that it’s a good idea to go to the text of the treaty. You don’t have to read the whole thing; read a guide to it, pick a chunk of text to read, verify that it says what the guide says, and you’ll have Reagan’s approach. So long as it’s not predictable which chunk of text you’ll read, you’ll have the full Reaganite verification process in place.
It’s supported by a minority of the wrong people (Obama is for, Al Franken and most of the Democrats in Congress are against). It is supported by the majority of the right people (Mike Lee and every conservative in Congress has been supportive of it, although Cruz’s flip flop in the late stages of the primary means that I have to use the past tense to make support universal; now it is only nearly universal). Reagan supported the same basic deal (other than the specifics of the countries involved, there is nothing in the TPP that Reagan did not explicitly endorse in principle). So did both Bushes. Goldwater, too (although he wasn’t asked about it until quite near the end of his life).
But if you want to verify, then verify.
Exactly. There is a world of difference between “We have to pass it before we know what’s in it.” and “We have to write it before we know what’s in it.”
I’m operating solely on my poor memory now. Was there a vote in the Senate on TPP that occurred before the full text of the agreement was available to the public?
I’m not sure I follow you.
I think you are thinking of the vote on fast track authority (which was confusingly called TPA – Trade Promotion Authority.) That vote was widely considered a proxy for TPP because it was the biggest trade deal in the near future and if TPA passed, then TPP could only be voted up or down with no amendments. There was much discussion of TPP during the vote, and I think a few people were allowed to look at a draft of the TPP, but that was not a vote on TPP which would still need to approved by congress.
He’s talking about Trade Promotion Authority. Most people don’t understand how it works – it is authority given to the President to negotiate trade treaties that congress can either approve or deny. It is ongoing authority that isn’t specifically related to any specific trade agreement. Congress still has the ability to approve or deny final authorization of the agreement and simply smooths the negotiation process.
I don’t see how. As far as I know, the notion of intellectual property is a relatively recent innovation, historically. It didn’t exist until governments decided to establish rights to it. The only way ideas were protected from use by others in the past was to keep them secret.
His consumption of hamburgers is bad for America. It’s not confusing at all.
You raise an excellent point. I’m definitely nervous about it because I don’t trust the Obama administration to not be too quick to place the U.S. interests below the world collective interest. I have not read the TPP.
@jamesofengland, it looks to me as though you and @herculesrockefeller are talking at cross purposes. He has significant knowledge and experience within a specific part of a specific industry and so is able to discuss the changes which TPP will bring to his industry’s commercial and regulatory environment and the likely consequences of those changes. He assesses those changes as not only being in the best interests of US companies in the industry, but as being detrimental to humanity in general.
He then expresses worry that over and above that, TPP looks likely to bring an international metastasis of the sort of administrative state that is such a detriment to the U.S.
His concern is that if it’s true in one industry that he knows specifically, it’s probably true for other industries and that would be a Bad Thing.
Your response is primarily historical and procedural and does not address the specific case he mentioned. It’s certainly possible that @herculesrockefeller can’t see the forest for the trees and the overall effect of TPP is so beneficial that he, his industry, and the people who would have benefited from drugs that will now never be developed will have to take one for the team, but that’s not the case you made.
If it’s a moment of clarity that causes Obama to support TPP, then I’m definitely against it. If he did it out of a confused mind, it would be more reassuring.
I agree that part of HR’s concern is that there will be a new international body that deals with this stuff. I don’t believe that his claim is accurate, though, which is why I asked him to clarify which new international body would deal with this stuff.
I wonder if the Trans-Pacific Partnership Commission is the body. As I read the TPP text it does have the authority (or the authority to assume the authority or to form agencies or other bodies which have the authority) to do what @herculesrockefeller said:
You make a drug. By means of highly problematic research (or, as in the case of SSRIs, by suppressing numerous unfavorable studies) you get it included into national or industry formularies, or get your drug approved for new uses or new classes of patients.
TPP’s intellectual property provisions will, I think, facilitate data suppression and thwart the move towards transparency with respect to scientific data, and ossify the formularies – which are also the key to government or third party payor reimbursement for your drug.
If the Commission can do these things, it will.
So, for people following along, you can find the text of the part of the act that establishes the TPP Commission here.
With regard to data suppression, are you talking about Article 18.50? I include the first two portions below and link to it, but I don’t think that the TPP Commission, which takes actions only by unanimous consent and doesn’t have an obvious remit for pharmaceutical management, would have an administrative role that relates to this that goes beyond providing a forum in which any governments that had disputes about this sort of stuff could discuss their disagreements.
Article 18.50: Protection of Undisclosed Test or Other Data[50]
1. (a) If a Party requires, as a condition for granting marketing approval for a new pharmaceutical product, the submission of undisclosed test or other data concerning the safety and efficacy of the product,[51] that Party shall not permit third persons, without the consent of the person that previously submitted such information, to market the same or a similar[52] product on the basis of:
(i) that information; or
(ii) the marketing approval granted to the person that submitted such information,
for at least five years[53] from the date of marketing approval of the new pharmaceutical product in the territory of the Party.
(b) If a Party permits, as a condition of granting marketing approval for a new pharmaceutical product, the submission of evidence of prior marketing approval of the product in another territory, that Party shall not permit third persons, without the consent of a person that previously submitted such information concerning the safety and efficacy of the product, to market a same or a similar product based on evidence relating to prior marketing approval in the other territory for at least five years from the date of marketing approval of the new pharmaceutical product in the territory of that Party.[54]
2. Each Party shall:[55]
(a) apply paragraph 1, mutatis mutandis, for a period of at least three years with respect to new clinical information submitted as required in support of a marketing approval of a previously approved pharmaceutical product covering a new indication, new formulation or new method of administration; or, alternatively,
(b) apply paragraph 1, mutatis mutandis, for a period of at least five years to new pharmaceutical products that contain a chemical entity that has not been previously approved in that Party.[56]
Except that the major corporations involved are international with interests different from those of any particular nation.
To provide background and context on that, I linked to one of a spate of recent publications describing the breadth, depth and consequences of the massive corruption of the scientific literature, particularly pharmaceutical related articles in which the norm has become suppression of negative results (i.e. the ones showing that drug X is indistinguishable from placebo in the majority of trials conducted) and just publishing a cherry picked favorable trial or two.
There is a growing movement to bring sunlight to corrupted fields by mandating publication of full datasets and all studies performed including ones with negative results.
The provisions established in 18.51 seems to grant standard setting and administrative powers to the Commission or its designees with respect to intellectual property in biologics. And the language elsewhere in §18’s intellectual property provision seems to this non-lawyer to do for patents exactly what @herculesrockefeller said: stifle new drug development. I also think the IP provisions will allow a corporation to use TPP’s copyright protection standards to prevent the retrospective publication of suppressed data (often involving FOIA requests) and thereby frustrate efforts to conduct improved retrospective data analyses that would threaten the market share of drugs that are lucrative despite the shaky science that launched them.
[continued below]
It would be interesting to see if @herculesrockefeller can shed light on the question of whether the stakeholders involved in the TPP pharma intellectual property negotiations included major players in the open source data movement or whether the talks were dominated by pharma and government entities who oppose open source data.
Could you expand on how the Commission is granted powers to set standards for something? I’m pretty confident that the Commission is not going to do that; I’m not sure under which power you’re suggesting it could, there is no clear reason for it to, and the agreements being replaced have never seen behavior like that.
I don’t understand the stuff about corporations having different interests to countries either. The Commission is a governmental entity that operates by the unanimous consensus of all member states (in other words, it generally operates only to do uncontentious things). If there is a conspiracy large enough to swing all the governments to a position, it would still need an independent Act of Congress to override an FDA position or an executive order, if the President is authorized to make the change by existing law. If the latter is the case, going to a lot of effort to get the President to tell himself (non-bindingly) to overrule an order seems and then getting him to change it seems unlikely to be easier than just getting him to change it. If the former, it seems as if it would be actively unhelpful.
I guess my problem with the latter bit is “major corporations involved”. Involved how?