By Peter Kranz*

THERE HAS BEEN A LOT of self-congratulation in the Australian media about the proposed Asia-Pacific free trade agreement.

But has anyone considered the fine print, and the effect this may have on smaller countries like PNG?

One aspect of the proposal - so far overlooked - is the tightening of corporate interests and increasing their power to sue governments over restrictions on their operations.

Consider these words by Dr Patricia Ranald, Convenor of the Australian Fair Trade Network [Source: ABC Pacific Beat]:

The US wants to increase the intellectual property rights of pharmaceutical companies so basically this means they can charge higher prices for medicines, for longer. The second thing they want to do is they want to replace some the restrictions on the ability of governments to regulate the prices of medicines. And the third thing they want to do is give corporations, a single corporation, the right to sue governments for damages, if a law harms the investment of that company.

Now, taken together, these could have a very negative effect on the price of medicines in Australia and they expand the rights of pharmaceutical companies, at the expense of consumers.

The right of a single corporation to sue governments, is something that we kept out of the US-Australia Free Trade Agreement. It is being put again in the TPP, and the example we have of the harm that that can do is that Philip Morris tobacco company is currently attempting to sue the Australian government over its plain packaging legislation. Now, Philip Morris is a US company.

It couldn't sue us under the US-Australia Free Trade Agreement because it doesn't have that provision but it has rearranged its assets and it is calling itself a Hong Kong company and it is using an obscure Australia-Hong Kong bi-lateral investment treaty which was made in 1993.

Indirectly, the Pacific Islands could be affected because if this kind of agreement is set as the standard in the Asia-Pacific, which gives more intellectual property rights to pharmaceutical companies, reduces the ability of governments to regulate the price of medicines, then that means that sort of standard could emerge as something that is pushed for instance in PACER plus.

Now, we hope that is not the case but the danger is that this sort of US-style regulation if its established in the Asia-Pacific, then can be used as a wider standard for other trade agreements.

Papua New Guinea is a developing country. It would be opening itself up to restrictions on its ability to regulate the price of medicines and the proposal about the ability of a single corporation to sue governments could be very dangerous to PNG given all the mining projects.

If you look at all the kinds of cases that US companies have taken under this provision, often they involve mining companies and environmental provisions or mining companies and disputes over indigenous land rights.

* From the PNG Attitude blog