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Trade

July 31, 2015

The Australia-U.S. Free Trade Agreement Did NOT Blow-up Australia's Pharmaceutical Benefits Program

Right now, literally as I type this, Australian trade negotiators are reportedly resisting U.S. demands for increased protection of pharmaceutical and biotech innovation in the Trans-Pacific Partnership (TPP) agreement. They are no doubt motivated by the warnings of Australian academics and researchers that Australia’s Pharmaceutical Benefits Scheme (PBS), which the Australian government uses to control drug prices, will be weakened or undone altogether by extending the period of data protection for biologics, among other provisions.

The sky-is-falling warning from these academic critics of the pharmaceutical industry is that protecting the products of innovation will necessarily result in dramatic price increases, which Australia (and Australians) will no longer be able to afford.

Interestingly, Australian academics made this exact same argument in 2003, warning Australia about the treaty that was then being negotiated, the Australia-U.S. Free Trade Agreement (FTA).  

I have before me a copy of a paper published by The Australia Institute, entitled “A Backdoor to Higher Medicine Prices? Intellectual Property and the Australia-US Free Trade Agreement,” by Dr. Buddhima Lokuge, Dr. Thomas Alured Faunce, and Richard Denniss.

The paper predicted that the Australia-U.S. FTA would result in dramatic increases in the cost of prescription drugs in Australia.

“This paper examines five leading medicines near the end of their patent lives in Australia. Based on PBS expenditures for these drugs in 2003, we estimated the potential cost of likely changes to IP provisions under the FTA to the PBS and Australian taxpayers. The costs accrue over a four-year period from 2006 to 2009. . . . The ‘central case’ estimate is that the additional cost of these five drugs alone, as a result of IP provisions in the FTA, will be more than $1.12 billion with a lower estimate of $850 million and an upper estimate of $1.56 billion.”

But they were wrong then, and they’re likely wrong now. Read More >>

Posted by Tom Giovanetti | Comments

July 30, 2015

Australia Drug Prices Did NOT Increase After Australia-U.S. FTA

A piece in today’s Dominion Post (New Zealand) finds that warnings about higher drug prices as a result of free trade agreements are baseless, as least as far as facts are concerned:

“We can't assume medicine costs will increase if some patents or Intellectual Property protections are extended. Speculation about rising medicine prices under the TPPA mirror concerns Australians voiced over the U.S-Australia FTA. However, since signing the FTA in 2005, Australia's spend on pharmaceuticals has remained stable and the rate of expenditure has decreased. In 2006 Canada's pharmaceutical spend decreased after implementing an eight year data protection period. Similarly, after Japan increased data protection in 2007 to eight years, pharmaceutical spend decreased and health care spend increased by the year 2010.” Read More >>

Posted by Tom Giovanetti | Comments

July 15, 2015

TPP Critic Quigley Writes Article for Foreign Policy; Coordinates with Anti-IP Activists

On Monday, a writer named Fran Quigley had a piece published on the Foreign Affairs website that was highly critical of some of the provisions in drafts of the Trans-Pacific Partnership (TPP) agreement.

We’ll get around to dealing with the arguments in Quigley’s FP article in a separate blog post.

Quigley’s title of “Clinical Professor of Law in the Health and Human Rights Clinic” at Indiana University tells us much of what we need to know. If you merge health and human rights, you have already decided that access to every bit of the latest health care technology available is a human right, and if it’s a human right, it’s your right to have it for free, or for something very close to free.

That makes Quigley an activist more than an analyst of the provisions of the TPP. A look at his cv demonstrates that Fran is a social justice crusader, a proponent of the labor movement, and a neighborhood organizer type. Read More >>

Posted by Tom Giovanetti | Comments

June 3, 2015

Toward a Free Market Agriculture Policy

A few weeks ago Americans for Limited Government Foundation published a paper by Dr. J. Wesley Burnett of the College of Charleston on "Moving to a Free Market Agriculture Policy." It's a great, short survey of U.S. agriculture policy, especially of recent policy changes, and the role of U.S. agriculture in global agriculture markets. If you're looking for an accessible way to get up-to-speed on federal agriculture policies, this paper is a great means of doing so.

I was drawn to the paper because it also touches on sugar policy reform, something I've written on a couple of times recently for IPI. The paper endorses a multilateral approach to solving the sugar subsidy problem, as I have also suggested. Read More >>

Posted by Tom Giovanetti | Comments

May 31, 2015

An Important Supporting Argument for the Trans-Pacific Partnership (TPP) agreement

An important (though not primary) argument for the importance of the Trans-Pacific Partnership (TPP) trade agreement, and thus for the importance of trade promotion authority (TPA):

"The only thing that could stop China from dominating Asia would be if a hostile, sustainable alliance of Pacific Rim nations emerged." Read More >>

Posted by Tom Giovanetti | Comments

May 2, 2015

Now Is the Time for Republicans to Back TPA (Trade Promotion Authority)

Republicans should enthusiastically support Trade Promotion Authority (TPA). Yes, Obama is mostly right on trade. Even a stopped clock is right twice a day.

This TPA extends past the Obama admin into the next, hopefully Republican, administration. So it's not just for Obama.

"Why not wait until we're sure the next president is a Republican?" some say. Here's the problem: Right now you can peel off a certain number of Dem votes for TPA because it's for a Dem president. If a Republican is president, you'll never get those Dem votes.

Now is the time for TPA. Not just because it's right, but because it's in the strategic interest of the next (hopefully) Republican president as well. Read More >>

Posted by Tom Giovanetti | Comments

January 22, 2015

An Issue In Which We Can Agree: Fast Tracking the TPP

Trade may be the one area in which Congressional Republicans and the president can work together, and Obama has called the Trans Pacific Partnership a high priority that would not only strengthen the U.S. as a leader in the Pacific Rim, but also create jobs, boost investment, and be a boon to small businesses.   

  Read More >>

Posted by Erin Humiston | Comments

November 19, 2014

Can President Obama Work with the Republican Congress on Trade?

An obvious question after the sweeping Republican election win is: “What hope is there for constructive outcomes between President Obama and the Republican Congress during the next two years?”

President Obama and Republican leaders have both answered this question with at least one answer in common: Trade policy. New Senate Majority Leader Mitch McConnell says that he and the President have already discussed trade as one area of possible cooperation,

There now appears to be a renewed possibility of Republicans passing fast track trade promotion authority early in the new Congress, which would revitalize trade negotiations such as the Trans Pacific Partnership (TPP) and other agreements. In general, it’s fair to say that Republicans are more favorably inclined toward trade liberalization than are Democrats, which is at least part of why Democrat Senate leader Harry Reid went out of his way to kill any possibility of progress on trade agreements early in 2014.

Support for freer trade has always been a hallmark of free-market conservative philosophy, although Republicans have also occasionally been guilty of protectionism, and there seems to be a disturbing distrust of free trade among some in the Tea Party movement that policy thought leaders like IPI will be addressing as part of our trade policy program. Ultimately, the evidence is overwhelming that freer trade leads to more economic efficiency and to greater job creation in areas of each nation’s competitive advantage. Read More >>

Posted by Tom Giovanetti | Comments

October 14, 2014

Ending Sugar Subsidies the Right (the Only?) Way

Because of our interest in trade policy and general opposition to government subsidies and other interference in private markets, we’ve done a few pieces on the issue of sugar subsidies, and lately about the best way to phase them out.

About this time last year we released “Solving the Sugar Subsidy Problem,” which outlined the basics of the issue and suggested that the solution must be some sort of global trade pact, most likely through a World Trade Organization (WTO) process.

And this past May we released “Seeking a Global Solution in Sugar Trade Policy,” which explained some of the enormous sugar subsidies and other trade distortions common to trading partners like Brazil, India, Mexico and Thailand. In the face of such global subsidies, only a global solution is probably workable.

Otherwise, you simply allow subsidized foreign competition to destroy our domestic sugar industry, after which time you could expect foreign suppliers to ratchet back up the price, as we explained.

Last week, Americans for Limited Government released a new paper reviewing the material on foreign sugar subsidies by those same four major producers (India, Thailand, Mexico and Brazil), and essentially pleading for free-traders and free-market promoters to embrace the global agreement model, as outlined by Rep. Ted Yoho (R-FL).

Essentially, the Yoho “zero-for-zero” proposal is a commitment by the U.S. that we would eliminate all our sugar subsidy programs if our trading partners would agree to come to a similar agreement. The Yoho plan would require some sort of trade agreement, either a bilateral or multilateral “Sugar FTA” or a WTO agreement. But, under Yoho’s plan, the U.S. takes the first step by making the commitment.

The alternatives are to either leave in place the status quo, which free-marketers and free-traders oppose, or unilateral disarmament, which free-marketers and free-traders (I argue) SHOULD oppose. Read More >>

Posted by Tom Giovanetti | Comments

September 23, 2014

Yes, Of Course, In Trade Agreements, the Devil Is In the Details

Simon Lester, who I met earlier this year speaking at a Cato event, has a blog up over at Cato at Liberty giving a somewhat nuanced response to my new IPI Ideas on including IP protection in trade agreements.

His point, essentially, is that I'm being very general rather than granular in my argument. And he's completely right, of course. My argument in the piece IS a general argument; namely, that it's appropriate and important to include IP in trade agreements.

And, in fact, my general argument in favor is a response to the general argument that is being made by many, including Cato personnel, that IP should NOT be included in trade agreements. Read More >>

Posted by Tom Giovanetti | Comments

September 19, 2014

U.S. Petroleum Exports Up, Crude Oil Imports Down

We've spoken several times about how the United States has the potential to become energy self-sufficient through the shale revolution. Indeed, the U.S. could become the world's #1 exporter of energy, if the right policies are put into place.

As evidence that this is beginning to happen, Bloomberg reports that, in August, U.S. exports of petroleum hit record highs, and imports of crude oil hit record lows.

U.S. exports of petroleum products reached a record in August for the month as refiners boosted rates, the American Petroleum Institute said. Read More >>

Posted by Tom Giovanetti | Comments

September 16, 2014

We're Flaring (Wasting) Shale Gas Because We Can't Export It

I have one of those "Earth at Night" maps from National Geographic on a wall in IPI's offices. Among the things it shows is places in Russia, the Middle East and East Africa that seem to be on fire. That's flaring--the burning off of gas or oil because for one reason or another it isn't being captured and refined.

Most of the time this is because of inefficient operations, lack of pipelines, etc. But according to a piece a few days ago in the San Antonio Express-News, there's quite a bit of flaring going on in U.S. shale formations like the Eagle Ford.

The article is reasonably fair and balanced, but, as Jon Cassidy at Watchdog.org points out, the main reason for flaring in the U.S. is the federal export ban on oil & natural gas.

There is one key fact, however, that went missing from the series, which explains a lot of what’s going on. If the reporters knew of it, they may have just decided it was beyond the scope of their story. It’s this: low natural gas prices are not some inalterable fact of the free market. They are largely the result of a federal ban on natural gas exports that dates back to the Arab Oil Embargo. Read More >>

Posted by Tom Giovanetti | Comments

August 22, 2014

The One-Two Punch Against American Agriculture

It’s almost as if it is official U.S. policy to make it difficult for American businesses to succeed.

First and most significantly, we subject American businesses to the highest tax rates among all of our competitors—39.1% when you add in state taxes. That’s significantly higher than the O.E.C.D average of 25 percent, and it’s even higher than the supposedly “high tax European countries”—consider that Belgium (34 percent), France (34.4 percent), and Sweden (22 percent) all have lower business taxes than does the United States.

Then, at least for select industries, we aid their overseas competitors. Through the Export-Import Bank we finance foreign purchases of Boeing jets, which helps foreign competitors of Delta, Southwest, American, FedEx and UPS. We could solve that problem this year by simply allowing Ex-Im to expire.

We allow other of our domestic industries to be exposed to blatant market manipulation and outright attack by our trading partners, particularly in agriculture. Yes, American agriculture policy is a rats nest of loans, supports and protections that are hard to justify in a free-market economy, and conservatives recognize these as market distorting. Of course we should move toward phasing out these protections. Read More >>

Posted by Tom Giovanetti | Comments

June 17, 2014

Export-Import Bank loaning money to drug cartels

In an op/ed published Wednesday in the Dallas Morning News I argue that Republicans should let the Export-Import Bank expire instead of reauthorizing it.

In the piece, I mention a charge that the Export-Import Bank may have loaned money to Mexican drug cartels.

Of course, you can't put hyperlinks or footnotes in op/eds. So here's the source of that little factoid from 2007, compliments of the Wayback Machine.

DALLAS - A News 8 investigation has found that a little known government agency may have unwittingly wasted taxpayers money on top of using the funds to support criminal activity.

The probe originally revealed that small business loans sponsored by the Export-Import Bank of the United States were made to non-existing companies for equipment that wasn't even real.

Now, New 8 has discovered that some of the people who got the Ex-Im Bank loans may have drug connections. The $243 million worth of bad loans were originally made to help trade with Mexico.

The loans have been linked to the Juarez drug cartel, which is known for its brutal murders. The cartel killed one dozen people and buried them in a suburban backyard across the border fro El Paso.

Another loan was linked to the Sinaloa drug cartel, whose business is smuggling heroin into the United States.

The federally funded Ex-Im Bank apparently backed loans to people affiliated with both cartels and the Mexican drug trade.

Under the Freedom of Information Act, News 8 asked for all documentation related to defaulted small business loans made to Mexico from 2002 to 2005. Although there were nearly 200 bad loans, so far, information on only 34 cases has been turned over.

But the bank did give a list of the defaulted loans and the names and addresses of the people who got them in Mexico.

"They have drug connections, which is very disheartening to think that the U.S. government is lending money to documented traffickers in the drug trade that are tied into the cartels in Mexico," said Phil Jordan, the former head of the El Paso Intelligence Center for the DEA and Border Patrol in El Paso.

Jordan ran background checks of the borrowers with two federal sources and found borrowers from Juarez and Sinaloa with criminal ties to money laundering, organized crime or drugs in Mexico. Jordan said he was surprised to find that the Ex-Im Bank didn't do similar checks before guaranteeing the loans. Read More >>

Posted by Tom Giovanetti | Comments

June 12, 2014

Ireland Plain Packaging Regulation Misguided, Harmful

Posted by Erin Humiston | Comments

 

Total Records: 41

 

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