Red Pepper | 27 May 2019
Free trade can seriously damage your health
by T.J. Coles
We hear a lot about “free trade” these days. It is a profit mechanism that is neither free nor primarily about trade–but that’s another story. For example, former UKIP leader and now co-founder and frontperson of the new Brexit Party, Nigel Farage, reiterates his desire to do “free trade” deals with the USA once Britain leaves the European Union. Even supposedly more moderate Tories talk up the possibility of post-Brexit “trade deals” with Trump. Pro-“free trade” Brexiteers, like the multimillionaire Tory, Jacob Rees-Mogg, frequently tout the notion of leaving the EU “on WTO terms,” referring to the World Trade Organization. But so-called free trade and institutions like the WTO that enable it can seriously damage your health. Measures to protect patents and intellectual property owned by subsidised US tech giants and big pharma are written into the pages of dense and lengthy trade deals, all of which are drafted in secret.
Consider these cases. Intellectual property (IP) covers several fields, including artistic, creative and literary works, biotechnology, medicine, trademarks and geographical indication (e.g., Roquefort cheese, Scotch whiskey, etc.). IP rights enable corporations to own the building blocks of life: from medicine to whole genes. The Utah-based Myriad Genetics, Inc. attempted to isolate and patent the BRCA1 and BRCA2 genes, which are breast cancer indicators. In doing so, the company attempted to block researchers from testing the genes by charging some $4,000 per test. After a long legal battle, the US Supreme Court rejected Myriad’s monopoly plea. That hasn’t deterred Myriad from continuing to litigate against cancer researchers.
The patenting of life has its origins in the 1970s. In 1971, Dr. Ananda Chakrabarty of General Electric applied to the US Patent and Trademark Office (PTO) to patent a genetically-modified organism (GMO) engineered to consume oil spills. The PTO rejected the proposal on the grounds that living things are not patentable. Chakrabarty and his paymasters appealed to the Court of Customs and Patent Appeals, whose judges voted in their favour. The decision opened the floodgates, allowing anything but a “complete” human being to be patented. Since then, there has been a race to patent every gene and combination. In 1984, after Mr. John Moore attended the University of California-Los Angeles for skin cancer treatment, the University and Sandoz Pharmaceutical Corp. obtained and patented his spleen cells (making $3 billion), without his knowledge or consent. In 1990, the Supreme Court of California ruled that Mr. Moore had no rights over his own cells. As well as human cells, entire plants are being patented. By 2003, 127,000 patent applications were filed for human genes and sequences.
IP regulation is internationalized via the World Trade Oganization’s Trade-Related Intellectual Property Rights (TRIPS) agreement. However, bilateral agreements allow TRIPS to be flouted. “[T]here is no compelling evidence that a single standard or a standard appropriate for developed countries,” such as the TRIPS agreement, “will certainly maximize the innovative abilities of late-industrializing countries,” writes Juan He in the Chinese Journal of International Law. Juan concludes that standardisation of IP protection mechanisms “…is unreasonable and unrealistic in that it hampers rather than facilitates achievement of an individually appropriate legal balance.” This is especially so in a system designed by the powerful. Through TRIPS, “a right owner,” such as a biotech firm, “cannot prevent importation of products embodying its IPRs [intellectual property rights] so long as such products have been put legally on any foreign market.” This means that US companies can undermine development by exporting IP-protected products to third countries.
The UN’s Sub-Committee on the Promotion and Protection of Human Rights (2000) states that the TRIPS provision of the WTO “does not reflect the fundamental nature and indivisibility of all human rights, including the right of everyone to enjoy the benefits of scientific progress and its applications, the right to health, the right to food, and the right to self-determination.” It concludes that “there are apparent conflicts between the intellectual property rights regime embodied in the TRIPS Agreement, on the one hand, and international human rights law, on the other.” A report by the UN’s Office of the High Commissioner for Human Rights states that the pharmaceutical industry focuses on “profitable” diseases, such as HIV/AIDS and considers TB, malaria and smaller killers “bad investments.”
Consider the case of South Africa. South Africa is a country of 53 million people, 50% of whom are poor, 30% of whom are unemployed. About 18.5% of the population has HIV/AIDS. When the post-Apartheid government proposed lowering drug prices, the Pharmaceutical Manufacturers’ Association of South Africa, which is dominated by Western drug companies, raised formal objections. Professor William W. Fisher of the Harvard Law School writes that, “[f]earing a domino effect in the developing world,” American drug giants, with the support of the Bill Clinton administration, alleged that South Africa’s domestic legislation mandating the lowering of drug prices to help AIDS victims was a violation of the TRIPS agreement. A rep from the Bristol-Myers Squibb drug company said: “Patents are the lifeblood of our industry. Compulsory licensing,” where governments cite national emergencies in order to waive licensing fees, “expropriate our patent rights.”
In addition, the protection of testing data in bilateral trade agreements amounts to “a substitute for patent protection, thereby detracting from the public domain products that should be freely available,” writes patent expert, Professor Carlos Correa.
Former World Bank chief economist and Nobel laureate, Professor Joseph Stiglitz, writes that “[p]oorly designed intellectual property regimes can reduce access to technology and medicine, lead to a less efficient economy, and may even slow the pace of innovation.” IP is supposed to protect designers, inventors and authors against piracy. So, when an individual or company develops a drug or the component of a drug, IP will protect a foreign country from “pirating” that drug. Stiglitz argues that IP restricts knowledge and considers the restriction of knowledge to be a market inefficiency.
One study estimates a 5-17% decline in the generation of public knowledge in the genetics sector as a result of IP protection. Second, IP can result in monopolisation and thus distortion and inequality. Monopoly prices result in lower product utilisation among consumers, especially poorer consumers who do not have health insurance. Third are the blurred boundaries of what is and isn’t legally patentable, as in the Chakrabarty case noted above. One way to avoid these distortions would be to introduce a set licensing fee, which the US will not consider.
At the time of writing, there are no IP leaks from the big, proposed “free trade” deals of the kind that the Tories and Brexit Party are hoping to sign. Consider, then, Chapter 18 Intellectual Property of the existing Trans-Pacific Partnership, which Britain might sign, post-Brexit. Article 18.4(c), commits signatories to “foster[ing] competition and open and efficient markets.” Another states that while each party has the national right to determine what is an “emergency,” under which leasing rights can be waivered, it emphasises “public health crises,” indicating that anything less than a pandemic does not justify a government’s use of a patented product without licensing authorisation.
Another (article 18.13(g)) commits members to providing “technical assistance for developing countries.” Poor countries are thus likely to continue depending on the innovations of richer countries and being “assisted” in their developments of improved agriculture or genetics without actually being liberated. If the Philippines, for instance, allows a US drug company to open a lab under US-led foreign direct investment rules, the results could be patented and protected in the US. The drug could then be sold to the third world under an expensive IP licensing agreement, with US companies benefitting from less expensive Philippine labour and weaker health and safety regulations.
With US insurers, tech giants, and big pharma already eyeing up Britain’s precious National Health Service, it is imperative that if Britain leaves the EU, we do so in a way that safeguards against signing a deal that allows for these kind of practises. It is also imperative that working people see through the jingoism pedalled by the likes of Farage and realise that he and his colleagues are merely an extreme version of an already-entrenched elite, and not the working-class heroes they claim to be.
Dr. T.J. Coles is a postdoctoral researcher at Plymouth University’s Cognition Institute and the author of several books, including Human Wrongs (iff Books) and Privatized Planet (New Internationalist).