Speaker by Various Artists

Poisoning the Pork

by Mark Broatch

Economics. No, no, wait. My interest in the subject, like most people, lies mostly in the effects of financial theories on your common and garden citizen, ie me.

My contribution to a BBQ conversation on such a topic might amount to questions such as why, when we're being encouraged to save for our retirement rather than speculate wild-eyed in investment properties, are savings taxed but capital gains not? Or why is my credit card company increasing the percentage of its fee for processing foreign transactions? Because they're doing more than ever, I was told. Forgive me, but surely that's the point of margins: 1% of 100 is good but 1% of 1000 is better, so upping your sales is the goal? Of course, 1.5% is much more better. Greed is indeed grand.

I feel similar misgivings whenever numbers and promises are mentioned in the same breath. Like when news came last week that Australia had signed a "free trade" deal with the US.

The media's thankfully generally painting it as a Clayton's agreement, the free trade deal you have when you don't have a free trade deal. Lower tariffs on Australian manufactured goods and an opening up of markets in agriculture, primary produce and the like. Of course, Australia, er, sugared the deal for the Americans by ring-fencing some industries and allowing for long lead-in times in others.

Still, they agreed to some things. As I turn over the chicken and call for my third glass of the supermarket special sauvignon, I might throw in the hubbub a few curve-balls, whatever they are non-figuratively speaking.

First of all, why has free trade taken on a kind of neo-hippyish vogueness, as if free trade were akin to free speech, and we are unshackling ourselves from the yoke of some new political oppression? The truth is, while it may (big emphasis) boost the Australian economy by $A3 billion a year, perhaps $A160 million for farmers in its first year, the deal's about political expediency. Don't come back without a deal, the trade reps were told. And this is the absolute best they could do in an election year for George W.

What's the real price, though, of such a deal for New Zealand? We can have none of the sway and swagger that a 20 million population-strong sabre-rattling mate of the US can bring to the table.

Even in Oz, film and TV types are worried about whether local quotas will survive the FTA. "Both sides are claiming victory; it makes us very nervous," Australian Writers Guild Megan Elliot told The Australian. Given how little local stuff appears on screen here, perhaps US TV networks will take pity on us in the wake of a free trade deal and offer to fund some. On the other hand, fewer homegrown reality TV shows? Oh dear, how sad.

What about drugs, I hear you ask. Australia's Pharmaceutical Benefits Scheme, something like what Pharmac does here, is under threat. Under the FTA, massive US drug companies have won a right to review decisions made by the PBS advisory committee. Some worry that they will successfully lobby to have their patented drugs subsidised rather than cheap generics and the cost to the public may rise. This bulk-buying of common medicines is a mainstay of public health systems across the developed world, but the pharmaceuticals lobby thinks it is a protectionist menace. Just "a few tweaks" of Australia's patent laws could banish low-cost generic drugs from existence.

US lawmakers are on to the high price Americans pay for drugs. The Guardian cites a letter by 17 members of Congress: "We are deeply opposed to the trade office being used by the US pharmaceutical industry to achieve its strategic objective of raising worldwide drug prices to the level now paid by US consumers." The US government has pledged to scrutinise such "protectionist" schemes. Says The Guardian:

It shows how far the debate has drifted when you think that Washington once spent its time trying to lower the costs of the one in four prescriptions that are not filled because US citizens cannot afford to buy the medicines they need. Now, the problem is seen to be not high prices at home, but low prices overseas.

Speaking of patents and intellectual property, another thing that was won for the US was changes to Australian copyright law. The FTA now promises stronger protection for copyright holders. They will be able to use "an expeditious process" to order ISPs to take allegedly infringing material off websites they host. They can now demand harsher penalties for cracking technological protection of material. Copyrights can be extended even further, violating the notion that artists are handed a temporary monopoly to get some payback for their hard work before public interest demands access for further innovation. Bring on the DCMA, or not.

Stanford prof Lawrence Lessig argues that the US has demanded, through a series of trade agreements:

…stricter protection for intellectual property internationally than US law would allow domestically. (Fair use, for example, is mandated by our constitution but invisible in these agreements.)" When the US was poor, it stole the intellectual property of Dickens and other artists without paying for it.

"We didn't call it stealing, but they did. We called it a sensible way for a developing nation to develop. Eventually, we saw it was better to protect their rights as well as ours -- better because we had rights to protect elsewhere, too. But we only imposed this burden on ourselves when it made sense to do so. Until 1891, we were a pirate nation.

Things have changed. Now that we're the world's leading exporter of intellectual property, we're also the most self-righteous about the importance of protecting it globally. Indeed, we can be vicious in our self-righteousness -- threatening trade wars with developing nations for the crime of being just like us.

Countries should enforce US copyrights only when the US stops massively subsidising its other industries, argues Lessig, increasing the coverage as it decreases the size of its pork barrel. Fat chance.