The Trans Pacific Partnership (TPP), a proposed free trade agreement (FTA) involving Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam, is creating both anticipation and anxiety among its members and other third parties. TPP began as an expansion of the Trans-Pacific Strategic Economic Partnership Agreement between Brunei, Chile, Singapore, and New Zealand, but from 2008 other eight countries have joined the negotiations while several others have shown interest in incorporating. To join negotiations, prospective members must prove to be committed to the goals of the treaty and must be approved by a consensus of the current members. Mexico was invited to participate on June 18, 2012, during the G20 in Los Cabos. While negotiations were meant to finish in 2012, this treaty is still being discussed to this date due to the sensitive nature of some of its topics. One of the reasons for this controversy is the fact that, unlike several other trade agreements, the negotiations for the TPP have been performed behind closed doors thus the public only has minimal information available. As negotiations have extended beyond expectations, several members are introducing strategies to streamline the process. For example, US President Barack Obama has put TPP on the US Senate Fast Track which will allow for a faster resolution, be it approval or rejection. A concern of this move is that it does not allow for the revision and modification of individual policies within the TPP.

TPP_map

 

The TPP envisions eliminating tariff and nontariff barriers to trade and harmonizing trade agreements among members. Many believe it to be a mayor opportunity for Mexico. Luis Roberto Abreu, president of the National Association of Mexican Importers and Exporters (ANIERM), praised the potential of the TPP to open new markets, mainly with Australia, Brunei, Malasia, New Zealand, Singapur, and Vietnam, with which Mexico has no current FTAs and few exports. The TPP also aims to strengthen patents and the exclusivity of medical data, which prevents regulatory agencies from registering generic versions of drugs for a determinate number of years.  Mexico is currently part of the North American Free Trade Agreement (NAFTA) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), both of which enforce exclusivity of medical data and protect it from unauthorized replication for five years but they are not strongly enforced. The TPP aims to strengthen current patent law and its enforcement by adding additional intellectual property (IP) protection mechanisms, including patent linkage, extensions on patent life or compensations due to regulatory delays, and data package exclusivity for new compounds. Also, the US is currently promoting a 12 year data-exclusivity on biotechnological drugs. Some parties, including Partner at Olivares Alejandro Luna Fandiño, believe that this treaty will allow for the growth of the Mexican Life Sciences industry. Since the TPP promises strong IP protection, it can stimulate local R&D and the introduction of innovative medicines into the country by international companies.

 

Impact on local industry

On the other hand, the TPP raises several controversial points as its regulations also influence local economic activities including government purchases and IP protection. Another concern is that, by stimulating trade among its members, countries that currently trade with Mexico may shift their trade to other members of the TPP thus reducing Mexico’s exports. The TPP is raising strong concerns on healthcare, as its application could potentially impact many health policies especially in developing countries. One of those policies relates to the patent of pharmaceuticals. Dr. Suerie Moon, Research Director and Co-Chair of the Forum on Global Governance for Health, recently spoke on Vector Pharma 2015 on the potential dangers this treaty could bring to developing economies, especially in the matter of health. This fear is shared by other groups including Doctors Without Borders and Oxfam International. Current World Trade Organization (WTO) regulations state that patents last for 20 years, but new regulations introduced by the TPP such as patent linkage and data-exclusivity could potentially expand this timeframe, placing a great burden on the manufacture of generic and biosimilar medications. These measures would negatively affect Mexican manufacturers of those medications, which would have to either remove products from the market or delay their introduction. Patients in developing countries would also be heavily affected by these measures, since generics can represent up to a 90% cost reduction in comparison to a patented medicine. Therefore, patients in developing countries depend on these reduced prices for acquiring life-saving medications and their disappearance from the market can have catastrophic effects on their lives. Another considerable effect would be “investor-state dispute settlements” which will allow private companies to sue member countries for damages if they estimate that future profits may be affected.

With no final date (formal or informal) for negotiations in sight, the TPP is still undergoing alterations and many topics are still on the table. Many groups are still concerned about the implications of the TPP on developing and developed economies but there is still room for negotiation on several of its points, thus there is still time for all sides to discuss controversial topics and generate agreements that will be beneficial for everyone.

 

This post is an excerpt of Mexico Health Review 2015, to be released in September 2015. To pre-order your copy now visit www.mexicohealthreview.com. Please direct all media enquiries to jc@mexicohealthreview.com.

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