The US/Malaysia Trade Pact

05/25/2011 11:50 am ET
  • James Love Director, Knowledge Ecology International

The United States is considering a new trade agreement with Malaysia, a country with a rising middle class but also a significant number of poor persons, particularly those living in rural areas. In all similiar agreements, the Bush Administration's US Trade Representative (USTR) has sought measures that increase drug prices, mostly through tough intellectual property rules that go considerably beyond the obligations in the World Trade Organization (which are already pretty tough). The USTR has asked for public comments on the negotiations. People have until May 12 to file comments (See instructions here. I filed these comments on Friday, asking that the USTR change its approach to something more positive -- a chapter on Access to Knowledge (A2K). Jamie

21 April 2006
Testimony of Consumer Project on Technology (CPTech) on the proposal to negotiate a Free Trade Agreement (FTA) with Malaysia.

CPTech proposes a chapter in a US/Malaysia FTA on Access to Knowledge (A2K). This framework is a different and we believe a better treatment of issues that have been addressed in chapters on intellectual property rights in previous FTA agreements that the United States has negotiated with other countries. We have addressed these topics previously in our March 27, 2006 comments on the US/Korea FTA agreement, which are attached below.

The general approach that CPTech presents is to shift the focus of the trade negotiations from ever-higher standards for intellectual property protection to an agreement that promotes research and development, the production of public goods, and access to knowledge. We believe this new trade framework has greater benefits for US Citizens, and will also be received more warmly by Malaysia than the traditional US demand for tough intellectual property rules on medicines and other knowledge goods.

We note that Malaysia is a signatutory of the WTO TRIPS agreement, including the 2001 Doha Declaration on TRIPS and Public Health, and it is already struggling with its TRIPS obligations, in the context of protecting access to medicines. There is no justification for advocating trade agreement provisions in Malaysia that would increase the prices of medicines. There are, however, compelling reasons to ask Malaysia to make appropriate contributions to support medical R&D and global public knowledge goods, particularly if Malaysia can do so in ways that contribute to its own development and which address issues of particular concern to Malaysia.

The United States is the largest government funder of R&D on tropical diseases, including diseases that present very serious problems in Malaysia. Like the US, Malaysia is concerned about emerging public health threats like SARS or Avian Flu. Like the US, Malaysia is struggling to find affordable treatments for AIDS. The United States is often seeking partners in tasks such as the HapMap Project or the Human Genome Project. The United States is funding countless research endeavors involving the creation of databases, publishing and translating academic science, the building of tissue and other materials libraries, and many other things, some of which generate valuable intellectual property rights, and others that enter the public domain. These are expensive, and paid for by US taxpayers.

If the United States proposed that the US and Malaysia together should discuss areas where Malaysia could itself increase its contributions to and participation in research and development in areas of health care priorities, Malaysia would likely see this as a favorable alternative to the TRIPS+ rules the United States has obtained in other trade agreements. Since high drug prices in the Malaysian economy are likely to lead to rationing of access to the economic elites in Malaysia, they are also unlikely to generate much in the way to new R&D, particularly for areas of medical priority. An agreement to support priority medical research would very likely provide greater benefits to US citizens in terms of improved health care outcomes or lower taxes than would an agreement that ensured that Pfizer, Roche, GSK or other companies stronger (than required by TRIPS) marketing monopolies.

If the point of trade policy is to strength the marketing monopolies for a handful of global pharmaceutical multinational firms, than the TRIPS+ provisions make a lot of sense. But if the point of the trade policy is to advance the interests of everyone in the United States, there should be a willingness to consider alternatives, particularly given how much resentment the TRIPS+ agreements are generating toward the reputation of all US citizens and businesses, and how little they actually generate in terms of new R&D in areas where it counts.

Other suggestions for how an A2K Chapter might work are elaborated in the attached testimony on the US Korea FTA negotiations.

James Love