(TheAustralian) Bush may reject trade deal

Submitted by Editor on Fri, 13/08/2004 - 19:56

LABOR'S plan to protect cheap medicines under the US free trade deal has finally been accepted by the Government but John Howard has raised the spectre of Washington resisting the key amendment.


By Steve Lewis

August 13, 2004

Determined to win parliamentary approval for the FTA, the Prime Minister said yesterday he would back Mark Latham's amendment protecting generic drugs - delivering the Opposition Leader a significant pre-election victory.

But the concession came with a barb. Mr Howard warned that Labor's proposed changes to patent laws may breach international covenants on intellectual property.

Mr Latham questioned whether Mr Howard had a secret understanding with the Americans over the future of Australia's Pharmaceutical Benefits Scheme.

The FTA was expected to pass the Senate either last night or today after a marathon debate, with the Greens and Democrats maintaining their strident opposition to the trade pact.

Its future will then rest with the US. Senior figures in the Bush administration are known to have "real concerns" over the Labor amendments and believe it will take some time for US lawyers to determine if they breach the terms of the agreement.

Under the deal, the two governments are due to exchange letters by October 31 to enable the agreement to come into force by January 1.

Buoyed by Mr Howard's acceptance, Mr Latham claimed Labor had protected the national interest by insisting on the FTA amendments.

"The truth is the Labor Party has nailed this Government flat to the floor," he said.

But Mr Howard said legal advice to the Government suggested Labor's amendments - designed to stop multinational drug companies from using shonky patent applications to stop cheaper medicines becoming publicly available - contravened two FTA provisions.

While conceding these issues were "mind-numbing and technical", he said US Trade Representative Bob Zoellick had pointedly reserved his right to review the final Australian legislation.

"Now I'm not telling you it's going to fall over. What I'm telling you is there is a possibility of a difficulty," Mr Howard said yesterday at one of several press conferences on the FTA.

He said the Government had decided to support Labor's amendments as the "commonsense thing to do".

"But I warn ... that the enabling legislation could be construed by the Americans as inconsistent with the free trade agreement."

The Government's scare campaign received short shrift from Mr Latham, who revealed the Opposition had held talks with the Americans and received no warning the amendments might be illegal.

"We are just giving you the assurance that, in having these conversations, nothing was conveyed to us which would jeopardise the FTA," Mr Latham said.

The FTA is scheduled to come into force from January1. The Government predicts it will generate much higher flows of investment between Australia and the US, and give Australian producers greater access to the world's biggest economy. But critics of the deal - including many in the Labor caucus - claim the Government has exaggerated the benefits.

AMA vice-president Mukesh Haikerwal welcomed the deal between the Government and the Opposition. "This is a sensible resolution."



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