I want to add my name to those who have written to you expressing our concern about the possibility that the NDP might endorse the CETA agreement.
This agreement is primarily about limiting the public policy options of government. It is not fundamentally about lowering tariff barriers as these are already quite low. Rather it is about enhancing investor rights. It is also about further entrenching the intellectual property regime that has led to such major increases in Canada’s pharmaceutical prices since Brian Mulroney abolished compulsory licensing in 1987 and 1992 with Bills C22 and C91.
Since the Canada-US Free Trade Agreement (FTA) there have been no significant social democratic advances in Canada. Both provincial/territorial and federal governments have had to formulate policies within the straitjacket of NAFTA, other FTAs, Bilateral Investment Treaties (BIITs) and various WTO agreements, all of which are premised on a neoliberal economic paradigm designed to reduce the influence of governments, privilege markets and ensure that the interests of investors will take precedence over all other public policy considerations. Neoliberalism is antithetical to the fundamental principles of social democracy.
On the issue of drugs, as the study by Hollis et al (attached) demonstrates, the extension of patent protection for up to an additional five years will increase our drug expenditures by about $2.8 billion, annually. This will place a major additional burden on NDP and other provincial governments who are struggling to control the cost of their provincial drug plans. It will also hurt patients who cannot afford their drugs. Most of this money will simply leave Canada as the companies receiving it are multi-nationals based either in Europe or the U.S.
We already have a very large balance of payments deficit in drugs and this will make it even worse. (see the studies by Joel Lexchin and others on this issue.) Moreover, due to the most favoured nation provisions of NAFTA, U.S. drug multinationals will get all the benefits we might give to their European counterparts — in other words they will get a huge ‘free ride’ on whatever Harper gives to the Europeans.
It is also worthwhile to remember that the Federal Government pays only about 5 per cent of Canada’s drug bill — the rest is carried either by individuals through out of pocket or private employer funded drug plans or by provincial public plans. In other words the federal government is able to implement a policy in which 95 per cent of the costs fall on others.
This is a perverse incentive as it isolates the federal government from the full consequences of its trade decisions. Before the Canada-U.S. FTA, Canada had the lowest pharmaceutical costs in the OECD due to our 1969 legislation that expanded the use of compulsory licensing.
Now, thanks to Mulroney’s decision to abolish compulsory licensing and his endorsement of NAFTA’s Chapter 17 with its 20 years minimum patent protection (and various other enhancements triggered by subsequent industry lobbying and trade complaints), we now have the second highest costs in the OECD. Is it our goal to have the highest? With this agreement, there is a good chance that this will happen. How giving billions of dollars to the multinational pharmaceutical industry will benefit Canadians is a question for which there is no satisfactory answer.
Many of us have been critical of the overall free trade agenda (aka neoliberalism) since the mid 1980s. It has not delivered a better life for most Canadians despite the propaganda from the Canadian Council of Chief Executives and others representing corporate interests.
As you know, the standard of living of average Canadians has not risen over the past 30 years, while those at the top have seen an enormous increase in their assets and incomes. This is a result of the neoliberal policies, including free trade, of our recent Conservative and Liberal federal governments.
The CETA agreement is not about trade. It is about further limiting the ability of governments to implement policies that conflict with corporate interests. It is about extinguishing some of the last policy tools governments still have to protect the interests of ordinary Canadians. It is about ensuring that social democratic policy initiatives will be precluded from the policy options of future governments.
I do hope you will continue to maintain the NDP’s longstanding policy of opposition to new trade and investment agreements and am writing to urge you to continue to oppose CETA.
John Calvert
Vancouver, BC
Photo: Canadians.org
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