Thank you very much and thanks for the opportunity to address you from the rather lovely city of Trondheim, Norway.
I direct the globalization and health equity research unit at the University of Ottawa. We recently completed a two-year health impact assessment of the Trans-Pacific Partnership agreement. I'm going to speak to a few of our findings.
First, the TPP's impact on the cost of pharmaceuticals has received considerable attention. I know the committee has already heard from Dr. Joel Lexchin, whose earlier work on CETA's patent term extensions estimated the drug costs in Canada by 2023 could rise by between $2 billion and $3 billion, without guaranteeing any therapeutic gains.
The TPP locks in these provisions while also loosening requirements for evergreening of patents. It's important to put this into the context that meanwhile, a UN high-level panel is calling for new models for the development of health technologies and drugs that go beyond patent regimes to better balance trade and industry interests with human rights and public health concerns. So increasing pharmaceutical patent provisions appears to be somewhat out of step with these other multilateral discussions on ensuring access to life-saving drugs.
Second, although the TPP does not significantly change the single-payer model of the Canadian health care system, there are new risks. Canada already liberalized private health insurance under the GATS and under NAFTA, so should Canada extend public health insurance monopoly into areas where foreign-invested private insurance has interests, this could trigger a dispute. The TPP adds to this risk by extending investor-state rules to a much larger number of foreign investors and exposes claims over private health insurance to the rather controversial FET provisions in ISDS, which are not part of NAFTA, at least not part of NAFTA's financial services chapter.
Investor health insurance related claims against other countries have actually already occurred and succeeded under bilateral investment treaties with similar provisions to those in the TPP. While it's true that Canada's annex II social services reservation could offer protection against such an investor suit, this would very much depend on the tribunal's interpretation of that reservation.
Third, and an important public health gain, is that the TPP does allow a voluntary exclusion from investor-state claims against tobacco control measures. This exclusion does not apply to state-to-state disputes that could arise following pressure from tobacco interests within TPP member nations, nor does it prevent tobacco transnationals from using other investment treaties, such as NAFTA, to launch investor-state claims against Canada over new tobacco control measures, which could include Canada's commitment to plain packaging.
The exclusion nonetheless importantly signals that TPP governments were concerned with the potential impact of ISDS provisions on public health regulations, which really begs for us the larger question: Why was this exclusion not extended to all non-discriminatory public health measures a country might adopt, especially given the impact of other globally traded health-harmful products, such as ultra-processed foods and alcohol?
Fourth, the TPP creates new barriers to regulate these health-harmful commodities. New provisions in its SPS and TBT chapters could weaken use of the public health precautionary principle, which is applied when there is insufficient evidence for a scientific consensus on health risks, and at the same time require TPP parties to ensure that any new regulatory standards do not create unnecessary obstacles to international trade. These provisions could strengthen trade interests over efforts to regulate for consumer, public, and environmental health. The TPP also creates avenues for vested corporate interests to influence the development of such standards.
TPP governments have responded to some of these concerns by pointing to the TPP's health exceptions. These include the use of the WTO's GATT article XX(b), which allows governments to enact measures necessary to protect human health, amongst others, that are not judged to be unjustifiable discrimination between countries. This is an important exception, but so far, it has only been successful in one of 43 cases, with most of the cases failing on the necessity test, meaning that dispute panellists believe there were less necessary options in terms of trade that could have been pursued.
The general exception in the ISDS chapter similarly allows parties to adopt measures to achieve environmental health or other regulatory objectives, but quickly adds that this is only if these are otherwise consistent within the chapter.