Bienvenido “Nonoy” Oplas Jr.

Pres., Minimal Government Thinkers, Inc.

Fellow, SEANET

Economic Expansion, Intellectual

Property and the TPP

SEANET and Property Rights Alliance (PRA) forum on

“Protection of Property Rights, Economic Growth and the TPP”

Park Royal Hotel, Kuala Lumpur, Malaysia

16 November 2015

OUTLINE

1. Economic and export gains of TPP membership, Dr.

Clarete’s study

2. BusinessWorld column re IPRI in APEC countries

3. IPR = expensive medicines. How true?

IPR provisions of TPP

4. Concluding notes

• Dependent variable: flow of trade between and

among countries studied

• Independent or explanatory variables, their expected signs or

relationships: GDP (+), population (+), dist. between two countries (-),

commonality of language (+), shared borders (+), landlocked state (-).

• In addition, TPP and RCEP indicators or dummy variables are

introduced: (a) TB1, 1 if both trading countries are TPP or RCEP

members, 0 otherwise, (b) TB2, 1 if exporting country is a TPP or RCEP

member, 0 otherwise; (c) TB3, 1 if importing country is a TPP or RCEP

member, 0 otherwise. For overlapping memberships, a dummy variable

where TPP*RCEP =1 if both trading partners are members of the two

trade blocs.

Dr. Ramon Clarete, University of the Philippines

School of Economics (UPSE), February 2015

He used the Gravity model of trade in estimating

the level of bilateral exports or imports between

two trading partners.

All estimated coefficients are statistically significant and bear the expected signs.

If the PH, RCEP member and it further becomes a TPP member – like Vietnam

and Malaysia -- its exports expected to rise by 48%, GDP projected to rise by 61%.

Economic Effects of

TPP membership

* Used computable

general equilibrium (CGE)

model of the PH

* Model comprises 50

industries/sectors; 3

primary factors of

production; 10 household

income groups, govt, priv.

business enterprises

* The estimated add’l

exports (above) inputted

into the model to compute

their economy wide

impacts.

* PH already with RCEP,

computing the gains if PH

also joined TPP….

My column today. Because Manila will host the APEC summit this week.

http://www.bworldonline.com/content.php?section=Opinion&title=propert

y-rights-protection-in-apec-economies&id=118660

• Gap in score bet. Singapore and low-ranked Vietnam very wide; Thailand, Vietnam

and Indonesia suffered significant declines in scores and global rank.

• Singapore and Malaysia managed to retain their high scores and global ranking.

• Philippines’ jump in global rank from 77th in 2013 to 65th in 2015. Reason, many

countries suffered significant decline in their scores from 2014 to 2015.

Lesson 1 (Clarete paper):

IF the Philippines, already RCEP member RCEP, joins the TPP – like

Malaysia, Vietnam, Singapore and Brunei:

Exports are expected to rise by 48%, real GDP rises by 61%, and all

households in general will enjoy higher real incomes, although

regressively.

Lesson 2 (IPRI in APEC):

Positive relationship between economic development and strength of

property rights protection. Top in ranking are New Zealand, Singapore,

Japan, Hong Kong, Taiwan, Malaysia.

IPR in TPP = expensive medicines, poorer public health. How true?

“IP rules proposed for the TPPA, if adopted, are

likely to prolong monopolies over new medicines

and delay the availability of cheaper generics.”

What the TPPA says?

TRIPS flexibilities are

affirmed (CL, special CL,

parallel importation…)

* More

patent

coop., not

exclusion.

* Only those

with

inventive

steps can

be patented

* Health

methods,

biological

processes,

animals,

can NOT be

patented.

* So, reduce

the 10-12 yrs

(out of 20 yrs

patent life) ave.

regulatory

approvals of

clinical trials to

drug

marketing.

* Regulatory

data protection

(RDP) not 10

or 8 years, only

5 years

* At least 8

years effective

patent life (bec.

10-12 yrs

patent life

already eaten

by clinical trials

& approvals)

Concluding Notes:

1. Joining the TPP has more gains than pains for member-countries,

especially in exports and overall GDP expansion.

2. IPR health provisions in TPP are not scary, they do not reduce access

to cheaper generic drugs. Existing TRIPS flexibilities are maintained.

3. It seems that the generic pharma lobby + the anti-capitalism, anti-

globalization NGOs created more noise and fear than what the TPPA

actually provides.

4. There is more to fear in government taxation of medicines, in

mandatory drug price discounts and price controls, than IPR protection.

“IPR create incentives for businesses to invest in ideas, to develop new

products, and to earn a profit from the sale of those products. This in turn

leads to improved customer satisfaction, improved profitability, and greater

employment opportunities.”

– Prof. Sinclair Davidson, RMIT Univ. (Econ Dept.), Melbourne, Australia.

Thank you.

Email: minimalgovernment@gmail.com

Blogs: https://ipinasia.wordpress.com/

https://seanet2.wordpress.com/

http://funwithgovernment.blogspot.com/

BusinessWorld column: “My Cup of Liberty”,

www.bworldonline.com/

SEANET: http://seanetwork.asia/