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Thursday, 5 August 2004
Page: 25749

Senator HARRADINE (12:20 PM) —A number of concerns about the effect of the free trade agreement were placed by various people before the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America. They included concerns about the economic, cultural and employment risks that may flow. It is difficult to accurately assess the beneficial and negative consequences of the agreement. I suppose the proof of the pudding will be in the eating, and I guess it is the responsibility of the government of the day to fully assess the costs and benefits to Australia generally.

I want to raise a couple of matters: one is to do with treaties and how the parliament is not able to deal effectively with treaties and the other is about intellectual property. I have had a great concern for most of my 29 years here in the Senate about the process whereby governments commit Australia to international agreements and treaties. Indeed, as far back as 1983 I gave notice to the Senate, through a notice of motion, about appointing a standing committee of the Senate—to be known as the Senate Standing Committee on Treaties—to consider all treaties put before the Senate. That was in 1983. It was not until 1996 that this actually happened in response to the Senate committee report Trick or Treaty?

I should acknowledge that the Joint Standing Committee on Treaties reported on the Australia-US free trade agreement in June. But I am still concerned about the process by which these international agreements are arranged. I agree with the Senate committee that there is a lack of transparency and involvement of parliament in this process, as we only get involved after the deal has been done. It becomes in effect a take it or leave it situation. I do not think that is proper parliamentary accountability. I will be interested to hear the government's response on that matter but also on intellectual property.

Patents have been an issue of concern to me for many years. Other senators more recently have expressed concern, for example, at the push for genes and gene sequences to be patentable. One of my concerns was whether the FTA would impact on section 18(2) of the Patents Act, which says:

Human beings, and the biological processes for their generation, are not patentable inventions.

I will be asking the government about this matter during the committee stage. In a recent estimates committee I did raise the matter and was informed in writing as follows:

The proposed free trade agreement with the United States does not affect section 18(2) of the Patents Act 1990. Article 17.9.2 of the Australia-United States Free Trade Agreement allows Australia to exclude inventions from patentability where necessary to protect public order or morality, including human, animal or plant life. Section 18(2) of the Patents Act falls within this allowable exclusion.

That is some reassurance, but I note again the general concern that the widespread changes introduced by the FTA may have unintended or unanticipated consequences.

In an estimates committee hearing last year, I raised with IP Australia the issue of the patentability of human beings, the biological processes for their generation, the issue of human embryonic stem cells and whether they are patentable. An article in the Journal of Law and Medicine headed `The attack of the clones: patent law and stem cell research' by Dr Matthew Rimmer states:

... there is a fundamental ambiguity in the Patents Act 1990 ... as to whether stem cell research is patentable subject matter. There is a need to revise the legislation in light of the establishment of the National Stem Cell Centre and the passing of the Research Involving Human Embryos Act 2002 ...

Given the very strong push for commercialisation of all research, which will be bolstered by the FTA, I imagine there will be pressure from the United States for the patentability of human embryonic stem cells or material derived from these cells. It goes to the very heart of human nature and the dignity of each individual human being. I need to have answers about those matters when we come to the committee stage of the debate.

IP Australia advised last year that it remains unclear exactly what inventions would be excluded from patentability by section 18(2) of the Patents Act. The minister should come clean with all of this. I will be asking the minister to explain to me what effect the free trade agreement would have on the patentability of human embryonic stem cells. I do not want any of the `it's commercial-in-confidence' business that we were faced with in the estimates committee. This stem cell centre, which is a private company, has been given about $100 million of taxpayers' money, and a significant amount of that is for experimentation on human embryos.

I note that Dr Philippa Dee's report to the Senate select committee estimated that Australia could end up paying 25 per cent more per year in net royalty payments. What is the benefit to the Australian community from a closer harmonisation of intellectual property laws between Australia and the US when that will result in longer patent times and higher costs for Australians? I should also say that, while patents and copyright are important to help to pay patent and copyright holders for the important development costs, risks and talent, the FTA appears to take on many of the excesses of US patent and copyright law.

Patents or copyright, in effect, give a person a monopoly over a particular idea or process. In this sense, it is ironic that apparently we are awarding longer monopolies and more stringent systems of fines in a free trade agreement. For example, I understand that US copyright for an author was recently extended from the life of the author plus 50 years to the life of the author plus 70 years. That seems excessive to me—it is obviously of little assistance to the author. Are we to have that in Australia too? If we are serious about a competitive economy, why would we be increasing these monopolies and the associated costs of licence fees and administration?

The United States is often seen as the exemplar of free trade and competition but, under their more expensive intellectual property restrictions, we are in fact being persuaded to pay them more royalties for no real return. It is in the interests of the US to persuade the rest of the world to keep paying them licence fees and royalties in perpetuity for copying, viewing, listening or whatever, but it is not in our interests.

In principle, I am in favour of free trade as long as Australia does not lose out, but the intellectual property parts of this agreement seem to be taking us to a more restricted, less competitive and more expensive environment. I am also concerned about how much of the US intellectual property system we have to take on as part of the FTA. Do we have to accept the validity of all US patents and apply them in Australia? Will we have to extend or change Australian IP laws every time the US Congress changes US laws in this area?

I am also concerned about the effect of the freer access of US capital to Australian markets. Will this lead to a further increase in Australian housing prices, making it even more difficult for Australians to afford a home? Would it mean that privatised utilities—the basic infrastructure of Australia—such as water and electricity et cetera are sold off over time to United States interests? These are very important questions that need to be dealt with thoroughly by the government in the committee stage of the debate. Again, I acknowledge that I am generally in favour of free trade so long as there is no concern remaining about the effects of the measures that I have mentioned. Again, I look forward to the committee stage and the full answers to be provided by the minister at that time.