Fair dinkum or collywobbles? Life sciences and the Australia – UK free trade agreement
“Fair dinkum – (adj, Australian informal), true, genuine, authentic”
“Collywobbles – (noun, UK informal), an uncomfortable feeling in the stomach caused by feelings of nervousness or slight fear”
News that the Prime Ministers of the United Kingdom and Australia have signed an in-principle agreement on the broad outline of the proposed Australia – UK Free Trade Agreement has prompted debates about whether the announcement was a bang or a whimper.
Beyond the photo ops and swapping of Penguin and Tim Tam biscuits between the two PMs in London this week, much of the focus of the announcement and media coverage has been about agricultural products and labour mobility.
If you’re a shearer looking to work two seasons a year shearing sheep in Australia and the UK, this is the FTA for you.
However, we haven’t actually seen the text of the Agreement, and probably won’t until the end of 2021. Much of the detail still needs to be finalised by all accounts.
Beyond the biscuits, the livestock, the whiskey, the wine and the young Aussie and British backpackers now getting to party longer and harder on working holidays in each other’s countries, there are some broader implications from the proposed Agreement.
To be clear, the economic implications for the UK, at least, are pretty minimal. The UK Government estimates the FTA will boost its economy by … wait for it …. 0.01% to 0.02% after 15 years.
This FTA on its own isn’t going to be driving Britain’s post-COVID, post-Brexit economic recovery.
As yet, Australia hasn’t released an estimate of the economic impact.
However, the Agreement will help heal the rift left when the UK abandoned preferential trading arrangements with Australia when it entered the European Common Market (the precursor to the European Union) in 1973.
(I spent the early part of my professional career as an economist in Canberra still hearing old-timers in the Australian government talk about how the UK had ‘turned its back’ on Australia.)
But there are broader implications from the Agreement for the UK.
It’s the first trade agreement that will be negotiated post-Brexit as part of the UK’s ‘new dawn’ of engaging with the global economy after leaving the EU.
Both the Australian and UK governments have argued that this is a ‘gold standard’ trade agreement which, for the UK in particular potentially sets a precedent for how it will approach bigger and more complicated trade negotiations with the likes of the United States and the EU.
Perhaps just as importantly, it increases the likelihood that the UK will start negotiations to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), something the UK Government has already applied to be part of earlier this year.
Both Australia and Japan, already members of the CPTPP, have indicated support for the UK joining that trade agreement.
Pharmaceuticals and life sciences, anyone?
There’s been little mention in the recent coverage of any measures between the two countries to do with pharmaceuticals and life sciences. Which is a pity.
As I’ve written before, there are significant opportunities for Australia and the UK to collaborate on the discovery, development and manufacturing of medicines, vaccines and new emerging therapies.
Australia, for example, has the opportunity to build its global presence in medicines, vaccines and advanced therapies in a post-pandemic world.
The lack of commentary on these topics probably stems in part from the political bruising both Australian and UK governments have experienced over the years when the issue of health care has arisen in negotiating free trade agreements.
A few years back the UK had issues when former US President, Donald Trump, initially floated the idea that the National Health Service was ‘on the table’ in future trade negotiations.
And the Australia-US Free Trade Agreement (AUSFTA) nearly didn’t get through the Australian Parliament in 2004 due to amendments to medicines policy that former Federal Opposition Leader Mark Latham (and now One Nation MP) insisted on at the time as a condition of passing the implementing legislation.
Even today, there are people still claiming that Australia’s Pharmaceutical Benefits Scheme was “considerably disrupted” by the AUSFTA.
As someone who was directly involved in many of the negotiations with Australian governments on PBS reform over the years since then, I can tell you categorically that that claim is absolute bulldust.
It’s bulldust, but some people still manage to squeeze a few more academic publications out of it from time to time.
In fact, most of the changes to the PBS out of the AUSFTA were improvements that improved the transparency, efficiency and timeliness of the process for funding medicines in Australia.
Opportunities in life sciences and pharmaceuticals
If the critics can look past their blinkers, a new FTA between the UK and Australia might actually form a positive platform for both countries to build new strategies and agendas to build manufacturing and scientific capability in medicines, vaccines and advanced medical therapies in a post-COVID world.
Areas like regulatory reform, investment collaboration, venture capital investment, research collaborations, international industrial strategies, production licensing and alliances, joint action on worldwide abolition of medicines tariffs through the WTO, positive dialogue on best practices in reimbursement and funding of medicines and vaccines, pandemic preparedness and, yes, even best practices in science, technology and intellectual property could all be good outcomes for both countries from the Agreement.
It could make a nice change from talking about cows, sheep, alcohol and backpackers (the combination of which makes the mind boggle ….).
Yes, there may be a few issues to resolve along the way.
Australia’s minimalist 5 years of data protection for clinical trial data for new medicines, vaccines and therapies is looking increasingly out of step for a developed country wanting to grow its own life sciences sector.
With the US having up to 12 years, the EU up to 11 years and Japan and Canada both at 8 years, Australia may have to have another look at this.
There are real opportunities for both Australia and the UK in a post-COVID world to collaborate in developing their respective life science and healthcare sectors.
Both countries have strong publicly funded health systems, both say they value developing and using innovative new medicines and vaccines, and both have a strong tradition of excellent medical science and developing medical technologies.
Talking about this stuff would be a nice addition to the meat, biscuits and whiskey that’s been talked about so far.
We’ll have to wait and see if we get serious about doing something smart to develop new medicines and vaccines for the future.