The Labour Party says government-run Pharmac should be non-negotiable in any free trade deal with the United States, but does not believe the US has the negotiating strength to impose changes to the pharmaceutical product subsidiser under Trans Pacific Partership (TPP) talks.
Concerns are mounting in New Zealand that Pharmac could be on the block after 28 US Senators wrote to President Barack Obama saying the US should pressure governments about drug-buying bodies in any free trade deal with other nations.
But Labour leader Phil Goff said on Monday afternoon he did not think the US has the strength to make New Zealand change the Pharmac model.
“Pharmac is an absolute bottom line. We should not be trading Pharmac off for a free trade agreement for the United States and the wider [TPP] group," Goff, who is a former Trade Minister, said to media in his weekly press conference.
"I don’t believe, actually, that there is the negotiating strength by the United States to impose that on us. It is crazy - it [demanding changes to Pharmac] is not about free trade at all, it’s something that the big pharmaceutical companies want," Goff said.
"That is a bottom line, New Zealand should not be trading it away.”
Goff said he was very proud of his achievement of signing up to the TPP when he was Trade Minister.
“I am in favour of the free trade partnership that is being negotiated [with the US]. But every country has bottom lines. There are things that the United States will not do, equally there are things that New Zealand will not do, and trading off Pharmac is one of those things," Goff said.
“There’s no philosophical justification for it, there’s no requirement or precedent in terms of negotiating trade agreements,” he said.
Weakening or getting rid of the Pharmac model was something the big US pharmaceutical companies held as important to them, and therefore the United States would have to go through the gesture of supporting their claim, Goff said.
“But for New Zealand, the value of Pharmac is very clear: We should not be trading it away, and I don’t believe that it’s the requirement of a free trade agreement to do that.”
From time to time, American interest groups had complained about Pharmac, as well as “what they they say is Fonterra’s monopoly position,” and a range of other things, Goff said.
“Those are negotiating positions. You expect sides to take a negotiating position. But they know that they won’t be getting everything they’re asking for, and that’s one thing they should not get,” he said.
It would also be very hard to reverse a decision once a free trade deal had been negotiated without unravelling the whole agreement.
"That’s why a bottom line of this government, and Labour has made its viewpoint very clear, [should be] that Pharmac should not be traded off in the interests of the free trade agreement,” Goff said.