Bjorn Lomborg's new book detailing the results of the Copenhagen Consensus 2004 expert panel of world-leading economists is now out. For those of you who don't already know, the idea was to do a cost benefit analysis of potential solutions to major world problems and prioritise them accordingly. The experts have responded to the question: if we had an extra $50 billion to spend to improve the world, what should we do first? Here the panel unanimously recommends that $27 billion should be spent combating HIV/AIDS, $12 billion for malnutrition, that there should be free trade which will have very low costs, and that $13 billion should be spent combating malaria. This very original and innovative approach to global issues saw a Nobel prize laden panel of economists conclude that combating HIV/AIDS should be at the top of the world's priority list. 28 million cases could be prevented by 2010. The cost would be $27 billion, with benefits almost forty times as high. Spending assigned to this would yield extraordinarily high benefits. Although the costs are considerable, they are tiny in relation to what can be gained. Furthermore, the scale and urgency of the problem is extreme, especially in Africa where entire societies are threatened with collapse.

Hunger is number two on the expert’s list. Diseases caused by iron, zinc, iodine and vitamin A deficiency can be resolved by providing micro-nutrients. This would have an exceptionally high ratio of benefits to cost. The experts recommend investing $12 billion to resolve this problem. “Today 3.5 billion people lack iron. It is extremely important to do something about malnourishment, especially among children. I give that proposal a very high priority,” said Nobel Laureate Professor Douglass North, of Washington University in Saint Louis.

Free trade is number three on the expert list. The costs will be very low, the benefits will be extremely high – up to $2400 billion a year. “Free trade will benefit both rich and poor countries,” said Nobel Laureate Robert Fogel, University of Chicago. “Trade barriers do not require a big investment to produce a large return. Here, we need political will – and the return will be huge. The entire world’s economy will benefit from free trade, and more wealth will mean that we can afford to solve more of the world’s greatest challenges.”

Besides HIV/AIDS, malnutrition and free trade, options to ameliorate malaria and the lack of water and sanitation were highly ranked by the “dream team” of economists. The experts have in total discussed 38 possible solutions to ten of the world’s greatest problems. They chose to rank 17 of these solutions, as they found there was insufficient information on the others. They divided the 17 into “Very Good,” “Good,” “Fair” and “Bad” projects.

The Economist co-sponsored Copenhagen Consensus 2004. Deputy Editor Clive Crook, who took part in the experts’ meetings, said: “The starting point of Copenhagen Consensus is that the world faces many problems, and we cannot afford to solve them all, here and now. The positive message from the experts is that there are some extraordinarily good solutions. HIV/AIDS, malnutrition, trade barriers, and malaria – these are problems that can be addressed effectively."

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This Sunday's deadline for the finalisation of the Australia-US Free Trade Agreement may not be met due to continuing disagreement about Australia's legislative interpretation of the agreement, Trade Minister Mark Vaile said today. US trade representatives under pressure from Big Pharma's lobbyists are holding up the deal.

Mr Vaile said the FTA was supposed to come into force on January 1 and the agreement provided for an exchange of letters 60 days before that. He said he remained very confident the FTA would become effective on January 1 although he could not give an absolute undertaking. "We both remain absolutely committed to achieving that implementation date and I am very confident that we will, but certainly, we might not meet the deadline on Sunday of this week."

Mr Vaile said the government was holding discussions with the US over both the Labour party's FTA amendment on generic drugs and on concerns the US pharmaceuticals industry had over the governing Coalition's election promise to cut the drug prices when cheaper generic versions hit the market.

"On both counts obviously we are in discussions with the US with regard to our view in terms of impact on those issues," he said. "On the Labour amendments, we maintained from the outset that they were unnecessary because evergreening basically doesn't occur within our system. We are explaining (to the US) and making good progress on that - that these concerns are unfounded."

Evergreening is a process in which US drug companies continually lodge patents to prevent generic companies from marketing medicines more cheaply once the original patent expires. The practice is banned under the Australian Labour party's Senate amendment.

Mr Vaile said there would be no concessions to the US on the FTA. "We don't see any need to give any more ground to the US," he said. "We are not going to renegotiate this agreement. The negotiations are over. This is the technical implementation of those negotiated outcomes." Mr Vaile said the key issues of disagreement related to differences in interpretation of language and how that was implemented in law.

US Big Pharma corporations lobbied hard for caveats to the free trade deal to protect their interests. The political influence of the pharmaceutical industry in Washington means that they have succeeded in undermining free trade principles in many of the FTAs recently negotiated by Washington. Big Pharma is estimated to have spent $500m this election year on lobbying for its interests and as a consequence is rapidly succeeding in becoming paradoxically one of the most heavily taxpayer subsidised beneficiaries of corporate welfare, whilst at the same time being one of the most profitable industries in the US and globally.

The excessive influence of Big Pharma as problematic, not just because of politically bought subsidies, but because of its malign influence on the negotiating stance of US trade representatives during WTO and bilateral deal making. Essentially the Big Pharma corporations are aggressively protectionist. Countries seeking the wider benefits of a free trade agreement with the US are forced to accept protectionist measures written into the deal by the political allies of the Big Pharma corporations - whose election campaigns they finance - a system of political pay-offs that borders on corruption. The problems with the Australia-US FTA are a classic example of these tactics not only holding up an agreement, but endangering it altogether.