US led hard core resists easing TRIPS for public health

by Chakravarthi Raghavan

Geneva, 20 Sep 2001 - Consultations are to continue at the World Trade Organization and its TRIPS Council on a Ministerial Declaration on TRIPS and Public Health, after a day-long discussion at a Special Meeting where a group of nearly 50 developing countries have presented a draft for affirming the right of countries to take actions for protection of public health and nutrition, and a hard-core group led by the United States against such a public health view, and seeking to confine any declaration to the HIV/AIDS pandemic.

The group of developing countries presented a comprehensive ‘non-paper’ for a ministerial declaration affirming the right of countries to take actions in furtherance of public health and nutrition by way of compulsory licensing and other actions, without fear of being challenged by trade disputes at the WTO, and for the TRIPS provisions to be guided and interpreted by the overall principles and objectives of the Agreement (in Articles 7 & 8).

The United States, Switzerland, Canada, Australia and Japan countered with a draft which has pre-ambular paragraphs limiting the scope of any declaration to meeting the HIV/AIDS pandemic, and the five promising to put forward by Friday operative paragraphs for their draft.

The discussions, chaired by a vice-chairman, Amb. Alexandro Jara of Chile (in the absence of the Chair, Zimbabwe’s ambassador Boniface Chidyausiku, away in Abuja for the African trade minister’s meeting) also showed an EU seemingly more flexible, and willing to consider in principle some flexibility on essential medicines and public health in regard to patents, compulsory licensing etc, but opposed to any declaration also embracing nutrition.

The EC entered an additional caveat that the consideration of the issue in the TRIPS Council, and a possible Ministerial Declaration at Doha, should not result in any further work programme at the WTO on the issue.

[In introducing the draft paper Wednesday, Zimbabwe’s Minister Counsellor Tadeous Chifamba, made some oral corrections to the draft (see #SUNS 4971) to para 13 of the draft which now reads:

[13. In view of the special needs and requirements of developing and least developed members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, the transition periods provided for their benefit under paragraphs 65.4 (time till 2005 for providing product patents where currently only process patents are allowed) and 66.1  (10 year period, i.e.2005, for implementing TRIPS) shall be extended for another period of five years from the expiration of the transition periods provided thereunder, particularly in respect of the obligation to render available patent protection on products or processes relating to public health, without prejudice to further extensions.”]

Summing up the discussions at the end, Jara noted that some 25 interventions had been made, both on the declaration and on the agenda items under the Special discussion, and said that in practical terms there was little time to deal with it. He would consult with the General Council chair in terms of a draft ministerial declaration text that is being handled overall in the General Council.

During the discussions earlier, the EC and Japan said they had an open mind on whether it should be a separate declaration or one built into the overall declaration.

Jara thought that most members who intervened had favoured a separate declaration and he would discuss with the General Council on how to proceed further. He might have further discussions on the issue in the TRIPS Council Friday, he indicated. He would also circulate a draft document that would draw upon the various elements before the TRIPS Council.

Some of the industrial country statements, like that of the US and Switzerland, took the position that the TRIPS itself did not authorize parallel imports, but only prevented disputes at the WTO on this, and that any parallel imports must be accompanied by measures to ensure that the pharmaceutical products made available to the poorest in countries be not diverted to the rich markets.

The developing countries in their interventions insisted that the entire provisions of TRIPS must be read and interpreted in terms of the objectives and principles in Articles 7 and 8, with Article 7 setting out the balance to be achieved between the rights of IPR holders, the need for technology innovation and public interest and Article 8 in terms of principles permitting each country formulating laws to take measures necessary for protection of public health.

The US and others argued however that measures that countries could take had to be consistent with the provisions of the TRIPS Agreement.

Among the other industrial countries, Norway took the view that Art 7 provided for a balance of interests between those benefiting from protection of IPRs and interests of those wanting to make use of protected technology, seeking transfer of technology to mutual advantage of both producers and users, and that the “over-riding goal is to achieve both technological progress and social and economic welfare.” Also, said Norway, Art. 8 pointed to the rights of members to take measures to protect public health, prevent abuse of intellectual property rights by holders and resort to practices adversely affecting international transfer of technology.

Contrary to the US views, said Norway, all the other provisions of TRIPS would have to be read and interpreted in the light of articles 7 and 8, and the objectives and principles were very important to the interpretation of Article 31 (for compulsory licensing). This was particularly the case for access to medicines.

India, for its part, said that the member countries in signing on to the TRIPS and Marrakesh agreement had not agreed to sign away their rights to take measures to protect public health, access to medicines and nutrition.

India and Brazil also insisted that development of domestic production (which in the Swiss view did not enable compulsory licensing) was an important part of health policy of countries for a number of reasons. Brazil cited in this regard the need to have domestic production for consumer benefit in order to shield populations from the exchange rate fluctuations and effects on prices.

On parallel imports while the US and Switzerland argued that the provision about each country settling its policy on exhaustion of rights and the fact that the WTO dispute mechanism not being invoked in this matter did not mean a right for parallel imports and that imports must satisfy the IPR holders rights.

The developing countries rejected such an approach.

The EC and others spoke of allowing parallel imports, but stressing differential pricing and need to ensure that cheaper medicines do not leak back to the higher income countries.

Norway said that while preferential pricing was one of several methods to increase availability and affordability of patented medicines in developing countries, Article 6 related to the question of exhaustion of rights and the extent to which a member was free to decide its own legislation. Article 6, with 7 and 8, was part of the General provisions and basic principles of TRIPS, and made clear that subject only to the requirement about national treatment and the MFN principle, nothing in the agreement is to be used to address the issue of exhaustion of IPRs. This meant that a member could choose to apply the concept of national or international exhaustion of rights.

Article 6 applied specifically in respect of disputes, and this meant that no panel may say that a particular system for exhaustion of rights chosen by a member is contrary to TRIPS and that whatever system is chosen it would not contravene TRIPS per se. While some tried to limit the scope of Article 6 by references to Article 28, the footnote to that article made clear that the exhaustion of rights stipulated in respect of use, sale, import or other distribution of goods, was subject to the provisions of Article 6 - and both to processes and products.

A number of developing countries insisted that there must be some certainty through the ministerial declaration and decisions so that the flexibility could be made use of, without fear of being dragged to dispute panels, by developing countries as of right to ensure availability of essential medicines at affordable prices.

Kenya underscored that delays in acting on the issue would result in the world moving towards even worse disasters than had been witnessed in the recent past.  Protection of public health was one of the major policy objectives of Kenya, and in joining WTO and ratifying the agreements, the government of Kenya had not given up its sovereign powers to take regulatory actions to protect and promote the safety and health of its people. And in the absence of a clear and categorical statement by the WTO, rights indicated in the TRIPS in favour of rights holders of patented pharmaceutical products might potentially impact on ability of any government to promote national public health objectives.

In the Kenya view, the right of countries and the overriding public welfare interest in protecting and promoting access to affordable and life-saving medicines was clearly recognized by the provisions of TRIPS. However,  threatening recourse to the WTO dispute settlement system by some members against others had created a ‘chilling-effect’ on use of TRIPS authorized measures. Hence Kenya supported the call for a Ministerial declaration, and the provision there calling on members to refrain from using WTO dispute settlement system on disputes concerning measures adopted by developing and LDCs to protect and promote health. – SUNS4971

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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