WTO deal on medicines a “gift” bound in red tape

Geneva, 10 Sep (Chakravarthi Raghavan) - The 30 August deal at the WTO on implementing para 6 of the Doha Declaration on TRIPS and Public Health, being presented as a gift to the poor, “is a ‘gift’ bound tightly in red tape,” a group of international NGOs following and monitoring the WTO and the TRIPS issues have said.

The NGOs, all now represented at Cancun and following the meeting there are: ACT Up Paris, Consumer Project on Technology, Consumers International, Essential Action, European AIDS Treatment Group, Health Action International, Health GAP, International People’s Health Council, Medecins sans Frontieres, OXFAM International, People’s Health Movement, SEATINI, Third World Network and Women in Development.

WTO trade officials, and those who struck the deal, have found fault with some initial media reports, pointing to small ‘factual errors’ - such as whether Mali in Africa is an LDC to whom TRIPS does not apply or a developing country that has to obey the ‘understanding’ on the deal announced before the adoption at the General Council.

Such errors in small details however do not change the basic criticisms.

In effect underscoring such criticisms, the NGO statement says that apart from the red tape that would be involved in using the mechanism, as a measure of trade policy, “the deal contradicts the basic principles of the World Trade Organisation and free trade.”

Firstly, the point out in this regard, the new “deal” explicitly accepts a protectionist framework, where rich countries can export to poor countries, but 23 rich countries were allowed to bar imports from developing countries. Second, the long list of new regulatory requirements does not apply to compulsory licenses in countries with capacity for manufacturing (but only those lacking in capacity). Finally, the entire framework of export restrictions is designed to limit rather than promote economic efficiency, the putative rationale for free trade agreements.

The ‘good news’ in the deal is that the developing countries resisted pressure from the United States, the European Union, Japan and other developed economies to limit the agreement to only a few diseases or for only extraordinary circumstances, the NGOs say.

However, for a WTO “deal” to be more than a public relations exercise for a new round of trade rules, it should actually work in practice.

The WTO took a 52-word mechanism that was endorsed by the European Parliament in 2002 and created a 3,200-word maze of red tape that is plainly designed to frustrate and undermine the objective of protecting public health and promoting access to medicine for all.

The EU Parliament’s amendment 196 to the European Directive on Medicines for Human Use, says: “Manufacturing shall be allowed if the medicinal product is intended for export to a third country that has issued a compulsory licensing for that product, or where a patent is not in force and if there is a request of the competent public health authorities of that third country.”

As for the problems in using the new mechanism, the NGOs point out:

The WTO is requiring the issuance of two compulsory licenses when the new mechanism is used. The WTO has added many constraints on the business practices of the generic companies. The WTO deal introduced an extra layer of uncertainty by stating that the system should not be an instrument to pursue industrial or commercial policy objectives, creating uncertainty over the role that will be played by the businesses that manufacture and sell generic drugs.

The decision leaves unclear whether or not economic efficiency is a grounds for determining a lack of manufacturing capacity in the importing country. The lack of clarity on this issue has been defended as a matter of “creative ambiguity”, but already the US is telling the Philippines and other countries that they will oppose “economic efficiency” as grounds for allowing a country to import generics.

[The constructive ambiguity in drafting the various Uruguay Round agreements has not only spawned a range of disputes at the WTO, keeping lawyers and the secretariat and panellists busy and employed, but has effectively prevented developing countries from getting benefits which they thought they had been promised in signing on to the agreements.

[It is this that lies behind the ‘implementation’ issues and demands, made into a part of the ‘single undertaking’ that the majors and the WTO leadership are trying to bury, without too much resistance by all the developing countries.]

The August 30 deal gives the WTO itself new authority to second guess and interfere in the granting of individual compulsory licenses to generic companies.

The United States and other Developed Economies now have greater opportunities to pressure and stop developing countries from issuing compulsory licenses.

The current decision is only a temporary waiver, and a permanent amendment to the TRIPS is scheduled for 2004.

The NGOs said: “We call upon the WTO member countries to draft an amendment to the TRIPS that simplifies and clarifies the procedures and removes unnecessary obstacles to the export of medicines to address public health problems. We also call upon every country that does not have access to medicines for all to begin to use the TRIPS flexibilities, and the August 30, 2003 decision, to provide affordable medicines to the poor.

“We urge counties to resist implementation of TRIPS plus obligations in regional or bilateral trade agreements. If the framework imposed on countries by the WTO cannot be used effectively to promote public health and access to medicines for all, then poor countries should not be obligated to issue patents on medicines.”

The NGOs statement comes even as reports are circulating that the US and big PhRMA are planning to use the opportunity of the TRIPS amendment to be made to give effect to the Doha declaration to reduce the flexibilities now available to countries for compulsory licensing under Art. 31 (f). – SUNS5416

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