Update on TRIPS Council Special Discussion on Access to Medicines (September 19, 2001) and TRIPS informal meeting (September 21, 2001)

On September 19, the WTO TRIPS Council held its second Special Discussion on TRIPS and access to medicines. The discussions continued over in an informal meeting of the TRIPS Council, which met on September 21. The highlight of the Special Discussion was the proposal of a stand-alone Ministerial Declaration on TRIPS and public health from the developing countries. The developing countries had, in July, called for a process of identifying elements for a Ministerial Declaration.

The hardliners; namely the US and Switzerland, had earlier objected to such a process, continue in their attempts to block a declaration on TRIPS and access to medicines. It appears now that Australia, Canada, Japan and New Zealand have also joined the hardliners’ camp. The EU position seems more supportive of the developing countries, although the EU position is not yet clear on some key points raised by the developing countries. Consultations are on-going, and it is understood that EU and the developing countries are hoping to get agreement on a text for a Ministerial Declaration on TRIPS and access to medicines. Consultations are also expected on how the TRIPS process will be coordinated with the overall preparatory process for Doha within the General Council.

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REPORT ON TRIPS COUNCIL SPECIAL DISCUSSION ON ACCESS TO MEDICINES (SEPTEMBER 19, 2001) AND TRIPS INFORMAL MEETING (SEPTEMBER 21, 2001)

By Cecilia Oh, Third World Network
Geneva, September 26, 2001


1. INTRODUCTION/SUMMARY

On September 19, the WTO TRIPS Council held its second Special Discussion on TRIPS and access to medicines. The discussions continued over in an informal meeting of the TRIPS Council, which met on September 21.

The WTO debate on the TRIPS Agreement, public health and access to medicines appear to have coalesced, for the moment, into positions put forward by three groupings of countries in the form of ‘non papers’ (WTO-speak for an informal proposal which can be further negotiated and amended).

The highlight of the Special Discussion was the proposal of a stand-alone Ministerial Declaration on TRIPS and public health from the developing countries. The developing countries had, in July, called for a process of identifying elements for a Ministerial Declaration.

The US and Switzerland, which had earlier objected to such a process, continued in their attempts to block a declaration on TRIPS and access to medicines. It appears now that Australia, Canada, Japan and New Zealand have also joined the two countries.

The EU position seems more supportive of the developing countries, although the EU position is not yet clear on some key points raised by the developing countries.

Consultations are on-going, and it is understood that EU and the developing countries are hoping to get agreement on a text for a Ministerial Declaration on TRIPS and access to medicines. Consultations are also expected on how the TRIPS process will be coordinated with the overall preparatory process for Doha within the General Council.


2. DEVELOPING-COUNTRY PROPOSAL

The first group of countries, represented by developing countries, has made its position clear. The group of 50-odd developing countries—which had been spearheading efforts in the WTO to address concerns relating to TRIPS, patents and access to medicines -- circulated a non paper at the Special Discussion of the TRIPS Council on September 19, 2001. The paper puts forward a draft text for a Ministerial Declaration on TRIPS and Public Health, which the developing countries want to see endorsed by Ministers at the forthcoming Doha Ministerial Conference in November 2001.

The draft declaration contains 17 preambular paragraphs. Its operative section (comprising 14 paragraphs) starts with the proposition that ‘nothing in the TRIPS Agreement shall prevent Members from taking measures to protect public health’, which the developing countries wish to have affirmed by the Ministers in Doha. Following on from this overarching principle, the paper elaborates on some of these public health measures, including parallel imports, compulsory licences for production and exports, establishment of (easier) marketing approval procedures for generic products, and authorization of production and export of medicines without consent of patent holders to address public health needs in importing WTO Members.

In addition to clarification on specific issues relating to parallel imports and compulsory licences, the developing-country paper would also have the Members agree to ‘refrain from imposing or threatening to impose sanctions or . granting incentives or other benefits .  which could curtail the ability of developing and least-developed country Members to avail themselves of every possible policy option to protect and promote public health’. The draft declaration further talks of Members exercising ‘utmost restraint’ in terms of dispute settlement proceedings, and an extension of TRIPS implementation deadlines for developing and least-developed countries.


3.  THE COUNTER-PROPOSAL BY US, SWITZERLAND, ETC.

A US and Swiss-led coalition of countries had also circulated a non paper, which many refer to as the counter-proposal to the developing-country paper. Australia, Canada, Japan, Switzerland and the US, submitted their proposal for preambular language for the Ministerial Declaration regarding ‘Access to Medicines for HIV/AIDS and other Pandemics’. The paper circulated during the Special Discussion contained only a preamble - the second part of the document appearing 2 days later at the informal meeting on September 21.

The preamble implicitly rejected the developing countries’ call for a separate Ministerial Declaration on TRIPS and public health, and also sought to restrict the discussion and/or any declaration to only medicines for pandemics such as HIV/AIDS. The preamble seeks reaffirmation that the ‘TRIPS Agreement contributes to the availability of medicines’ and of Members commitment to the Agreement and its implementation. It also notes that the discussions in the TRIPS Council have ‘clarified Members’ views of the flexibility provided under the Agreement’.

The second part of the document containing ‘clarification language’ was introduced by the US on September 21, and listed the Czech Republic and New Zealand as additional co-sponsors (and Australia missing from the line-up). This six-paragraph document still appears to be incomplete, although it is not known when the next parts are to be expected.

The first paragraph of the document refers to the interpretation of TRIPS provisions; that they be read in accordance with the customary interpretation rules of public international law, but no reference was made to Articles 7 & 8 of TRIPS, which set out the context and objectives of the Agreement. While acknowledging that Members are free to determine the grounds for grant of compulsory licences, the document does not address those specific grounds for which developing countries have asked to be affirmed and clarified as TRIPS-compliant.

Three of the six paragraphs are devoted to the issue of exhaustion of rights. Grudgingly admitting that ‘the TRIPS Agreement does not prevent Members from adopting the exhaustion regime that they regard in their best interests’, the paper seems also to say that parallel imports are limited to goods that have been placed on the market with the consent of the right holder (although legal experts have argued that goods placed on the market by compulsory licensees would similarly exhaust the rights of the patent holder). The paper also encouraged Members to take measures to prevent leakage of pharmaceuticals supplied under discounted pricing or aid schemes into markets for which they were not intended. The issues of parallel imports and differential pricing had already been discussed in previous meetings, when developing countries had made it clear that they did not want the issue of differential pricing to be a conditionality or limitation on the exercise of their rights related to parallel importation or compulsory licensing.

4.  THE EU POSITION

The European Union is the third group, apparently taking the middle ground in the debate. During the Special Discussion, the EU had expressed sympathy for the proposal for separate Ministerial Declaration.

A non paper was later circulated by the EU during the informal meeting of TRIPS Council on September 21. The paper puts forth text for a ‘Draft Declaration on TRIPS and access to affordable medicines’, with its first operative paragraph stating that the ‘TRIPS Agreement shall be implemented in a way as to ensure access to affordable medicines for all in the context of public health policies’. While this is certainly closer to the developing country proposition (that nothing in the TRIPS Agreement prevents Members from taking public health measures) than the US-Swiss paper, a number of observers had remarked on the fact that the EU paper did not deal with the specific issues raised in the developing country paper. It is also worrying that on the issues of parallel imports and compulsory licences, the EU paper uses language almost identical to that of the US-Swiss coalition paper.


5.  CONSULTATIONS CONTINUE ON THE ROAD TO DOHA

Given the wide differences between the positions of the developing countries on the one hand, and the US-Swiss coalition on the other, further intensive consultations are inevitable. A number of observers see the EU taking on a bridging role between the developing countries, on the one hand, and the US-led coalition, on the other. It is understood that consultations are already underway, and that the EU has been meeting with developing countries to discuss possible compromise on this issue. If the EU and developing countries were able to come to agreement on a text for a Ministerial declaration, it would isolate the US-led coalition.

Many developing country diplomats expressed disappointment at the US-led coalition paper. One observer was heard remarking that US and Switzerland had been hard at work building up an ‘anti-consensus coalition’, against the broad support for a separate Ministerial Declaration on TRIPS and public health. Indeed, they managed to recruit the Czech Republic and New Zealand to sponsor the second part of their non paper.

The Special Discussion and the informal meeting were chaired by Ambassador Alejandro Jara of Chile, in the absence of TRIPS Council chairman, Ambassador Boniface Chidyausiku of Zimbabwe. Ambassador Jara is expected to brief Ambassador Chidyausiku on 26 September, on his perceptions of the recent meetings. In concluding
remarks at the meetings, Ambassador Jara had said there was broad support for a separate Ministerial Declaration on TRIPS and public health, and on this point, he would seek consultations with the Chairman of the General Council, Ambassador Stuart Harbinson. It has been said that Mr Harbinson may circulate on 26 September a draft text for the Ministerial Declaration, as part of the overall preparatory process for Doha, and the question will be how the issue of TRIPS and public health is to be handled within the General Council process.

The issue of TRIPS and public will have an influence on the broader negotiations for Doha. The US and the EU have made clear their intention to launch a new round of negotiations (of new agreements on issues such as competition, investment and transparency in government procurement) at the Doha Ministerial Conference, but as an African diplomat put it, ‘we see this as a confidence building exercise. If we cannot even get clarification on provisions of an existing Agreement, how can we talk about negotiating new agreements?’

Developing country diplomats also point to increasing public opinion against the TRIPS Agreement. One Latin American diplomat said, ‘If we are not even able to agree to address this life and death issue, the credibility of the TRIPS Agreement is at risk. Perhaps, in the near future, we will have to deal with the problem of the TRIPS Agreement as a whole’.