Trade: Flawed proposals to TRIPS Agreement

The following statement was prepared by nongovernmental organizations concerned that a flawed provisional agreement for providing impoverished people and countries access to essential medicines will be made permanent. It was directed at participants in the WTO ministerial meeting in Hong Kong in December, but identifies a crucial issue easily overlooked due its complexity.

The WTO General Council is considering proposals to amend the TRIPS Agreement in order to permit the exportation of generic medicines produced under compulsory license to supply countries with insufficient or no manufacturing capacity.

According to health, in particular AIDS, activists, the proposals are flawed, and poor countries should not accept a permanent amendment that has not been shown to work in practice.

In 2001, the WTO signed the Doha Declaration on TRIPS and Public Health (the Doha Declaration), which affirms the right of countries to prioritize access to medicines and public health over intellectual property rights. However, the Doha Declaration left unfinished the issue of how countries with insufficient or no manufacturing capacity can make use of these rights. Indeed, most poor countries are not adequately equipped to do efficient domestic production of medicines, while those which have capacity require the economies of scale of a large, global market in order to reach prices that the poor can afford. However, under the TRIPS Agreement, there are significant limitations on exports of generic medicines made under compulsory license.

On August 30, 2003, the Members of the WTO finally agreed on a mechanism with many procedures for allowing trade in compulsory-licensed medicines. The procedures have been criticized by generic industry experts and activists alike for being too burdensome and unworkable in practice. However, the U.S. and the EU are pressuring developing countries to accept that the flawed August 30 agreement be locked in as a permanent amendment to the TRIPS Agreement - despite the fact that the mechanism has not been used since its introduction more than two years ago and its workability is uncertain.

Following the August Decision, the Africa Group submitted a formal proposal that removes many of the procedural requirements and this proposal received wide support from civil society as well as developing countries as a basis to rethink the mechanism that was agreed to on August 30, 2003. This proposal is also in accordance with the African Health Ministers’ recent call in the Gaborone Declaration on “the Ministers of Trade to seek a more appropriate permanent solution at the WTO that revises the TRIPS agreement and removes all constraints, including procedural requirements, relating to the export and import of generic medicines.”

Unfortunately although the Africa proposal enjoyed much support, in the current negotiations, this proposal does not seem to be discussed at all. ...

In addition, while the discussion in the TRIPS Council and the General Council have mainly been around the legal status of the Chairman’s Statement, we feel that a more in-depth focus has also to be shown on finding a mechanism that works to facilitate access to medicines. It must be borne in mind that the lives of millions of people depend on finding [such a mechanism] ...

Thus the current [August Decision] mechanism needs to be tested and shown to work, before it is turned into a permanent feature of the TRIPS agreement. If the mechanism proves ineffective in achieving its stated goal - enhanced access to affordable medicines for countries with insufficient or no domestic manufacturing capacity - then WTO members should return to the drawing board and agree to a mechanism that is more effective.

For now the [August Decision] mechanism is a waiver that, according to paragraph 11, only terminates “on the date on which an amendment to the TRIPS Agreement replacing its provisions takes effect for that Member,” thus effectively it is a permanent waiver for Members to use.
This issue is too important for countries to quickly agree to an amendment just to be able to claim that the WTO system still works and can deliver for development. The developed countries, in particular the U.S. and EU, are desperate to deflect attention from their lack of movement in agriculture and their anti-development proposals in NAMA and Services. If the price of making that claim is the lives of people living with treatable but deadly diseases, then developing countries should not pay it.

For additional information and to see whether any decisions were made at the WTO regarding TRIPS, see Oxfam International (www.oxfam.org), Christian Aid (www.christian-aid.org.uk) or the Third World Network (www.twnside.org).