Consumer Project on Technology Statement on the Trade Dispute Between the United States and Brazil

February 6, 2001.

There are several reasons why the United States should not have filed a WTO action against Brazil.

  1. Brazil is the prime example of a country that is doing things right with respect to providing treatment for AIDS. The US action undermines the often expressed view that the US is primarily concerned with infrastructure or other care related issues.
  2. The ability of Brazil to provide care is linked to its ability to manufacture cheaper copies of drugs. This should inform policy makers about the benefits of policies that support a domestic industry.
  3. The big Pharma companies will use the US trade action to disparage and undermine the Brazil program, throughout the world, and it will be used domestically in Brazil to undermine the governments AIDS policies.
That said, it should also be acknowledged that the US action was narrow, focusing on the validity of the local working requirements, and surprisingly, on the Brazil provisions on parallel imports, a matter that appears to be out of the WTO authority, given Article 6 of the TRIPS. The US government did NOT ask the WTO to review Article 71 of the Brazil law, which states:

Art. 71. In cases of national emergency or of public interest, declared in a decision of the Federal Executive Power, and where the patent owner or his licensee do not satisfy such need, a temporary non-exclusive compulsory license to exploit the patent may be granted ex officio, without prejudice to the rights of the owner of the patent.

Sole paragraph. The instrument granting the license shall set out its term of validity and any possiblilty of extention.

We are pleased that the USTR did not target Article 71. One doubts the US could have achieved much by contesting Article 71 before the WTO, given Article 31.b in the TRIPS. However, it should also be noted that the US has pressed Brazil on Article 71, via bilateral pressures, including, for example, a trip to Brazil by Commerce Secretary Daley, last year, traveling executives from Merck and Pfizer.

This article in on the CPT Brazil page here:

February 12, 2000. Marcio Aith. Patent laws can generate conflict with US. Folha de São Paulo. A translation of this article appeared on the Treatment Access forum. Quoting from the translation:

The Trade State Secretary , William Daley, will ask the Brazilian government to derogate the decree on patents (October 6th, 1999), written by the M. of Health, Dr. José Serra, which did not please the US pharmaceutical industry may be the newest conflict between both countries.

Daley, who traveled to South America yesterday night, in an official visit , expressed in a talk to students that he will raise, in his talks with the Brazilian authorities "serious concerns related to some provisions on the patents laws (Brazilian)".

An assistant, Bernard Carreau, explained to the Folha de São Paulo, that these provisions are in a decree which, while regulating an article in the patents law, allowed the compulsory licensing of products in cases of "national emergency or public interest".

According to Folha, the US pharmaceutical industry fears that the decree gives to the M. of Health the power to consider abusive prices for drugs a case of "public interest", which would justify the compulsory obtention of patents for the emergency production of medicines. In his trip to Brazil, Daley will be accompanied by the world President of the pharmaceutical giant Merck, Raymond Gilmartin, and Pfizer's vice-president for Latin America, Ian Read. Other officers from 16 companies will be with him: the AOL (America on Line) President for Latin America, Charles Herington, five officers from electric companies and the Bell South's vice-president.

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