Statment of Jose Serra, Minister of Health, to the 2001 USTR Special 301 Report
May 3, 2001

Journalism Division

With reference to the report by the White House Trade Office (USTR), made public today 1st May in Brazil, we must point out the following:

First of all, it is necessary to point out clearly that if any country of the Americas deserves to be called protectionist, it is certainly the United States of America, which resorts to all manner of non-tariff barriers in order to obstruct Latin American exports from entering its market.

As far as Brazil is concerned, we recall the absurd discrimination that our steel and orange juice exports are suffering. It is worth also recalling the protectionist subsidies that the American Government awards to its agricultural sector and its inefficient steel industry.

Brazil does not, and indeed would not know how to, resort to non-tariff barriers. And the most significant proof of this is the fact that we have been shouldering huge trade deficits with the United States since the middle of the last decade.

In fact, in pharmaceutical drugs industry matters, the White House Trade Office (USTR) is defending neither free trade nor competition. All it is doing is to defend the self-interest of an industry, which has a disproportionate influence on the Bush administration.

It is important not to confuse the interests of large firms, that the USTR is defending in this particular case, with the doctrine of free trade. It is of course well known that the USTR specialises in the defence of the interests of the American economy and not in global free trade.

Our Patents Law adheres scrupulously to the guidelines of the World Trade Organisation of which the United States is a signatory. This law sets forth two options for compulsory licensing. The first applies when the production of a particular drug is not carried out in Brazil after a period of three years has elapsed. The other is when the prices of certain patented drugs are considered abusive.

The first measure has not been employed to date. It should at this point be noted that the United States has a similar measure in its own legislation but, as usual, the United States does not wish other countries to adopt legal measures that the United States has already adopted in defence of its own interests.

The second measure has not been used either, but the simple fact that we might be prepared to do so has led to a number of foreign laboratories to lower their prices, as is the case of Merk -Sharp, which reduced the price of two AIDS drugs for Brazil by two and a half times. This has resulted in a saving for Brazil of $US 40 million per annum.

What is also bothering the USTR is Brazil's policy of producing generic drugs. This is a policy which also exists in the United States. But it is obvious that the United States is less than happy when other countries do the same.

The USTR is not happy either with Brazil's policy of price-maintenance of pharmaceutical drugs, although again similar policies are followed in the United States, where forty states are at this very moment discussing ways of restricting price abuse. In Brazil, we are effectively doing nothing that the United States is not doing itself.

The production of drugs to control AIDS helps us to save as much as $US200 million per year on purchases from abroad, without trampling upon any patent law.

Finally, it is completely out of order for the Government of the United States to make judgements on the Brazilian AIDS programme, which is considered to be one of the best - if not the very best - in the whole world, by the United Nations, the World Bank and the American press, as demonstrated recently by commentary in The New York Times. This programme is what it is thanks to the determination of the government of Fernado Henrique Cardoso to bring down the costs of these drugs. And we intend to continue to go ahead with this. There is no way that the Brazilian Government will retreat on this issue. The United States is not at all accustomed to Latin American countries also defending their own interests.


Brazilian Minister of Health

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