Key WTO Official Makes Last Stab At Brokering TRIPS And Health Deal

Inside U.S. Trade
February 10, 2003

The Chairman of the WTO Council on Trade Related Aspects of Intellectual Property Rights today (February 10) asked the World Trade Organization General Council for another week to see if the U.S. and other key players will sign on to an agreement giving countries the right to source production of generic drugs abroad now that he has proposed a compromise designed to limit use of these rights to dealing with national emergencies.

TRIPS Council Chairman Eduardo Perez Motta late last week sought to bring the U.S. on board by proposing to make a statement that countries have "made it clear" that they see the more flexible patent rules under an agreement "as being essentially designed to address national emergencies or other circumstances of extreme urgency."

But so far, the U.S. has not said that the chairman's statement sufficiently addresses its concern that an agreement not provide an open-ended scope of diseases for use of the more flexible patent rules, trade officials said. One of its chief concerns is the legal value of such a chairman's statement in case there is a WTO dispute, sources said.

Other key developing countries like Brazil and Kenya have also not given their assent to the chairman's statement as a workable compromise.

However, other key African countries, including South Africa, have signaled their willingness to accept the chairman's statement as the basis for a deal, trade sources said, providing Motta with encouragement that a deal could be struck that allows acceptance of the draft agreement he proposed in December.

"My impression is that there is a widely shared desire to find a solution as soon as possible and to be willing to look positively at proposals aimed at providing the level of comfort necessary for the text of 16 December to be acceptable to all. Indeed, I sense that a certain momentum towards finding a solution has been generated in recent days and I felt that it is important that advantage should be taken of this," Motta told the General Council today.

Motta, Mexico's WTO ambassador, said there have been "positive reactions" to his recent ideas, and proposed continuing consultations in Geneva and in capitals until the February 18 TRIPS Council meeting, where he hoped to be able to report concrete results of these talks. Motta's term as TRIPS council chairman ends at the February 18 meeting, when he will be replaced by Singapore's WTO Ambassador Vanu Gopala Menon.

Trade officials said they expected the access to medicines issue would feature prominently among the development issues discussed at the February 14-16 mini-ministerial of some 25 key WTO countries.

Although the language of Motta's statement moves toward limiting the scope of a deal to national emergencies--the U.S. had pushed for limiting the scope of diseases to health crises such as those resulting from AIDS/HIV, malaria and tuberculosis--it remains unclear whether a chairman's statement has the legal weight to define limits to use of the more flexible patent rules, informed sources said. The U.S. is now consulting with its industry on that question, sources said.

If a chairman's statement is precise and speaks to an ambiguity in the text of an agreement, it can provide guidance for dispute settlement panelists in interpreting that agreement, according to an informed source.

The scope of diseases under the Dec. 16 text has room for conflicting interpretations, since it refers generally to the "public health problems" facing developing countries, but also uses AIDS/HIV, malaria and tuberculosis as examples of such problems.

The chairman's statement pointing to national emergencies seems to be an attempt to provide criteria for judging whether public health problems fall within the scope of the agreement, the informed source said. At the same time, it is far from clear that it provides any legally binding limits to the deal, particularly when it is read in conjunction with the Doha Declaration on the TRIPS Agreement and Public Health

The chairman's statement also reconfirms countries' commitment to the Doha Declaration on the TRIPS Agreement and Public Health, and that agreement includes at least two statements that suggest the chairman's statement would not have much effect in providing legally binding limits on the scope of a deal.

For example, the Declaration states "Each member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency."

In addition, the Declaration also affirms that "Each Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted."

Developing countries like Kenya are also asking Motta to clarify the legal effect of his proposed statement.

"If it has no legal effect, then no problem," a Kenyan official said, noting that his country remains opposed to an agreement that limits the scope of a deal to national emergencies or situations of extreme urgency. Kenya believes the agreement should be designed to give countries that lack pharmaceutical manufacturing capacity the same ability to use compulsory licenses as countries that can make their own drugs.

In urging WTO members to reject the chairman's statement, Doctors Without Borders, one of the key health groups in the debate, cautioned countries not to take comfort that a chairman's statement has no legal effect.

"Let no delegation be under the illusion that a Chair's note, reflecting an agreement amongst all negotiating parties, can have no legal effect. The Chair would not be making the note if it had no legal effect and there are grave grounds to worry that under the Vienna Convention [on the interpretation of treaties] it could be held to have legal effect," Ellen 't Hoen wrote in a February 8 open letter to WTO delegates. "As a result if the Motta text were used outside emergency situations, the exporting member would open itself to dispute settlement for breach of its obligations."

The Doctors Without Borders letter also argues that the limits set by Motta's statement would prevent countries from purchasing generic drugs in order to prevent a health emergency.

"It is unacceptable that a subset of developing countries may only provide pharmaceutical care after a public health situation has gone out of control," 't Hoen writes.

As an alternative, 't Hoen proposes that the Chairman's statement read "Delegations have made it clear that they see the system that is being established under this proposed solution as being designed to promote access to effective treatments, to address public health problems afflicting countries with insufficient or no manufacturing capacities in the pharmaceutical sector. . ."

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