Inside US Trade
December 6, 2002

U.S. Trade Representative Robert Zoellick came under pressure last week from members of the Senate not to settle for a deal in the World Trade Organization that allows developing countries to import generic copies of patented drugs to treat a wide range of diseases.

Senate Finance Committee Chairman Max Baucus and committee members Orrin Hatch (R-UT), John Breaux (D-LA) and Bob Graham (D-FL) wrote Zoellick Nov. 25 urging that he negotiate a deal specifically limited to HIV/AIDS, tuberculosis, malaria and "infectious epidemics of similar gravity and scale that may arise in the future." That language is lifted verbatim from an earlier letter to Zoellick from 20 pharmaceutical company executives (Inside U.S. Trade, Nov. 22, p.11).

The senators' letter was in concert with a concentrated lobbying campaign by the pharmaceutical industry aimed at ensuring that the U.S. does not embrace an open-ended definition that would permit developing countries to issue compulsory licences for the manufacture and importation of generic drugs to combat a wide variety of health problems. One industry source said that campaign included calls to the White House critical of the U.S. negotiating stance.

Following that pressure, U.S. Ambassador to the WTO Linnet Deily last week said that the U.S. wanted to find a mechanism definitively limited to the three pandemics and others of similar gravity and scale (Inside U.S. Trade, Nov. 29, p. 1). Her statements came despite earlier indications that the U.S. was willing to agree to a compromise based on the Doha declaration, which highlights the pandemics but also refers generally to the public health problems facing developing countries.

"An open-ended or unclear exception to the standards for patent protection would seriously undermine our interest and set back the long-term public health objectives" agreed by trade ministers in Doha last year, the senators' letter says.

At issue are efforts by countries to agree by the end of this year on an exception to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights to allow countries with no pharmaceutical manufacturing capacity to override patent rules to import generic copies of drugs from abroad.

The senators wrote that they hope to work with Zoellick on an agreement that maintains the integrity of the TRIPS agreement and meets the year-end deadline mandated in the Doha Declaration on TRIPS and Public Health.

However, some trade officials believe that if the U.S. stands firm in its efforts to definitively limit the agreement to these three diseases and future pandemics, there is little chance of winning support from developing countries and reaching a deal by the end of the year. Developing countries have argued that the reference in paragraph one of the Doha Declaration on TRIPS and Health to the three pandemics affecting Africa should not be taken to limit the agreement to these three diseases or to epidemics.

After talks on the issue broke down last week, TRIPS Council Chairman Eduardo Perez Motta called a cooling off period, urging delegations to consult with their capitals. Talks will resume at an open-ended informal meeting Sunday, Dec. 8, with the goal of agreeing in time to report to the Dec. 10-11 General Council. But those talks could potentially continue up to the year-end deadline.

At a Nov. 28 formal meeting of the TRIPS Council, the African group expressed disappointment and frustration with how talks have progressed.

"The group feels that if discussions continue on the same line as they have been conducted to date, then it is unlikely that the desired solution will be forthcoming, particularly one meant to address the public health problems afflicting Africa," the African group statement said. The African group has argued that the scope of a solution should be based on the goal in the Doha TRIPS declaration to promote "access to medicines for all."

Although some Geneva officials held out hope that the hard line taken by the U.S. was merely a negotiating tactic from which the U.S. would eventually back down, U.S. industry sources say they have been assured that this was the U.S. bottom line. At the same time, U.S. officials remain committed to reaching agreement by the end of the year, arguing the situation will be worse if the highly charged political issue is bumped to the Cancun ministerial in September.

One source said that industry remains wary that Zoellick's battlefield conversion to the industry viewpoint will not stick. "We applied unbelievable pressure," the industry source said. "But you always have to be worried about new converts. . . How long will the convert stay converted?"

In addition to the White House calls, and letters from CEOs and Congress to Administration officials, in addition to a Wall Street Journal editorial that accused Zoellick of showing weakness on drug patent issues in the negotiations, the source said.

The Nov. 25 letter from senators reminds Zoellick that his fast-track negotiating authority "instructs USTR to seek agreements that respect the exceptional circumstances outlined in the Doha Declaration." However, the language referred to, an amendment sponsored by Sen. Edward Kennedy (D-MA), makes no reference to exceptional circumstances. It simply calls on USTR to respect the Declaration on TRIPS and Public Health in future trade agreements, and was designed to prevent the U.S. from undermining the flexibility on TRIPS rules affirmed in that declaration in future bilateral or regional accords.

Return to: CPTech Home -> Main IP Page -> CPTech Page on WTO -> Paragraph 6 Page