September 10, 2003

The August 30 WTO deal on exports of generic medicines is being presented as a gift to the poor. However, it is a "gift" bound tightly in red tape. As a measure of trade policy, it contradicts the basic principles of the WTO and free trade.1

The good news is that the developing countries resisted pressure from the United States, the European Union, Japan and other developed economies to limit the agreement to only a few diseases or for only extraordinary circumstances.

For a WTO "deal" to be more than a public relations exercise for a new round of trade rules, it should actually work in practice. The WTO took a 52-word mechanism2 that was endorsed by the European Parliament in 2002 and created a 3,200-word maze of red tape that was plainly designed to frustrate and undermine the objective of protecting public health and promoting access to medicine for all.

These are the main problems with the rules:

  1. The WTO is requiring the issuance of two compulsory licenses when the new mechanism is used.

  2. The WTO has added many constraints on the business practices of the generic companies.

  3. The WTO deal introduced an extra layer of uncertainty by stating that the system should not be an instrument to pursue industrial or commercial policy objectives, creating uncertainty over the role that will be played by the businesses that manufacture and sell generic drugs.

  4. The decision leaves unclear whether or not economic efficiency is a grounds for determining a lack of manufacturing capacity in the importing country. The lack of clarity on this issue has been defended as a matter of "creative ambiguity", but already the US is telling the Philippines and other countries that they will oppose "economic efficiency" as grounds for allowing a country to import generics.

  5. The deal gives the WTO itself new authority to second guess and interfere in the granting of individual compulsory licenses to generic companies.

  6. The United States and other Developed Economies now have greater opportunities to pressure and stop developing countries from issuing compulsory licenses.

The current decision is only a temporary waiver, and a permanent amendment to the TRIPS is scheduled for 2004. We call upon the WTO member countries to draft an amendment to the TRIPS that simplifies and clarifies the procedures and removes unnecessary obstacles to the export of medicines to address public health problems.

We also call upon every country that does not have access to medicines for all to begin to use the TRIPS flexibilities, and the August 30, 2003 decision, to provide affordable medicines to the poor. We urge counties to resist implementation of TRIPS plus obligations in regional or bilateral trade agreements. If the framework imposed on countries by the WTO cannot be used effectively to promote public health and access to medicines for all, then poor countries should not be obligated to issue patents on medicines.

ACT Up Paris
Consumer Project on Technology
Consumers International
Essential Action
European AIDS Treatment Group
Health Action International
Health GAP
International People's Health Council
Medecins sans Frontieres
OXFAM International
People's Health Movement
Third World Network
Women in Development Contacts in Cancun: ActUp Paris: Gaelle Krikorian, (33) 609-177-055
CPTech: James Love, (1) 202-361-3040
HAI: Spring Gombe, (52) 998-8971-814
HealthGAP: Asia Russell, (1) 267-476-2645
MSF: Ellen t'Hoen, (52) 998-120-9420 or Kris Torgeson, (1) 917-913-0183
Oxfam: Michael Bailey, (52) 998-107-6335
TWN Cecilia Oh (41) 76 523 12 33


1 First, the new "deal" explicitly accepts a protectionist framework, where rich countries can export to poor countries, but 23 rich countries were allowed to bar imports from developing countries. Second, the long list of new regulatory requirements does not apply to compulsory licenses in countries with capacity for manufacturing. Finally, the entire framework of export restrictions is designed to limit rather than promote economic efficiency, the putative rationale for free trade agreements.

2 Amendment 196 to the European Directive on Medicines for Human Use: "Manufacturing shall be allowed if the medicinal product is intended for export to a third country that has issued a compulsory licensing for that product, or where a patent is not in force and if there is a request of the competent public health authorities of that third country."`

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