US holds up decision on implementing Doha Health Declaration

SUNS South-North Development Monitor
Issue #5258, December 19, 2002

Geneva, 18 Dec (Chakravarthi Raghavan) - An informal meeting of the TRIPS Council Tuesday heard further views from members on the Chairman's draft text for decision on implementing Para 6 of the Doha Ministerial Declaration on TRIPS and Public Health, but there was still no consensus.

The United States still remained opposed to the Chairman's draft and insisted on restrictive definition of the scope. And few expect the US to change its view.

The TRIPS Council is meeting again on the morning of Friday 20 December.

Several trade diplomats, speaking on a non-attributive basis, said that the conditions being attached both on importing and exporting members are such that in practical terms it won't work.

However, the entire discussions had now become an exercise by countries to ensure that the blame for failure to implement the Doha ministerial mandate to implement paragraph 6 is not shifted to their shoulders.

On Monday,16 December, the TRIPS Council had met informally, and was given a new revised text by Chairman Eduardo Perez Motta of Mexico. A number of delegations at that meeting had given their preliminary comments or reserved their pending instructions from capitals.

Several of them spoke Tuesday, with a larger number of countries agreeing to the revised text or at least not opposed, while the US did not change its stand.

With no consensus, the meeting was suspended again, until 10 am on Friday 20 December.

Trade officials said that at Tuesday's meeting more countries announced they could join a consensus even though they had problems with some parts of the text. Despite their reservations, they recognized that the text was the best that could be achieved now.

Many of them also said that it was important to send a good signal to the world by meeting the mandate and deadline of the Doha Declaration on TRIPS and Public Health. Several also warned that if others sought changes to the draft, they would also seek changes, which would unravel the text.

A number of countries who had not spoken Monday, or were not ready to join a consensus pending advice from their capitals, spoke Tuesday indicating they would join a consensus. v Among these were: Turkey, Colombia, Poland, Hong Kong China, New Zealand, Australia, Israel, Senegal, Romania, Thailand, Malaysia, Singapore, India, Brazil, Peru and Nigeria.

Kenya, in a statement on behalf of the African Group, felt that the draft text could have included a number of points (which it listed) and others omitted. Among these last, is the requirement in the current text that products supplied under this system should have a different colour and shape. This, the African Group said, would raise costs, and that a distinctive labelling requirement ought to be a good compromise.

Nevertheless, said the African Group, it could join a consensus on the text as it stands.

A few delegations said they could not join a consensus, among them the United States, which repeated its preference for a restrictive disease coverage - the decision to apply only for HIV/AIDS, malaria, tuberculosis, or other infectious epidemics of comparable gravity and scale, including those that may arise in the future.

Japan said that it was aiming for consensus within the deadline, but was aware that at the moment there was no consensus because of concern about diseases covered (including the question of asthma and obesity), which should be clarified.

The Philippines still sought a more flexible text on importing countries implementing safeguards against diversion ("shall endeavour" instead of "shall").

Indonesia supported this although it said it would not block consensus.

Argentina, Cuba and China were among countries saying they were still consulting their capitals.

In opening the meeting, Chairman Motta said that the "time is up" for decision. He warned that changes to the text would disturb the balance and unravel it.

At the end Motta summed up the discussions by observing that a large majority were willing to accept the text as it was, at least under certain conditions. He asked those delegations that still have problems to go along with it because the current text is the best possible option open to members.

The statement by Kenya on behalf of the African Group, made available to the media later, said the group had consistently made clear that any solution must be "stable, permanent and of a long-term nature", and that it should "squarely address the restrictions in paragraph (f) of Article31."

Towards this end, the African group with others had suggested a "fairly simple and straightforward" amendment which ought to have been put forward for the consideration of the Council. The African group regretted that though proposed at various stages of the discussion, it had not been substantively considered at the TRIPS Council meeting. Even if amendment proposed to the text, could not be adopted now, it should be included in an annex to the decision, to serve as a working document for the work ahead.

In a spirit of compromise, the African group was willing to join a consensus; but if there be no consensus or if the text is to be reopened, particularly on the scope of the disease coverage, the African group would make it absolutely clear that any proposals to reduce the rights and flexibility in this context would be unacceptable.

In the group's view, some minor improvements could be made to the text without upsetting the overall balance.

The group welcomed the footnote 2 to the text that there would be no precondition that any notification by a country to avail itself of the importing facility would need to be approved by any WTO body. In Africa's view, the language of para 2 (a) of the draft decision should be clearly consistent with this idea and should explicitly state that the notifications are to be made "for information sharing purposes only." A sentence should be added to the footnote that "there shall be no particular format for the notification, and it may take the form of a simple communication."

The requirements about an importing member issuing a compulsory licence before using the system should not in any way affect the rights and obligations of members in terms of para (b) of Article 31 on national emergencies and other circumstances of extreme urgency or for public non-commercial use or governmental use.

The Africa group had not favoured conditions on shaping and colouring of drugs under the decision, since this would increase the cost of the pharmaceutical product, but had been willing to accept special labelling requirements, even though the proponents had made no case even for such a safeguard.

While welcoming the inclusion of the possibility of regional trade agreements being domestic markets for the decision, the language was not clear. It should be made clear that the paragraph on this would not prejudice Article 4 bis of the Paris Convention.

The para 10 of the draft, against raising disputes should include any violation disputes and not merely non-violation disputes as proposed - by mentioning only Art. XXIII 1. (b) and ( c). The majority of disputes raised have been under XXIII 1 (a), and very few under the non-violation provisions.

There should also be a clear time-frame to ensure that the actual work on amending Art.31 (f) did not drag on endlessly. The amendment should be finalised and adapted within six months of initiating the work in the TRIPS Council.

Meanwhile, Consumer Project Technology (CPTech), the US-based international NGO and advocacy group, has asked WTO members to reject the chairman's draft, among other reasons because it restricted the scope of diseases to those in para 1 (a) of the Doha Declaration.

The Director of the CPTech, Mr.James Love, in a note to members, has said that the USTR would likely use the draft as a green light to limit the remit of the declaration to the diseases mentioned in para 1, and exclude others as also focussing on the 'gravity' language - "We recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.."

There is no legitimate reason to focus on paragraph 1 of the Doha Declaration in terms of the mandate to implement paragraph 6, "excepting for the desire of the United States, Japan, Canada, Australia and the European Union to renegotiate the entire Doha Declaration and limit the paragraph 6 'solution' in ways not provided in paragraph 4 of the Declaration, CPTech said.

The scope of diseases for paragraph 6 should be the same as those relevant to paragraph 5 regarding compulsory licensing, namely, the text of paragraph 4 of the Doha declaration."

"It is dead certain that countries will regret ever having agreed that the Doha Declaration is restricted to the public health problems as recognized in paragraph 1 of the Declaration," CPTech said.

The US and PhRMA, with the backing of Japan, EU, Canada and Australia, will hammer away at a solution until it is limited in application to the diseases specifically mentioned in the last part of paragraph 1, CPTech warned.

The lack of clarity in the draft has not been useful for developing countries, and whatever is unclear will work against them, CPTech said.

The CPTech also viewed as "highly protectionist", the footnote 3 of the draft decision which in effect says that the developing countries will not be able to supply the generic pharmaceutical products to the rich countries. even when the rich country is buying from a generic supplier. This will work against technology transfer in very profound ways.

CPTech also viewed the safeguards in the decision on imports and exports as inappropriate, particularly those that require notification to the WTO TRIPS Council. The information required to be provided to the TRIPS Council will be used to increase bilateral pressure on weak countries on both the importing and exporting sides. The WTO will have an explicit mandate to monitor individual licenses, and become deeply involved in issues now left to national discretion under Article 1 of the TRIPS.

This is a major change in the role of the WTO and major loss of sovereignty, CPTech complained.

On the issue of compensation, the draft requires compensation to be determined in the exporting country, which is contrary to any logical analysis of who should determine affordability, a loss of national sovereignty for the importing country, and may undermine compulsory licensing as a means to promote affordable medicines.

The safeguards on re-importation to other countries will be costly for developing countries, and would be used to discourage the use of compulsory licensing. "There is no evidence that generic drugs are being re-imported in the rich countries in any significant amount."

CPTech also viewed the regional trade agreement provision as totally biassed.

The European Union has told CPTech that it intends to have its proposed community patent system to overcome its own regional 31.f problem. But the draft decision would greatly limit such an use in the developing world, because of the requirement that at least half the members be LDCs. "Europe of course is not made up of poor countries!"

The technology transfer paragraph 7 is insultingly weak, and is undermined by the rest of the agreement, such as footnote 3, and also quite importantly in the way the capacity issue is defined.

CPTech asked whether paragraph 9 of the Chairman's text would prejudice a unilateral Article 30 (limited exception to enjoyment of patent rights) case modelled after the EU Amendment 196 (proposed by the EU Parliament) The draft decision text should clarify this issue.

CPTech had asked for such clarification, but this had not been done.

It shows how desperate the US and the EU are to stop an Article 30 case from succeeding.

The Annex provisions on the Assessment of Manufacturing Capacities in the Pharmaceutical Sector are also very narrow, and will likely be used against Nigeria, South Africa, Kenya, Ghana, Brazil, Korea, Thailand, and nearly any other country that has any level of economic development.

"What is so appalling about this section and so important is that the problems should never have been framed in terms of capacity. Canada, the United States, the EU, Japan and others understood intimately that the real issue concerns economies of scale. Last summer, USTR was willing to discuss economies of scale, but then PhRMA took over the US position. In this draft, 'any' economic development in the area of pharmaceuticals will eliminate the usefulness of this solution'."

It should be obvious that the US, EU, Japan, Canada and Australia delegates are controlled by PhRMA interests, and further, that this proposal is designed to limit the importance of the Doha Declaration, prejudice more fundamental and sustainable fixes to the 31.f problems, create more and not less uncertainly regarding what can and cannot be done, give the US and the EU a big public relations bonanza which will be cruelly used as the basis for more bilateral pressure against the use of compulsory licenses and against better export strategies, as well as a basis to leverage additional concessions from developing countries in other WTO negotiations.

"No developing country needs this deal. There is already a 15-year window for exports in Paragraph 7 and other strategies such as 31.k and possibly Article 30 that are better. This 'deal' will be used against developing countries for many, many years.

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