WTO Ministerial Section • Volume 7 • Number 1 • 15th January 2003

EU Initiative Seeks to Break Deadlock in TRIPS & Health Negotiations

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Following the breakdown of talks on paragraph 6 of the Declaration on TRIPs (Trade-related Aspects of Intellectual Property Rights) and health late last year, the EU put forward a proposal on 10 January to involve the World Health Organization (WHO) in decisions on whether a particular disease would be covered by the solution. While not rejecting the idea outright, the US preferred to await reactions from other countries before responding to the proposal. The EU’s initiative found a less than enthusiastic welcome among developing countries, while health activists strongly criticised the proposal, arguing that it might be time to move the debate out of the WTO.

According to paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health, the TRIPs Council must find an expeditious solution by the end of 2002 to the problems countries may face in making use of compulsory licensing (i.e. allowing the use of a patent without the consent of the patent-holder under certain conditions) if they have insufficient or no pharmaceutical manufacturing capacity. The perceived need to address this issue arose from concerns related to Art. 31(f) of the TRIPs Agreement, which requires that production under compulsory licensing must be primarily for the supply of the domestic market.

EU proposes compromise on disease coverage, joins moratorium

The EU proposal aims to find a compromise on the disease coverage of the paragraph 6 solution — the key outstanding issue in the negotiations. This question led to the breakdown of talks in the early hours of 21 December 2002 when the US was the only country to reject the TRIPs Council Chair’s 16 December 2002 draft solution over concerns that reference to paragraph 1 of the Doha Declaration covering "public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics" was too broad (see BRIDGES Update, 2 January 2003, http://www.ictsd.org/ministerial/cancun/TRIPs_update.htm).

In its proposal, the EU puts forward a list of "at least" 23 infectious diseases. This list could be further expanded based on advice from the WHO which, when requested by a Member, should "give advice on the occurrences in an importing Member or the likelihood thereof, of any other public health problem". The US had suggested this list in a last- minute attempt to reach a deal, plus "other epidemics of comparable gravity and scale", including those that might arise in the future. Developing countries, however, had rejected this proposal, arguing that it would restrict the mandate given by the Doha Declaration, which refers more generally to "measures to protect public health" (para. 4).

The EU also announced that it would join the US and Switzerland in their decision to not initiate WTO disputes against countries that export drugs produced under compulsory licenses to countries in need. In contrast to the US and Switzerland, however, the EU’s interim moratorium is not limited to HIV/AIDS, malaria, tuberculosis and other infectious epidemics. EU Trade Commissioner Pascal Lamy stressed that this moratorium was "a purely stop-gap, temporary measure" which did not provide a permanent, stable solution. One US official, however, noted that the unilateral moratorium provided an adequate means to help poor countries to deal with public health crises. "What we’re looking for on TRIPs is a rational middle ground, and I think we’ve found it in the unilateral measures we’ve taken," the official added. Throughout the negotiations, the US has favoured the use of a moratorium for dispute settlement or a waiver of the obligation in Art. 31(f) as their preferred paragraph 6 solution.

Developing countries not satisfied with EU initiative

Most developing countries expressed their dissatisfaction with the EU proposal, reiterating their position that the scope of the solution should not be discussed, as this would amount to a re-opening of the Doha Declaration. "It almost seems as if the Europeans hadn’t listened" during the informal consultation late last year, one observer noted. One trade source pointed out that the EU was trying to merge two proposals put forward last year, i.e. the US proposal on the 23 diseases and another proposal by the EU that notifications under the solution should also be submitted to the WHO. Both of these had been rejected by developing countries and it seemed "illogical" that the EU would expect its new proposal to be accepted, the source added. Another source questioned the reasoning behind restricting the coverage of public health problems for countries without production capacity while countries with production capacity were not subject to such limits when dealing with their health problems.

Developing countries are now watching the Second US-Sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum), underway in Mauritius from 13 to 17 January, where they expect US high-level officials attending the summit — including USTR Robert Zoellick and Secretary of State Colin Powell — to put pressure on African ministers (BRIDGES Weekly will report on the outcomes of the Forum in the forthcoming issue).

Other reactions

Health activists strongly criticised the EU initiative, regarding it as an attempt to re-write the Doha Declaration. "It’s a pathetic proposal," said Celine Charveriat from Oxfam, adding that the EU was "clearly breaking the promises made to developing countries in Doha by siding with the US on this issue." According to James Love from the US-based Consumer Project on Technology, the EU proposal showed that it might be time to take the medicines issue out of the WTO, which was "clearly out of its depth", and to hand it over to the WHO.

For their part, drug industry sources regarded the proposal as too broad and noted that it would put decision-making power in the hands of the WHO, which they claimed had in the past been hostile to drug companies’ interests. Harvey Bale of the International Federation of Pharmaceutical Manufacturers Associations described the proposal as a "Pandora’s Box", expressing particular concern over the EU’s reference to "other public health problems", which he said could seriously undermine patent rights on a wide array of medicines.

Looking ahead

At the 20 December 2002 meeting, WTO General Council Chair Sergio Marchi of Canada proposed that the TRIPs Council should restart its deliberations as soon as possible with a view to reaching agreement by the next meeting of the General Council on 10-11 February 2003. Lamy echoed the need to continue negotiations, which he expected to restart "immediately". While a US official thought that the US moratorium provided an adequate solution even if no overall agreement was reached, he did not rule out further negotiations. One developing country source, however, questioned the need to restart negotiations, arguing that no movement could be expected if countries did not change their positions, an unlikely prospect at this stage.

The Chair’s 16 December draft decision is available at http://www.ictsd.org/ministerial/cancun/docs/TRIPs_para6_16-12-02.pdf.

ICTSD reporting; "EU outlines plan for breaking TRIPs/Drugs deadlock at WTO; targets scope of coverage," WTO REPORTER, 10 January 2002.