Bridges Weekly Trade News Digest • Volume 7 • Number 29 • 28th August 2003

WTO Members Expected To Agree On Trips & Health Pre-Cancun

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WTO Members are expected to adopt the 16 December (draft) Decision on paragraph 6 of the Doha Declaration on the TRIPs (Trade-related Aspects of Intellectual Property Rights) Agreement and public health together with a statement by the TRIPs Council Chair Ambassador Vanu Gopala Menon of Singapore. The statement aims to dispel US concerns over the possible abuse of the Decision. Civil society groups rejected the Chair’s statement, which they said would discourage countries from using the system at all and would heavily restrict generic production.

The Chair’s statement, which he had hammered out with the US, Brazil, India and South Africa, begins by stating Members’ commitment to using the system established by the paragraph 6 Decision (see BRIDGES Weekly, 20 December 2002) "in good faith to protect public health" and not as "an instrument to pursue industrial or commercial policy objectives".

The statement goes on to stress the need to prevent diversion of cheap drugs (including active ingredients) to developed country markets, noting Members’ understanding that "in general special packaging and/or special colouring or shaping should not have a significant impact on the price of pharmaceuticals". This differs from the draft Decision, which states that special packaging should only be required "provided that such distinction is feasible and does not have a significant impact on price". The statement furthermore includes "best practice" guidelines used by the pharmaceutical industry and lists specific examples of such measure, including those used by Novartis, Pfizer and Merck.

The statement also notes that Members will seek to resolve any issues arising from the decision "expeditiously and amicably," with the possibility to call on the Director-General or the TRIPs Council Chair to find a "mutually acceptable solution" in case of concern over the implementation of the Decision. Neither the draft Decision nor the Chair’s statement make reference to WTO dispute settlement.

Regarding the eligibility of countries, the statement includes a list of 23 developed countries that have decided to opt out of the decision, while the 10 accession countries to the EU agree to use the system in case of national emergency only until they become members of the EU, after which time they will not use the decision at all. The statement originally included a list of advanced developing countries, which would only use the system in case of emergency. This was dropped, and the countries’ decision to partially opt-out will be announced to the membership in the General Council rather than being incorporated in the statement. The countries that had been included in the statement are Chinese Taipei, Hong Kong, Israel, the Republic of Korea, Kuwait, Macao, Mexico, Qatar, Singapore, Turkey and the United Arab Emirates.

In response to questions by Venezuela and the Philippines regarding the legal weight of the Chair’s statement, Menon quoted the statement, which notes that it "represents several key shared understanding among Members". According to trade sources Ambassador Segio Marchi of Canada described the Chair’s text as a "political statement," implying that the text was not legally binding.

The statement has yet to be adopted by the TRIPs Council. Both the statement and the draft Decision will then be presented to the General Council for adoption, where a number of countries are expected to announce their decision to only use the system in case of national emergency. The final decision is currently expected for late Thursday or Friday.

Chair’s statement opposed by civil society groups

Civil society groups, including Médicins sans Frontièrs (MSF), Oxfam, Health Action International, Third World Network, Health GAP and Consumer Project on Technology, rejected the Chair’s statement, denouncing the conditions it imposes as a discouragement for developing countries to use the system. Describing the 16 December draft Decision as "a monstrosity that seems to be designed to be a solution that won’t work", Ellen ‘t Hoen of MSF noted that "the proposed deal poses so many hurdles and hoops to jump through that we are really worried it may not work at all". She also pointed out that the TRIPs & health discussion seemed to have lost its focus, being more about giving comfort to the pharmaceutical industry than about access to medicines. Commenting on the statement, ‘t Hoen criticised the apparent assumption that protecting public health and pursuing industrial or commercial objectives were contradictory objectives. She also expressed surprise that no Member had objected to include the list of ‘best practices’ by big pharmaceutical companies in the statement, which she said provided "free promotion of companies in a WTO text".

ICTSD reporting; "WTO Chairman circulates text to break TRIPs/Medicines dealock; Agreement Seen," WTO REPORTER, 28 August 2003; "MSF’s comments on the draft chairman’s statement of 21 August ‘03," MSF, 26 August 2003.