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CPT Comments on WTO, e-commerce, health care & trade, etc
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Info-Policy-Notes | News from Consumer Project on Technology
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October 16, 1998
CPT comments to United States Trade Policy Staff
Committee on WTO
The folowing are CPT's October 16, 1998 comments
to the U.S. Trade Policy Staff Committee on the
WTO. CPT was repsonding to a Federal Register
notice for comments that was first scheduled to
close today. The USTR has extended the deadline
for comments to next Wed. People who want to
submit comments and need help should contact
Catherine Gavin <cgavin@cptech.org>. The FR
Notice is available at:
http://www.essential.org/listproc/pharm-policy/msg00228.html
CPT's comments today focus on four issues, the WTO's
emerging role in electronic commerce, public health
and trade disputes, business practices patents and
consultation with consumer interests.
I am finishing detailed notes from the October 8-9
OECD meetings on electronic commerce, which will
be sent to inf-policy-notes over the weekend.
Jamie Love <love@cptech.org>
202.387.8030
(This document is on the web at:
http://www.cptech.org/ecom/ustrwto.html)
<------------------begin TPSC Comments-------------------->
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
http://www.cptech.org
202.387.8030; fax 202.234.5176
October 16,
1998
Gloria Blue, Executive Secretary
Trade Policy Staff Committee
Office of the U.S. Trade Representative
Room 501, 600 17th
Street, NW, Washington, D.C., 20508
Re: FR Notice on WTO agenda
Dear Ms. Blue:
Thank you for the opportunity to respond to the Trade
Policy Staff Committee request for comments on the 1998 WTO
Ministerial Meeting and the WTO work program. The Consumer
Project on Technology is a non-profit advocacy organization
created by Ralph Nader in 1995. Extensive information about CPT
and our activities are on the Web at http://www.cptech.org.
1. Electronic Commerce.
Our concerns and suggestions for the WTO work program on
electronic commerce are as follows.
A. Privacy.
First, apparently the United States and some officials from
the European Commission (EC) have raised the issue of the WTO
having broad jurisdiction over privacy matters. It is far from
obvious that such jurisdiction would be appropriate. Given the
WTO s generally poor reputation among consumer groups and its
lack of expertise in this area we assume the WTO should not have
jurisdiction. At a very minimum, the USG should request public
comments from privacy and consumer groups on the issue of how
the U.S. might proceed in terms of seeking international bodies
to facilitate dispute resolutions or the coordination of public
policies on privacy protection. There may be different
approaches that need to be considered. For example, some
privacy groups such as EPIC (http://www.epic.org) have suggested
the USG should view privacy matters in the context of human
rights. In general, however, the USG should be extremely
cautious in expanding the WTO s jurisdiction on privacy matters
at this time.
To see what one might expect from the WTO on privacy, one
might push the WTO staff to examine the privacy aspects of
matters currently under the WTO jurisdiction. Then privacy and
consumer groups can better judge the WTO s expertise and
sensitivity to privacy from a human rights perspective.
For example, we would like to see the WTO examine the issue of
digital copyright enforcement and privacy protection, to see if
this body can elevate current discussions regarding intellectual
property protection for digital works, to discussions of how
best to balance enforcement efforts with the public interest in
protecting personal privacy. As you must know, most citizens of
the United States consider personal privacy to be worth
protecting, and it is your job to see that it is protected in
electronic commerce. As you may also know, during the OECD
meetings in Ottawa on October 8-9, 1998, the joint NGO statement
encouraged governments to seek IP protection mechanisms that
were least intrusive to personal privacy. As you should also
acknowledge, privacy and political freedom are closely related
issues, particularly on a global scale. If the WTO could do
something productive and useful on this issue, one might be
interested discussing further activity.
B. Parallel Imports
Electronic commerce is marking a mockery of U.S. bilateral
trade pressures against parallel imports of copyrighted or
patented goods. During recent debates in New Zealand over
legislation that legalized parallel trade for all copyrighted
goods, the U.S. Ambassador admitted that he bought most of his
books from http://www.amazon.com. With the economy becoming
more global and electronic commerce crossing national borders,
our opposition to parallel imports is becoming an intellectual
joke. Also, how do you expect small economies like New Zealand
or South Africa to voluntarily tell their own citizens they
cannot obtain the best world prices on goods and services?
C. Consumer Protection
The biggest and most difficult problem in electronic
commerce is the challenge to thousands of different consumer
protection measures that face very difficult enforcement
problems in electronic commerce. While some USG officials have
been quoted as supporting an end to all government consumer
protection efforts in cyberspace, these are people who are
basically ignorant of the substance of these measures. They
also apparently are not aware that the history of simplistic
utopian promises of self-government by private industry cartels
has repeatedly failed in the very areas where governments have
ultimately been compelled to act.
We have taken an interest in several particular problems,
most notably the registration and disclosure requirements for
marketing securities, rules regarding unethical advertising and
marketing of pharmacuticals and medical devices, truth in
advertising for lending and credit practices, limits on the
marketing of cigarettes, and unsolicited commercial announces by
electronic mail (junk email). These are just a tiny fraction of
the issues which are presented in cross-border electronic
commerce.
At present it is difficult to conceive of a useful role
for the WTO in these disputes, even though some kind of
international cooperation and leadership seems badly needed.
This is because the WTO has such low credability outside of the
business community. Part of this is probably due to the fact
that the WTO is run by trade ministers, and all over the world
these bureaucrats act as if their only mission is to promote the
interests of businesses. They lack sensitivity and
creditability on consumer protection issues.
One mission for the USG would be to begin the long overdue
process of restructuring the WTO to more formally involve the
appropriate government officials that have responsibility for
various consumer protection issues. In this respect, we suggest
the USG create a special task force of USG agencies and
officials that have responsibilities for consumer protection,
and ask this task force to offer concrete suggestions regarding
changes in the WTO that would give the agency greater
credibility in the area of consumer protection. This process
should also involve opportunities for public comment.
D. Contracts of Adhesion
One of the difficult issues for electronic commerce is the
status to be accorded to various contracts which consumers are
asked to approve when they deal with various web pages. These
click on contracts often involve many unreasonable provisions.
This has been a huge problem in the United States in debates
over the proposed Section 2B of the Uniform Commercial Code (see
http://www.cptech.org/ucc).
In this respect, we urge the USG trade negotiators to be
extremely cautious in creating the presumption that these
contracts should be enforceable. Consider, for example, that
these contracts include such terms as complete elimination of
the right to seek legal redress for non-performance, non-compete
clauses, and clauses prohibiting public criticisms or negative
reviews or products, to mention just a few. (See
http://www.badsoftware.com).
2. Public Health and Trade Disputes.
This week a committee of the World Health Assembly (WHA) is
meeting in Geneva to discuss the context in which trade disputes
with public health consequences will be addressed. These cover
a lot of ground, from trademark issues involving cigarettes,
breast milk substitutes and generic drugs to standards for the
protection of investments in health registration data, to
compulsory licensing of medical technologies. Many public
health and consumer groups are seeking a formal statement by the
WHA and other international bodies that clearly states that
public health considerations are paramount in such disputes. We
are also asking that the WTO create a system of consultation
with the World Health Organization on matters concerning trade
and health care.
Apparently there is resistance to these proposals from U.S.
government officials. Indeed, U.S. FDA international affairs
officials such as Dr. Stuart Nightingale and some U.S. State
Department officials very aggressively opposed these measures
during the May 1998 WHA meetings in Geneva, as did major
pharmaceutical companies. We have subsequently met with FDA and
State Department Officials to discuss these matters and we
believe it is possible to establish a process for WHO
consultations that recognize the levels of protections of
intellectual property that have already been established in the
GATT/TRIPS accords, while providing a context for evaluating
implementation of these rights under widely accepted public
interest criteria that is not dissimilar to constitutional basis
for patent protection in the United States.
We are particularly concerned about disputes that will
predictably occur when countries seek to use compulsory
licensing to broaden access to AIDS drugs and other important
medical therapies. With experts claiming that 13 percent or
more of the entire population of some African countries suffer
from HIV infection, this is an extremely important issue.
Moreover, it is clear that U.S. officials who are involved in
AIDS policy need to be briefed and included in policy making on
these issues.
Please incorporate also our attached July 28, 1998 comments
on health care and intellectual property for the FTAA
negotiations. (On the web at:
http://www.cptech.org/treaty/ftaa/ftaa-290798.html).
3. Business Practices Patents.
One area where there has been almost no sustained analysis
is the rise of various business practices patents. These often
involve patents covering routine business practices that use
computers or telephones, such as the Franco Modigiliani and
Francis Vitagliano patent on the use of a credit card to borrow
money from a 401 K pension plan. (United States Patent
No.5,206,803, for a "System for enhanced management of pension-
backed credit). Certainly better known was the so called e-
commerce patent which claimed a legal monopoly on all internet
commerce. We are told that pharmacuetical companies are making
certain claims regarding marketing practices for pharmacuticals
in South Africa. We have asked in a variety of forums that such
patents be banned as inappropriate, anticompetitive, and as
failing to meet the U.S. public interest standards. We ask for
a broader public dialogue on such patents.
4. Consultation with Consumer Interests.
The newly formed Trans Atlantic Consumer Dialogue (TACD)
will be creating a working group on electronic commerce. We
urge UGS officials to work closely with this working group. CPT
is working with several public interest groups on trade and
intellectual property issues, and would appreciate suggestions
on which USG officials can brief these groups on the various IP
related trade negotiations, including the TRIPS review at the
WTO, the FTAA, APEC and Trans-Atlantic free trade negotiations
and other relevant intitiatives.
Sincerely,
James Love
Director
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