From Business Day in 1998: US takes trade hostigates in South Africa Medicines Act Dispute.

[James Love <love@cptech.org>]

This is a South African story from last year regarding
the US decision to withhold trade benefits pending 
negotiations over 15(c) of the South African Medicines 
Act.  

(distributed as a fair use under US copyright
laws.)                

http://www.bday.co.za/98/0715/news/news1.htm

Business Day 

15 July 1998 
US withholds benefits over Zuma's bill
Simon Barber
 

   WASHINGTON - US President Bill Clinton's trade
negotiators are withholding trade benefits from SA to back
up the US drug industry's complaint that its intellectual
property rights are being threatened by government's
efforts to reduce medical costs via the Medicines and
Related Substances Control Amendments Act.

The tactic, unannounced by the office of the US trade
representative but confirmed by multiple sources, comes as
talks to resolve the dispute have effectively been suspended
pending the outcome in SA courts of a constititutional
challenge to the act.

Rosa Whittaker, US assistant trade representative for
Africa, has told government that recently announced
decisions granting or extending duty-free treatment to a
range of SA products - including gold for electronics and
dentistry, heavy construction vehicles and certain vanadium
compounds - will not be implemented until government has
made "substantial progress" in satisfying US demands.

Among companies affected is Connecticut-based Strategic
Minerals, whose imports of vanadium carbonitride, a steel
additive, from SA subsidiary Vametco were $16m last year
and $9,5m in the first four months of this year.

Stratcor had successfully petitioned for the material, of
which SA is the world's principal source, to be kept on the
list of goods on which the US waives duties. The company
argued that the money it would save on imports otherwise
facing tariffs of 3,7% would enable it to increase its
investment in Vametco.

Preferences for semi-manufactured gold otherwise facing
duties of 5% were sought by government as part of its
strategy to promote the local beneficiation of SA minerals
for export.

Bell Equipment, an SA heavy construction and mining
equipment manufacturer, requested preferences for a class
of heavy off-road dump truck it exports in kit form for
assembly by its US subsidiary. Removal of the 10% duty, it
said, would enable it to expand exports by 150 trucks a year.

All three petitions, and several others covering smaller SA
exports, were initially approved by the White House.
However, the office of the US trade representative used its
discretion to stop the decisions going into effect.

The office, which unlike other departments is directly a part
of the White House bureaucracy, has already placed SA on
its "watch list" of intellectual property violators because of
the medicines legislation that gives Health Minister
Nkosazana Zuma the power to abrogate patent rights as a
price control measure.

Tom Bombelles, of Pharmaceutical Research and
Manufacturers of America, said he was aware of the
administration's suspension of benefits and welcomed it as
"the type of thing we are looking for them to do".

It remains unclear what SA authorities must do to
demonstrate the "substantial progress" the US is demanding
to release what one US trade lawyer, representing an
affected importer, called the "hostages" taken by the US
trade representative.

-- 
James Love
Consumer Project on Technology
http://www.cptech.org
love@cptech.org
202.387.8030; fax 202.234.5176