Simon Barber - US presses for clarity on intellectualproperty

[James Love <love@cptech.org>]

>From South Africa's Business Day


05 July 1999
US presses for clarity on intellectual
property

Simon Barber


WASHINGTON - The US government has released
several hostages it took last year to press Pretoria to clarify
that it will not use a vaguely worded clause of its medicines
law to violate its obligations under the World Trade
Organisation agreement on trade-related intellectual
property.

The concessions include waiving duties on certain
vanadium compounds, a food preservative and satellites like
Sunsat, the Stellenbosch University project launched by
Boeing from Vandenberg airforce base in California in
February.

A year ago US Trade Representative Charlene Barshefksy
said that SA vanadium oxide, vanadates and tertiary
butylhydroquinone, an oxidant that stops fats from turning
rancid, would be exempt from duties under the US
generalised system of preferences.

In the same breath, however, Barshefsky withheld the
benefits and others until the SA government made
"substantial progress" on resolving US concerns about the
SA medicines and related substances act, even though the
offending language was, and remains, unimplemented
pending the outcome of a court challenge.

The benefits Barshefsky has now decided to release,
according to a document prepared by her office, were
granted under a "de minimis" waiver; that is, the value of
goods shipped is so small that even though the products are
not on the list of products automatically qualifying for
generalised system of preferences treatment, they are
eligible to receive it nonetheless.

The generalised system of preferences system is a
programme operated in various forms by developed
countries to encourage the nonthreatening exports of
developing ones.

The concessions come as Vice-President Al Gore is being
pilloried by US AIDS activists as a stooge of the
pharmaceutical industry. According to his attackers, he is
denying South Africans access to affordable AIDS
treatment by insisting that the SA medicines act be
consistent with the agreement on intellectual property.

SA shipped vanadium oxides worth $11m to the US last
year, garnering a 99,7% share of US imports, even though
importers had to pay an 11,8% duty. SA vanadates worth
$647000, dutied at 8,9%, accounted for 62% of US imports.

As for the food additive, found to reduce heart enlargement
in copper deficient rats, the US obtained amounts of tyhe
chemical worth $132000 from SA, 57% of its imports, and
charged a 5,8% tariff.

Not only has Barshefksy relented on these items, she has
agreed to extend generalised system of preferences
treatment, not previously sought or given, to SA spacecraft.
The value of the benefit is questionable. Last year, when
Sunsat was delivered to the US for launch with a customs
value of $328000, the duty on such items was 0,7%. Now it
is zero.

Meanwhile, Barshefsky continues to hold hostages. She is
refusing to implement duty waivers she granted under the
generalised system of preferences last year to SA
unwrought and semimanufactured gold, vanadium
nitrocarbide and articulated dump trucks used in mining.

It is too late for Bell Equipment, maker of the dump trucks in
question, to gain any advantage. The US tariff on its
products has fallen to zero. SA exports of electronic and
dental gold and basic jewellery to the US continue to be
hampered by a 4% duty that would have been lifted if not for
the drug patent row.

Strategic Mineral Corporation, principal US importer of
vanadium nitrocarbide, a steel hardening agent, has had to
pay about $1m extra to import the product from SA
subsidiary Vametco and may have to reconsider its SA
investment plans.




-- 
James Love, Director, Consumer Project on Technology
I can be reached at love@cptech.org, by telephone 202.387.8030,
by fax at 202.234.5176. CPT web page is http://www.cptech.org