Simon Barber: USTR is forever - Gore is impermanent

[James Love <love@cptech.org>]

I have just returned from 2 weeks of off-line vacation.  This
report by Simon Barber is fairly interesting.  (He says the AIDS
activists are "noisy but unrepresentative," a few days before the
August 23, 1999 New York Times editorial endorsing the AIDS
activists agenda).  Barber reports a split between Vice President
Gore and USTR about the South African dispute, and it also
reports that SA Minister of Trade Alec Erwin favors a settlement
with USTR rather than with Vice President Gore.  According to
Barber:

     . . . the important point is that a deal with the
     representative, whose interests and policy are
     permanent until Congress tells it otherwise, is far
     more valid than one with a presidential candidate who
     lets himself be cowed by a handful of noisy but
     unrepresenative AIDS activists. Gore may be more
     amenable at this moment than the trade representative.
     However, Gore is impermanent. . . The trade
     representative, whoever appoints its boss, is forever.



http://www.bday.co.za/99/0818/news/n6.htm


                            18 August 1999 
              STARS AND STRIPES 
by Simon Barber

SA between a rock and a hard place on Trips
arrangement


JUSTIFYING its decision to keep SA on its list of
intellectual property violators, the office of the US trade
representative said in April: "SA's medicines act appears to
grant the health minister ill-defined authority to issue
compulsory licences, authorise parallel imports and
potentially otherwise abrogate patent rights."

Last month, representative's intellectual property
commissar, Joe Papovich, told a congressional committee
that "contrary to our general approach, we raise no
objection to compulsory licensing or parallel importing of
pharmaceuticals on the part of SA, as long as it is done in a
way that complies with Trips", the World Trade
Organisation (WTO) agreement on intellectual property.

This was a concession. Hitherto, it had been the official
policy of the US government, mandated by Congress in the
Uruguay Round Agreements Act, to press Trips signatories,
like SA, to provide patent protections stronger
("Trips-plus") than those they had agreed to in the treaty,
Trips being an untidy compromise from the US standpoint.
Under Trips, governments are specifically, though
conditionally, allowed to assign patent rights to domestic
third parties (compulsory licensing) for the public good and
may not be challenged in the WTO if they allow patented
items to be imported through channels not authorised by the
patent-holder.

However, the representative's office has applied the screws
to a number of countries for threatening to exercise these
rights. Now, it seemed, SA was to be given a special break
"contrary to our general approach".

Though not hiding its unease, the trade representative had
little choice after US Vice-President Al Gore had written to
James Clyburn - chairman of the congressional black
caucus - that "I want you to know from the start that I
support SA's efforts to enhance health care for its people,
including the country's efforts to engage in compulsory
licensing and parallel importing of pharmaceuticals, so long
as they are done in a way consistent with international
agreements".

Gore adopted this formula to inoculate himself against
non-mainstream AIDS activists who were dogging his
presidential election campaign with charges that he was a
stooge of the drug industry. They claimed that, as
chairman of the US-SA binational commission, he was
bullying Pretoria into forswearing the use of parallel imports
and compulsory licensing as a means to obtain cheap AIDS
medicine for SA's poor, who were therefore dying for want
of AZT and other such death-delaying HIV palliatives.

The US drug industry was appalled by Gore's apparent
wobbliness and the precedents it might set, especially since
he was also suggesting that all SA had to do to satisfy
official US concerns was to issue a statement approved by
the trade representative's office, pledging compliance with
Trips.

Not only was this an abandonment of policy, but it put
Pretoria under no obligation to remove the root of all the
trouble, the still potentially operative language of section
15(c) of the 1997 Medicines and Related Substances
Amendments Act, which gives the country's health minister
carte blanche to violate existing, Trips-compliant, SA
patent law.

Section 15(c) has been challenged in the Pretoria High
Court by the SA Pharmaceutical Manufacturers
Association and 41 co-petitioners - among whom are
several SA companies and the local subsidiaries of US and
European companies.

The litigants are currently negotiating an out-of-court
settlement with the health minister, Manto
Tshabalala-Msimang, who raised hopes of a compromise
by stating that she saw the industry as a partner rather than
an antagonist, as her predecessor allegedly had done. 

At a closed-door meeting last week with Gore's people,
trade representative officials and White House AIDS tsarina
Sandra Thurman, the US companies urged the country's
administration not to do anything that would interfere with
the pending court settlement in SA.

"We need to be clear this is a South African issue to be
settled in SA," said participant Tom Bombelles of
Pharmaceutical Research and Manufacturers of America.
"It is important that the process be allowed to proceed on its
own."

Bombelles' fear, though he avoided saying so for the record,
was that if the US officially agreed 15(c) could live, so long
as clarified by a statement and supporting regulations, the
SA government would not feel obliged to relinquish the
clause, whose removal, Miryenna Deeb of the SA medical
association, said this week was a non-negotiable demand
on the part of the litigants. Deeb argued that so long as
article15(c) survived, government could prevent drug companies
asserting their rights under existing SA Trips-plus patent law.

The trade representative's office, whose constituencies are
the US industry and Congress and which, though officially a
White House agency, could not care a hoot about Gore's
travails on the campaign trail, is refusing most pedantically
to accept the draft statements Pretoria has been sending it.
Meanwhile, Gore's people have suggested short-circuiting
the representative's objections with a political agreement
signed by Gore and President Thabo Mbeki which would be
announced and presented, like Gore's earlier formula, to its
officials as fait accompli. Interestingly, Trade and Industry
Minister Alec Erwin is said by diplomats to be eschewing
the political route, preferring to settle the matter face to face
with Charlene Barshefsky, the office's head. Also, the
sources say, he is not prepared to talk in the context of
getting SA removed from the list, which he sees as a
WTO-inconsistent unilateral US mechanism for browbeating lesser
nations.

That is pregnant because the office has said its listing of SA
is subject to a review - that is, negotiation next month. SA
will evidently not be taking part, unless the US agrees to
couch the context differently.

Erwin's approach is correct, even if a little brash about the
listing process, which virtually all US trading partners have
to endure. The important point is that a deal with the
representative, whose interests and policy are permanent
until Congress tells it otherwise, is far more valid than one
with a presidential candidate who lets himself be cowed by
a handful of noisy but unrepresenative AIDS activists. Gore
may be more amenable at this moment than the trade
representative. However, Gore is impermanent.

The trade representative, whoever appoints its boss, is
forever.
-- 
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