[Ip-health] Congress Daily on FTAs & Thailand

[Benjamin Krohmal]

Congress Daily
By Martin Vaughan

TRADE
New Language Would Give Developing Countries Leeway On Pharmaceuticals

      New language to be added to trade agreements is designed to
give poor countries more leeway to get around patent and other
restrictions on pharmaceuticals, by going further than the
flexibility already included in side letters to agreements with Peru
and Panama, according to House and private sector sources.
      The new text, in the final stages of discussion between
Democrats and U.S. trade officials, will bring exceptions to
intellectual property rules closer in line with the 2001 Doha
Declaration on those rules and public health, these sources said.
      That declaration aimed to make sure that developing countries
could take steps to protect public health, including issuing
compulsory licenses to override patents.
      A bipartisan, conceptual agreement struck between lawmakers and
the administration in May provided that the side letter, which has
been a part of free-trade deals since the U.S.-Morocco trade
agreement, will be incorporated into the text of agreements with
Peru, Panama, Colombia and South Korea.
      Democrats have long pushed for that step because they argue
that side letters do not carry the same legal weight and
enforceability as agreement text.
      The conceptual deal also envisioned making direct reference to
the Doha Declaration in the text of trade agreements. But sources
said it is likely the text will also alter the wording of the side
letter to make it more closely match that of the declaration -- a
step that pharmaceutical firms have pressed U.S. officials to oppose.
      "Simply taking the side letter and plugging it into the text of
the agreement was fine with us," said one industry source. "If there
are changes, we will have to see what the changes are."
      The side letter to the U.S.-Peru deal on exceptions for public
health states that the agreement's provisions "do not affect a
Party's ability to take necessary measures to protect public health
by promoting access to medicines for all, in particular concerning
cases such as HIV/AIDS, tuberculosis, malaria, and other epidemics as
well as circumstances of extreme urgency or national emergency."
      House Ways and Means Trade Subcommittee Chairman Sander Levin,
D-Mich., persuaded U.S. trade officials to drop the word "necessary"
from that formula, which does not occur in the related section of the
Doha Declaration, sources said.
      Public health advocates have also urged striking the language
regarding "circumstances of extreme urgency or national emergency,"
which could be seen as limiting situations in which Doha
flexibilities can be applied. However, that language will remain in
the FTA text.
      Intellectual property and health provisions were among the
final sticking points in negotiations between Levin, Ways and Means
Chairman Rangel, and the administration on the final text, which also
included labor, environmental, and investment provisions.
      That text has still not been completed, but U.S. trade
officials are hoping to finalize it in time for agreements with
Panama and South Korea to be signed next week.
      Health activists said the new language stressing the primacy of
the Doha Declaration is important, because the side letter left
ambiguity as to whether obligations to protect pharmaceutical test
data in the deals would keep needed medicines from coming to market,
even after a country had broken patents on the drugs.
      "Where the rubber hits the road is on data exclusivity and
compulsory licensing," said Robert Weissman, director of Essential
Action. "The question is: Is data exclusivity going to be an
effective prohibition on compulsory licensing?"
      Activists and their Democratic allies have long pushed the
administration to back off the more stringent protections for brand-
name drugs in trade deals -- including the requirement that countries
prevent test data from being used to bring generics to market for a
five-year period after the brand-name version has been registered.
      "If the U.S. is able to get more and more countries to adopt
these standards, it becomes increasingly difficult for the remaining
ones to resist doing more than [multilateral agreements] require,"
said Weissman.
      The issue has taken on increased importance with recent moves
by Thailand and Brazil to issue compulsory licenses to manufacture
generic versions of treatments for HIV/AIDS and other afflictions.
      Thirty-five House Democrats led by Reps. Henry Waxman of
California and Tom Allen of Maine Wednesday criticized Trade
Representative Schwab in a letter for naming Thailand a "priority
foreign country" in the trade office's annual list of intellectual
property rights violators. They called on Schwab to reverse that
designation.
      "It is difficult to interpret this decision as anything other
than retaliation for Thailand's recent actions. It sends a troubling
message, not only to Thailand but to the whole world, that the
exercise of recognized public health flexibilities in trade
obligations is frowned upon by the United States," the lawmakers wrote.
      The House Democrats wrote that they were concerned that the
"Special 301" citation would lead to a suspension of duty-free
benefits for Thailand under the Generalized System of Preferences.



Benjamin Krohmal
Coordinator - Project on Medical Innovation
Knowledge Ecology International
Tel: +1-202-332-2670 ex. 17
Fax: +1-202-332-2673
ben.krohmal@keionline.org