[Ip-health] Brazil to break US patents

Wed Sep 2 06:09:03 2009

Here is another development in the story.

Asia Russell

--
Asia Russell
Health GAP (Global Access Project)
email: asia@healthgap.org
tel: +1 267 475-2645
http://www.healthgap.org

-----------------------
Brazil wins WTO go-ahead for US sanctions
By Frances Williams in Geneva

Published: August 31 2009 19:12 | Last updated: August 31 2009 19:12

The World Trade Organisation gave Brazil the green light on Monday to
impose $295m (=80206m, =A3181m) of sanctions on US goods over Washington=92=
s
failure to scrap illegal subsidies to its cotton farmers.

However, the trade retaliation granted by a WTO arbitrator was barely
a tenth of the $2.7bn Brazil had asked for.

Brazil will also not be able to carry out its threat to break US drug
patents or retaliate in services unless subsidies rise substantially
from 2006 levels.

Carol Guthrie, spokeswoman for the US trade representative=92s office,
said: =93While we remain disappointed with the outcome of this dispute,
we are pleased that the arbitrators awarded Brazil far below the
amount of countermeasures it asked for.=94

But Roberto Azevedo, Brazil=92s WTO ambassador, claimed the ruling would
entitle his country to impose $800m in retaliation this year,
including $340m of sanctions on intellectual property or services.

The sanctions aim to reflect the economic damage to Brazil of US
payouts to cotton farmers of around $3bn annually.

The subsidies depress world prices and allow 25,000 high-cost American
producers to undercut more efficient or lower-cost competitors.

After the WTO=92s landmark ruling in 2004, the US Congress eliminated
some export credits and in 2006 repealed the so-called Step 2 cotton
marketing programme that compensated US exporters and cotton millers
for using higher-priced US cotton.

But last year=92s US farm bill entrenches other programmes, including
marketing loan payments, countercyclical payments and export credit
guarantees, held to breach WTO rules.

The Obama administration has followed its predecessor in arguing
significant cuts in US cotton subsidies must be contingent on a
successful agricultural deal in the faltering Doha round of global
trade talks.

On Aug 31, 2009, at 11:48 PM, Sean Flynn wrote:

> From: WTO-INTL [mailto:WTO-INTL@LISTSERVER.CITIZEN.ORG] On Behalf Of
> Victor Menotti
>
>
> Financial Times FT.com
>
> Brazil ready to infringe US drug patents
> By Jonathan Wheatley in S=E3o Paulo
> Published: August 30 2009 17:41 | Last updated: August 30 2009 17:41
>
> Brazil is preparing to infringe patents on US pharmaceutical
> products, in
> retaliation against subsidies for US cotton farmers, according to the
> Brazilian press.
>
> The World Trade Organisation is expected to rule on Monday that
> Brazil can
> contravene the drug patents, say the reports.
>
> Brazil led a challenge against US cotton subsidies in 2002 and, two
> years
> later, the WTO ruled that about $3bn paid to US cotton farmers each
> year
> distorted global prices and violated trade rules.
>
> The US has continued the subsidies, arguing that the measures were
> consistent with its WTO obligations. But the WTO has supported
> Brazil=B9s
> case. It allowed Brazil to retaliate in 2005 but Bras=EDlia has
> instead sought
> a negotiated settlement to avoid damaging relations with the US, until
> recently its biggest trading partner.
>
> However, Brazil has become increasingly frustrated by the US refusal
> to
> remove its subsidies and, under pressure from its own cotton
> growers, is
> reported to be preparing to retaliate.
>
> One option would be to raise import tariffs against US goods. But
> Brazil is
> a relatively small US market, taking $32bn out of $1,287bn of US
> exports
> last year.
>
> Instead it is preparing to take action over intellectual property,
> an area
> of much greater significance to the US. The WTO is expected to
> include this
> possibility in its ruling on Monday. According to a report in a
> Brazilian
> newspaper the government has prepared a =B3provisional measure=B2  a
> presidential decree that takes immediate effect, although it must
> later be
> ratified by Congress  to allow Brazilian pharmaceuticals companies
> to copy
> medicines protected by US patents.
>
> In 2007 Brazil followed Thailand in overriding a patent on a pivotal
> HIV
> medicine, allowing it to buy equivalents of Efavirenz, patented by
> Merck,
> from rival generic suppliers under provisions permitted by WTO rules.
>
> The move followed years of brinkmanship during which Brazil achieved
> steep
> discounts on HIV drugs by threatening to break patents.
>
> Its expected move on Monday comes in the context of growing
> frustration in
> Bras=EDlia at the Obama administration=B9s reluctance to act on farm
> subsidies
> affecting cotton and other sectors of Brazilian agribusiness,
> especially
> sugar and ethanol.
>
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>
> Victor Menotti
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