Public Health Outweighs Patents As Deal Paves Way for Broad Trade Talks
Wall Street Journal | November 13, 2001 | By Geoff Winestock and Helene Cooper
DOHA, Qatar -- In a shift that overturns seven years of trade law, negotiators at the World Trade Organization last night were wrapping up a deal that will place the rights of poor countries to import and export cheap generic drugs over the rights of multinational drug companies seeking to protect their patents.
Trade envoys were still haggling over the final details of the agreement. But in a major concession, the U.S. and European Union agreed to a pact which, at a minimum, gives developing countries a much stronger hand in bargaining with drug companies for medicines to treat HIV/AIDS and other health crises. In addition, the deal would give poor countries better access to cheap medicine for illnesses beyond AIDS, such as cancer, diabetes and even asthma.
The U.S. also was poised to concede to demands from Japan and developing countries that America's antidumping rules be put on the table as part of a new round of trade talks.
And completing a day of back-room haggling and hallway wheeling and dealing, Europe looked increasingly likely to give ground in a dispute over farm subsidies that has pitted it against almost every country in the WTO. Even Japan and Korea, traditionally protectionist on agriculture, announced yesterday that they accepted a deal calling for cuts in farm subsidies.
The two Asian nations also said they supported elimination of the EU's export-subsidy program. EU officials are likely to press on until the meeting wraps up today, but Europe's farm-subsidy program is becoming harder to defend.
Yesterday's preliminary deal making made it increasingly likely that the 142 countries in the WTO might emerge from their meeting here with a new round of trade talks, a goal that has eluded the U.S. and Europe for two years. An overall pact would reverse the chaotic collapse of the WTO's last meeting in Seattle in 1999, which saw violent street protests and a revolt by poor countries.
But the new round likely won't go as far as free-traders would like. The WTO was poised yesterday to fob off talks on investment and competition to study groups, with no commitment to negotiate, a key demand of EU Trade Commissioner Pascal Lamy. And U.S. Trade Rep. Robert Zoellick was still refusing increased U.S. imports of textiles from poor countries.
Still, yesterday's preliminary agreement on the drug patents issue shows how far the trade organization has come. "Two years ago, you never could have got anything like this in the WTO," said Jamie Love, director of the Consumer Project on Technology, a nonprofit advocacy group founded by activist Ralph Nader. "This is way better than what was floated in Seattle."
Developing nations want to be able to manufacture, buy and import cheap generics to deal with public health pandemics, without being dragged before the WTO on intellectual-property-rights complaints. The U.S. and EU say they are willing to make concessions for emergencies such as AIDS, but they don't want to weaken the WTO's strong protections for intellectual property to the point that poor countries can manufacture cheap generics for any illness. The issue has been a lightning rod for criticism from poor countries that say they don't benefit from global trade rules. "Rich countries knew the only way they would get anything was if they gave in on this," said Egypt's trade minister, Youssef Boutros-Gali.
Yesterday's draft agreement recognizes countries' "right to protect public health," placing it above the patent rights of pharmaceutical companies. The deal also gives the poorest countries a 10-year delay in implementing patent laws on drugs and allows all countries the right to decide under what circumstances they can break patents of big drug companies during public health crises.
The agreement refers the contentious issue of whether small countries can import generic drugs from countries such as Brazil and India to a committee. "It's too ambiguous. If a CEO of a drug company reads this, he will throw up his hands and wonder what it means," said Harvey Bale, director general of the International Federation of Pharmaceutical Manufacturers.
Mr. Zoellick's decision to allow negotiations on America's antidumping laws, which punish countries that "dump" products on the U.S. marketplace at below cost, is bound to provoke protests in Washington. For the past year, Mr. Zoellick has been trying to get fast-track authority for President Bush to negotiate trade agreements that Congress can approve or reject, but not amend. But lawmakers representing the steel industry won't like the decision to put antidumping on the table, since the steel industry makes much use of America's antidumping laws.
"He'll never get fast track now," said Bill Klinefelter, head of government relations with the United Steelworkers of America.
Battle Over Drug Patents
-- September 2000: Indian company Cipla offers African countries generic AIDS drugs at 90% discount
-- October 2000: U.S., EU and Swiss drug companies follow suit
-- April 2001: U.S. drug companies drop legal case against South Africa for abuse of drug patents
-- June 2001: U.S. drops WTO challenge against Brazilian law on local manufacture of patented drugs
-- October 2001: U.S. and Canada threaten to break Bayer AG's patent for anthrax drug Cipro
-- November 2001: WTO recognizes right to protect public health in applying patents
Copyright (c) 2001, Dow Jones & Company, Inc.Public Health Outweighs Patents As Deal Paves Way for Broad Trade TalksWall Street Journal:
