WTO TRIPS Council Addresses Non-Violation, Paragraph 6 Drug Exports

The World Trade Organization intellectual property committee today addressed exports of cheaper medicines, and disputes that could arise even when there is no WTO violation. Tomorrow it will decide the hot-button issue of how long least-developed countries have to comply with international IP trade rules – on which LDCs said today they are ready to talk about a deal.

The WTO Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is meeting on 15-16 October.

The committee concluded a review of a TRIPS waiver that allows countries to produce pharmaceutical products under compulsory licence for export to countries in need, recommending the extension for two more years of the period for countries to ratify the TRIPS amendment. Separately, the committee suspended discussion on the impending expiration of a moratorium on disputes at WTO over actions by governments that do not technically violate any WTO agreement.

LDCs Ready to Talk on Extension

Still to come is the biggest issue of the week – the proposed extension of a waiver allowing least-developed countries not to enforce IP rights – set to be discussed tomorrow. The waiver is set to expire on 1 January 2016.

On the extension, requested by Bangladesh on behalf of the LDCs, an LDC representative told Intellectual Property Watch that many bilateral meetings have been held, but the group is still holding on to its proposal.

“If they (US and Switzerland) come up with another proposal then we are ready to discuss,” the official said. “But if they don’t come with a [relatively] attractive proposal, why should we be the one to move?”

Also tomorrow will be a discussion on intellectual property and innovation: entrepreneurism and new technology.

Members discussed the so-called Paragraph 6 system but did not propose any substantive changes or depart from past positions, participants said.

India with support of others raised a proposal again to hold a stakeholder workshop on Paragraph 6 within the TRIPS Council, but this was again defeated by developed countries, the sources said.

The WTO recently conducted an in-depth study on the Paragraph 6 system (IPW, WTO/TRIPS, 12 October 2015), complete with suggestions for ways to analyse the system and take it forward.

Paragraph 6 refers to the 2001 Doha Declaration on TRIPS and Public Health. Under TRIPS, countries can issue compulsory licences for pharmaceutical products, as long as it is predominantly for their domestic market. But members recognised that some countries lack pharmaceutical production capacity and could not benefit from this. In 2003, members fulfilled paragraph 6 of the declaration by agreeing to a TRIPS waiver to allow production under compulsory licence for export to these countries that cannot produce it themselves.

In 2005, the Paragraph 6 waiver was accepted as an amendment to the TRIPS Agreement, but so far not enough countries have ratified it to go into effect. Today, members agreed to extend the period for ratifications for another two years, according to participants. Now the decision goes to the WTO General Council. There is momentum on ratifying, with six countries ratifying since the last TRIPS Council meeting in June, according to a WTO source.

Non-Violation Complaints

Today members discussed the upcoming expiration of a moratorium on “non-violation complaints” related to the TRIPS Agreement.

Peru presented a draft decision [pdf] on behalf of a group of 17 developing countries to permanently ban IP-related non-violation complaints.

According to a participant, the US and Switzerland say if there is no agreement by year’s end, the moratorium just ends, while moratorium proponents said Article 64 requires consensus either way (ending or extending the moratorium). It was also raised how the complaints would proceed if instated, and whether it would end up being a dispute panel that decides on such complaints related to TRIPS.

India and others have raised concern that non-violation complaints could be used to undermine developing country flexibilities in applying TRIPS and in their national laws.

Package with E-Commerce Tariff Moratorium?

In the past, extension of the moratorium on non-violation complaints has been tied to a moratorium on e-commerce tariffs, that is, no tariffs on “electronic transmissions.” (See related article here) This may be happening again, a source said, in which talks would progress informally and some weeks before the December ministerial, an agreement would be struck.

The chair of the TRIPS Council is Saudi Amb. Al-Otaibi, but Panama Amb. Alfredo Suescum was named interim chair today in Al-Otaibi’s absence. Suescum is also chairing the e-commerce talks.

Non-violation complaints arise when country A can start a dispute with country B if country A feels that country B has taken an action depriving A of expected trade benefits, even without having breached any WTO rules.

According to the WTO, the moratorium has been extended from one ministerial conference to the next for years. The last WTO ministerial conference in December 2013 asked the TRIPS Council to make a recommendation on the moratorium and whether it should be made permanent or not (IPW, WTO/TRIPS, 19 August 2015).

Most countries have supported a permanent moratorium but the United States and Switzerland have opposed it. Today, according to sources, countries restated their positions and the agenda item was suspended. Some informal discussions are expected to be organised before the Nairobi WTO Ministerial Conference in December, according to sources.

According to its statement, cosponsor Brazil highlighted the “significance of the decisions by the African Group and the LDC [least developed countries] to join the list of co-sponsors.”

“The addition of the 43 countries of the African Group and the 34 of the LDC group makes it even more evident that the same position on non-violation and situation complaints is shared by the vast majority of the membership,” it said.

According to a developing country source, this shows growing support for the permanent extension of the moratorium.

The agenda item was suspended as no consensus was found. The chair of the Council may hold informal discussions with member states in the coming weeks, according to sources. The TRIPS Council would need to reconvene to adopt a resolution to be submitted to the ministerial in December.