The Domino Effect of US FTAs: Public Health Groups, Members of Congress claim CAFTA will choke Access to Medicines

Recent efforts to rally Congress to approve a Free Trade Agreement (FTA) reached earlier this year with Central American countries has reignited debate about USTR’s approach to intellectual property and the implications for access to essential medicines.

The Agreement with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua was reached in May 2004 and supplemented in August by the addition of the Dominican Republic. With election results uncertain, USTR worked throughout October to lobby Congress to approve CAFTA as swiftly as possible.

While trade advocates are pushing for the pact to go for a vote in Congress before the end of the year, some Members of Congress are making the case for caution. On September 30, twelve Members of Congress wrote to President Bush to “express [their] strong opposition to the inclusion of provisions in pending free trade agreements,” such as the CAFTA, “that would restrict access to generic drugs.”

While USTR boasts that its recently concluded bilateral agreements provide for “higher levels of IP protection in a number of areas covered by the TRIPS Agreement,” the September 30 letter expressed strong concern that provisions in these agreements violate in the terms of the 2002 Trade Promotion Authority Act which instruct USTR to uphold the 2001 WTO Declaration on the TRIPS Agreement and Public Health.

The main text of the CAFTA fails to make any reference to the rights of WTO Members to protect public health. Noting the addition of an “Understanding Regarding Certain Public Health Measures” to accompany CAFTA, public health groups criticise USTR for refusing to explicitly include either exceptions to protect health or references to the Doha Declaration in the text of agreements. According to the Centre for Policy Analysis on Trade and Health, the side letter approach falls short of promoting access to medicines for all as set forth in the Doha Declaration and given its legally ambiguous status fails adequately “to offset” CAFTA’s intellectual property provisions.

For the U.S. pharmaceutical industry, however, all of this is good news. Earlier this year, for example, the Pharmaceutical Research and Manufacturers of America (PhRMA) recommended that Central American countries “remain on the 2004 ‘Special 301’ list due to persistent problems with intellectual property enforcement” and set out a series of grievances against each of the countries. In expressing its satisfaction with the CAFTA, PhRMA has surprised many public health advocates by arguing that the agreement will “improve patient’s access to medicines.”

Public health advocates disagree. Arguing that CAFTA will “cost lives”, Rob Weissman of Essential Action describes it as a deal that “uniformly favors the interests of multinational drug companies over those of patients.” Médecins Sans Frontières argues that CAFTA-style provisions “could put an end to competition from generic medicine producers and to the ability of countries to prevent the abuse of patents.”

CAFTA appears to represent the apex of TRIPS-plus provisions in recent U.S. FTAs. In a recent comparison of five such agreements, Oxfam International notes that while the terms vary, recent U.S. FTAs effectively increase patent protection beyond the twenty years required by TRIPS, place TRIPS-plus conditions on the granting of compulsory licenses, provide for the extension of patents to ‘compensate’ for delays in the marketing approval process, mandate or increase requirements for test data protection of several years, and establish a link between IP protection and regulatory approval processes (such that a generic company may have to wait until a patent has fully expired before it can apply for regulatory approval).

Several civil society groups have noted the irony of USTR’s push for ‘TRIPS-plus’ standards at the same time as Congress is debating options for improving the affordability of medicines within U.S. borders. While several U.S. states are approving legislation to enable U.S. citizens to buy medicines more cheaply from Canada, USTR is pushing for agreements that prevent citizens in developing countries from doing the same.

U.S. Bilateral and Regional Free Trade Agreements Since TRIPS was adopted in 1994, the United States has forged ahead with bilateral agreements with, among others, Jordan (2000), Chile (2003), Singapore (2003), Morocco (2004) and Australia (2004). Negotiations are under way with the countries of the Free Trade Area of the Americas (FTAA), Thailand, Panama, Bahrain, members of the South African Customs Union (SACU) and the Andean region.