TRIPS And Public Health Agreement Appears To Be In Sight

After years of consultations over a draft provision aimed at making it legal for smaller economies to import cheaper generics under international trade laws, a solution may be reached in the rush before the 13-18 December World Trade Organization ministerial in Hong Kong.

Over the weekend delegations met in informal sessions (meaning that the issue was negotiated but no decision was reached) and discussed a draft text that would convert a 30 August 2003 temporary waiver into a permanent amendment to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), without changing the original legal meaning, a Geneva source said.

Consultations are scheduled to continue today, 5 December, after which chairman Choi Hyuck hopes to reconvene the TRIPS Council on 6 December.

Choi has indicated that he wants to reach an agreement before the Hong Kong ministerial. “If that happens, the council’s meeting would be followed by a reconvened session of the General Council to adopt the decision,” the Geneva source said.

A developing-country official said the proposal was something new worked out between the African group and the United States and was close to a clean transposition of the waiver into the amendment. But “the bulk of the work” probably had been “done by Washington,” the delegate said, noting that senior officials from the Office of the United States Trade Representative had been present at the meetings.

The delegate said the draft waiver was a good package that could be accepted by all, adding that a number of countries supported it in order to “not muddy the waters” at this point, and an agreement could be reached soon.

A least-developed country official said that with the draft they had “practically ended up with the African proposal.” Earlier this year, the African Group put forward a proposal to make the waiver permanent that suggested technical changes and omitted reference of the WTO General Council chairman’s statement read out at the 2003 temporary waiver adoption. More recently, the African Group has agreed to allow the chairman’s statement to be read out again without further discussion, but not to be written into TRIPS.

NGOs Call for Stronger Outcome for Least-Developed Countries

But NGOs have questioned why the African countries have been so keen on getting an agreement before Hong Kong when no African country has used the waiver despite million of people dying of HIV/AIDS in Africa.

On 5 December, 31 non-governmental organisations issued a statement to negotiators calling on them to reject the “flawed” 2003 agreement in making the waiver permanent. According to the NGOs, the African Group proposal removed cumbersome procedural requirements and had wide support, but that the United States and European Union are pressuring them to back off the proposal.

The developing-country official said that the problem of practicality of using the waiver was not discussed over the weekend.

The Draft Waiver

The draft waiver text consists of an TRIPS Article 31 “bis,” an annex and an appendix to the annex.

The “bis” part consists of five paragraphs modifying Article 31(f), which states that production under compulsory license should “predominantly” be for the domestic market.

The 30 August 2003 decision waived this provision and made it possible to export under compulsory license to countries with inadequate production capacity. These five paragraphs would also cover remuneration, eligibility of regional trade agreements among developing countries, “non-violation” complaints, and retaining all existing flexibilities under the TRIPS agreement, according to a copy of the 29 November draft.

The annex covers issues such as definitions; terms for notification of use; avoiding diversion of products into unintended markets; developing regional systems — including the granting of patents — to allow economies of scale; and an annual review in the TRIPS Council.

The appendix to the annex covers the assessment of member countries’ capacity to produce pharmaceuticals, a least-developed country delegate said.

The appendix is the original annex to the 2003 decision, a Geneva source said. The discussions focused on shifting existing text to agreed-upon positions so that the paragraphs relate to each other, the Geneva source said.

Chairman’s Statement to be Re-Read?

In the 2003 General Council chairman’s oral statement, 11 advanced developing countries committed to use the waiver only under emergency circumstances. Delegates have debated since then what should happen to this statement once the waiver became permanent.

Choi has proposed a so-called identical “choreography,” meaning that the 2003 statement would be again read out aloud. But members would have to agree on how to handle the reading, according to sources.

But a key insider to the negotiations said on 5 December that the proposal regarding the chairman’s statement was “only one of the options” and part of the package, but nothing was decided yet.

Where the Countries Stand

African countries, such as South Africa, Egypt and Kenya, are supporting the proposal and urge members to adopt it before Hong Hong, the Geneva source said. A number of the 11 “partial opt-out” countries, such as Singapore and Israel, as well as Norway and Canada, also support the draft and the “choreography,” the source said.

Other countries, such as Brazil, Cuba, India, Indonesia and Thailand, welcome the text and “choreography” as a basis for further discussion, but are consulting with their capitals and are seeking further legal clarifications, according to the Geneva source. In particular, they are examining the proposal to include the non-violation issue, which would allow members to dispute other members actions even if all WTO rules were followed (IPW, WTO/TRIPS, 28 November 2005). But a developing-country delegate said that non-violation complaints probably would be referred to in a general way, as the issue will be discussed for a long time to come in the TRIPS Council.

The United States and Switzerland are seeking a “clean translation” of the original statement, the Geneva source said.

Second Draft Ministerial Text

Separately, WTO Director General Pascal Lamy issued a second draft of the Hong Kong ministerial text on 1 December. There were no obvious changes to the TRIPS issues (apart from re-arranging the paragraphs) but the paragraph on TRIPS and public health may now be changed before Hong Kong.