Democrats Could Slow US Trade Deals But May Change Little On IP

By Martin Vaughan for Intellectual Property Watch
WASHINGTON, DC – The new Democratic Party majorities in the United States Senate and House of Representatives pose new obstacles for Bush administration trade initiatives. But they are not likely in the short-term to result in wholesale changes to intellectual property rights provisions that are part of those agreements, US policymakers and observers say.

Senior House Democrats that will be in charge of key committees next year – including the Ways and Means Committee’s Rep. Charles Rangel of New York, and the Government Reform Committee’s Rep. Henry Waxman of California, have criticized language in trade agreements that protects pharmaceutical test data for name-brand drugs for five years. That time period is not specified in the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and critics say it delays access to cheaper, generic drugs.

But in bilateral trade deals with Peru and Colombia that could come before Congress next year, Democrats have made labour the issue on which to demand changes, so far to the exclusion of other issues. While Rangel and other Democrats this week pressed for a requirement to abide by international core labour standards to be added to those agreements, it seems less likely they will insist on changes on the data protection issue.

“At a minimum, we would want to have a discussion about their position” on data protection and medicines, one Democratic aide said. But the aide also noted that leading House Democrats have supported previous bilateral trade deals that included the five-year data protection requirement, where the trading partner in question agreed to Democratic demands on labour.

Presidential negotiating authority for trade agreements expires on 1 July, 2007, and its renewal is in doubt as Democrats are expected to press for substantive changes on labour and environment and procedural changes to boost the role of Congress in shaping negotiations.

Democrats are expected to continue their calls for aggressive enforcement against abuse of US copyrights and patents abroad. Rangel has pressed for the United States to bring more WTO complaints to combat piracy, and last month said he would introduce legislation to require monthly reports from the US Trade Representative on enforcement activities.

“There are a lot of Republicans and a lot of Democrats that are supportive of our [IP] agenda. I’m not anticipating that it would be much different,” said one US trade official.

A pharmaceutical industry source said that with respect to IP issues, the larger impact of the Democratic take-over will be on the US domestic front, rather than on international agreements. Legislation to overhaul the US patent system backed by software and high-tech interests could continue to gain momentum, and Waxman may seek to advance his legislation to create an approval process for generic versions of biological treatments.

Some See Fresh Prospect For Change

Still, some health activists believe the Democrats’ victory gives them a foothold in their quest to roll back expansions of TRIPS obligations that have been included in recent US trade agreements. “The new US political context might be the perfect time to challenge IPR chapters in [bilateral trade deals], not only by opposing but by offering alternatives,” said Gaelle Krikorian of CRESP at a 16 November activists’ strategy session on issues of trade and health.

At the same event, Brook Baker of Health GAP said groups should continue to focus on trying to move language stressing the pre-eminence of the 2001 Doha Declaration on TRIPS and health from side letters and footnotes to the text of agreements. The Peru and Colombia agreements include side letters intended to clarify that the data protection provisions do not limit the flexibilities in the Doha Declaration on TRIPS and health with respect to compulsory licensing of drugs needed to combat public health concerns.

That battle could play out in the US-Korea free trade talks, which negotiators hope to conclude before next April – the date at which all agreements must be concluded to be considered under the current US fast-track trade authority.

In addition to patent protection and data exclusivity issues, US negotiators are pressing for changes to Korea’s national prescription drug reimbursement system to ensure that US drug-makers can offer brand-name drugs for sale in Korea at a competitive price.

On the copyright side, the US is pressing Korea to lengthen copyright terms beyond the 50 years now protected by Korean law and is seeking greater rights for copyright owners to challenge infringements in civil court.

Steve Metalitz, counsel to the International Intellectual Property Alliance, said while Korea has made great progress in enforcement against piracy in recent years, the widespread access to digital technology in Korea calls for stronger protections to be put in place. “With the high level of broadband penetration, they really should have a world-class copyright law and they don’t,” he said.

Congressional Democrats and Republicans widely support a US-Korea trade agreement in theory, but majority support for any deal that is reached will hinge on the final terms of market access for key US sectors like agriculture and autos.

Also on the trade agenda for the next Congress will be legislation to grant permanent normal trade status to Russia, after the United States and Russia concluded a bilateral WTO accession deal this week. Members of both parties will closely monitor in the coming months what steps Russia is taking to implement its IP commitments that were part of that deal.

Martin Vaughan may be reached at info@ip-watch.ch.