TRIPS COUNCIL REMAINS DIVIDED ON PUBLIC HEALTH AMENDMENT

WTO Members remain divided on how to formally amend the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) in order to facilitate the export of drugs produced under compulsory licence. No substantive discussions took place on the issue during the 25-26 October meeting of the TRIPS council. Members, whose positions are largely unchanged since the last meeting in June, focused on process-related issues (see BRIDGES Weekly, 22 June 2005). Chair Ambassador Choi Hyuck of Korea suspended the TRIPS Council's session on 26 October. It is set to reconvene on 28 October, when Members will discuss the relationship between the TRIPS Agreement, the Convention on Biological Diversity and traditional knowledge.

The '30 August 2003 Decision' by the General Council spelled out the circumstances under which countries lacking pharmaceutical manufacturing capabilities can import generic versions of drugs still under patent. The Decision temporarily waives Members' obligations under TRIPS Articles 31(f) and (h) by allowing them to export pharmaceuticals produced under compulsory licence, albeit subject to a large number of conditions in both the exporting and importing country. This waiver, it stipulates, will remain valid until the TRIPS Agreement is permanently amended. The Decision's adoption was accompanied by a statement from the Chair of the General Council ('Chair's statement') assuring that it would not be misused, for example to divert low-cost medicines into developed country markets.

Members have missed several deadlines for agreeing upon a permanent amendment, most recently in March 2005. Countries differ on the content of the potential amendment as well as whether it should be a footnote, annex, or a change to the body of the text of the agreement. Developing and developed countries also broadly disagree on the legal status of the Chair's statement. Since December 2004, discussions have centred around the African Group's proposed permanent amendment (IP/C/W/437), which would insert a modified version of the 30 August Decision waiver into the body of the TRIPS Agreement and leave out the Chair's statement.

WTO Director-General Pascal Lamy has been urging Members to resolve the matter in time for the Hong Kong Ministerial Conference in December.

Countries still far apart on amendment

Sources report that in recent weeks Hyuck has chaired informal meetings among the EU, the US, and the African Group to discuss how to convert the waiver into a permanent amendment. At the 25 October session of the TRIPS Council, countries including Switzerland and Malaysia, expressed support for this trilateral process, and indicated that they were willing to contribute if and when the Chair deemed it necessary. Brazil, India and Argentina, however, objected to the central role of those consultations in discussions on the TRIPS amendment, arguing that they were neither representative nor transparent. Their delegates argued that all countries with an interest in the matter -- including their own -- should be able to participate in a consultative process that involves the Chair.

Discussions on the content of the waiver echoed past meetings to a great extent (see BRIDGES Weekly, 16 March 2005). Delegates report that several developing countries, including Argentina, Brazil, India, and the Philippines expressed support for the African Group proposal -- the only formal proposal for the TRIPS Agreement amendment currently on the negotiating table -- as a basis for discussion.

Waiver remains unused

During the TRIPS Council session, the EU and Korea indicated that their legislation to implement the waiver should be ready before Hong Kong. China has also started to develop laws that would allow it to export drugs produced under compulsory licence. Canada, Norway, and India already have legislation in place to produce and export eligible drugs. However, in the two years since its adoption not a single country has used the waiver to import low-cost drugs. Civil society health activists have expressed serious doubts about the 30 August Decision's practical value, arguing that cumbersome procedures and political pressure mean that it may never be used.

Amendment: role of Chair's statement still questioned

A July draft version of an EU 'non-paper' on the TRIPS amendment that has not been formally tabled in the WTO argues that there is a "legal relationship" between the Chair's statement and the 30 August Decision. It calls for the General Council Chair to reiterate the Chair's statement when Members are in the process of adopting an amendment. The document also contends that the Chair's statement "constitutes a shared agreement accepted by all Members and context for the interpretation" of the 30 August Decision, and says that this 'shared agreement' should be confirmed at the time of the amendment's adoption.

This approach is said to have raised the ire of some developing countries, which argue that it would inappropriately give the Chair's statement legal standing. They fear that accepting such a proposal would risk establishing the Chair's statement as part of this basis from which the TRIPS Agreement would subsequently be interpreted.

Some trade observers have suggested that the EU might be pushing hard for an agreement on the TRIPS amendment in an attempt to draw attention away from criticism it has been receiving for impeding progress in the agriculture negotiations. During the formal meeting on 25 October, Brazil and Malaysia reminded Members that the TRIPS amendment was not part of the Doha Round single undertaking, and thus did not need to be approved in Hong Kong. They urged Members to focus on the content and quality of the amendment rather than the speed with which it is agreed upon.

ICTSD reporting; "Concern over bird flu drugs dominates WTO," FINANCIAL TIMES, 24 October 2005.