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Talks continue on key issues to implement Doha health declaration

Geneva, 22 Nov (Chakravarthi Raghavan) - After intense talks and negotiations among a group of key countries at informal consultations convened by the Chairman of the TRIPS Council, Amb. Edouardo Perez Motta of Mexico over a chairman’s draft legal text for a decision on implementing Para 6 of the Doha Ministerial Declaration on TRIPS and Public Health, a meeting at level of ambassadors of the same group is being held to resolve some outstanding differences.

This meeting is expected to be followed by a wider meeting of the TRIPS Council members at the level of ambassadors - expected to be more of a transparency exercise.

A meeting of the TRIPS Council has been set, as of Friday, for the afternoon of 25 November.

The small group of key countries and those interested and made known their interest to the chair, have been invited to participate in these talks by Motta to resolve at a political level three or four outstanding questions.

These appear to relate to the definition of pharmaceutical product and the public health problems referred to in paragraph 1 of the Doha declaration, the eligible importing and exporting countries, and the issues of transfer of technology.

The chair, based on its earlier elements paper and the discussions on it, drew up a draft legal text, and circulated it among the members, and had convened an informal meeting Thursday of the TRIPS Council for its consideration. However, with the US, Japan and Switzerland raising some strong objections, the meeting was quickly recessed, with members on call, while Motta continued consultations with the smaller group to achieve a consensus, trade diplomats said.

Trade diplomats said that in the consultations and discussions so far the US, Japan and Switzerland have been taking a tough line to advance and protect the interests of their pharmaceutical industry, with Japan taking the hardest and ‘meanest line’ to restrict as much as possible the scope and outcome of the Doha declaration.

Japan, they said, has been wanting the exclusion of vaccines, and the diseases confined to the three mentioned in the Doha declaration.

The stances of the United States and Switzerland in support of their pharmaceutical industry, nevertheless is also influenced to some extent by the nature of their more transparent very strong and active civil society movements and the media that have been championing on grounds of solidarity and public interests, the problems of developing countries and their access to essential medicines at affordable prices.

There is very little of this at play in Japan, which adopts a strong neo-mercantilist policy abroad to promote the interests of its corporations, and in pursuing what the South Korean economist, Prof. Ha-Joon Chang has characterised as the policy of ‘Kicking Away the Ladder’. In his book of the same name, Ha-Joon has set out several examples, of countries climb up the to industrialization latter by policies of protection and copying processes and patents, but then advocate policies to prevent others from following this route.

In fact not too long ago, the Japanese representative told UNCTAD not to ask the developing world to follow the policies that Japan and others in fact followed and follow, but promote the policies they preach.

In the smaller consultations, trade diplomats said, the United States and Japan went back to their initial positions in March, when the TRIPS Council had taken up the issue of implementing para 6 of the Doha declaration. They were roundly criticised by the developing countries including Brazil, India and the Africans for repeating their earlier stands as if nothing had happened since then.

In the Doha declaration, para 1, the Ministers said: “We recognize the gravity of the public health problems afflicting many developing and least developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.”

The chair’s text in a definitional language of a pharmaceutical product had said: ‘pharmaceutical product’ means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address the public health problems referred to in paragraph 1 of the Declaration, it being understood that active ingredients used in its manufacture and diagnostic kits needed for its use would be included.

Japan in its comments, reportedly insisted that the Doha declaration about pharmaceutical product did not cover vaccines and these should not be included.

The EC however agreed that ‘vaccines’ were very much covered by the term ‘pharmaceutical product’. Sri Lanka argued strongly that vaccines were part of the pharmaceutical sector, to which the Declaration applied. India argued that everyone understood ‘pharmaceutical sector’ to include vaccines, but since Japan was taking such a position that it was not, the decision to be adopted should have an ‘explicit understanding’ that vaccines are included.

On the issue of ‘eligible importing countries’ - where the Motta language says, this means any LDC, and any other Member notifying the WTO of its intention to use the system as an importer, using the system in whole or in a limited way.  The notification itself would serve as acceptance by the Member of the conditions being imposed by the decision on such use.

The US wants OECD members, and ‘high income’ developing countries should be excluded. There were others who did not accept such a view, noting that the Doha declaration made no such limitation. A possible compromise suggested was to include such a view in the preamble, and for countries voluntarily not invoking such a possibility of imports.

As for the ‘exporting Member’, the chair’s draft defines it as “a Member producing pharmaceutical products for, and exporting them to, an eligible importing member’ under the Decision.

The United States appears to have argued in favour of restricting the eligible ‘exporting’ Member to developing countries, or at least use of some language that ‘developing countries should be encouraged to do this’ or for the importing member to first attempt to source it to a firm in a developing country.

On the issue of ‘notifications’, by a licensee in an exporting country producing a product under a compulsory licence issued by an importing country, of information to be provided on a website, a dedicated page of the WTO, the issues relate to whether it is for information purpose only, or it involves something more (that would or could bring in dispute processes).

Also, on the safeguards to guard against diversions, where the idea is for a distinct labelling, colour, shape etc, any cumulative conditions would discourage any ‘supplier’, and was not acceptable to possible supplying countries, who viewed many of these conditions as an attempt to ensure that no supplier or exporting country would want to go through all these difficulties.  And the idea that all these information should be posted on a website by the enterprise working the compulsory licence was also given up - since it would then make the WTO website a free advertising and promotional medium.

Also, any obligation to observe the terms of the licence could only be on the licensee, and not any country where the licensee is located.

Perhaps somewhat naively, one of the African countries appears to have suggested that the safeguards and responsibility for preventing diversion, should be undertaken by both the importing and exporting country - a proposition, as one of the participants said, that would make the exporting country and the WTO a kind of Interpol in this area.

There were also efforts by the US and others against a definition of a ‘domestic market’ to be supplied under a compulsory licence, to exclude a regional market or arrangement.

The African group of countries are opposed to any such limitation; individually each of them may have a very limited market, making very costly the supply of the pharmaceutical product by a licensee in another country, and thus defeating the very purpose of making essential medicines available at affordable prices.

On the issue of transfer of technology, a formulation that would have extended the obligation, under Art.66.2 of TRIPS, of industrialized countries to providing incentives to their enterprises to encourage such transfers to the LDCs, also to other developing countries was rejected by the US and others.

Other developing countries rejected any formulations in effect negating any idea of a member country invoking the objective of the TRIPS Agreement, Article 7.

There are also questions relating to waivers and conditions that could be attached, and whether these could be brought under the purview of the DSU the Marrakesh treaty relating to waivers does not provide for this. The General Council in the first instance, and the Ministerial Conference when it meets have to grant a waiver, with or without conditions, and review them. There is no scope for the panel and DSU to come into the picture.

The issue has much wider implications than in relation to the Doha Declaration on public health.

There was an attempt by some of the industrial countries to use the opportunity of changes to Art.31.f for issue of compulsory licences, to take away the existing flexibilities.

As it now stands, a member can issue a compulsory licence for production and supply ‘predominantly for its domestic market’, which implies scope for some exports.

The proposed decision would affirm this existing flexibility, which some of the hardliners (like Japan and the US) want to change. However, Switzerland agreed with India that Art.31.f which uses the wording ‘predominantly’ for the local market, implies some flexibility. – SUNS5241

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