TWN Info Service on WTO Issues  (Feb03/3)

February 10, 2003, Geneva

Dear friends

Re:       General Council suspends decision/discussion on TRIPS Paragraph 6 negotiations, as consultations proceed on Chairman’s statement of “understandings”

The General Council met today (February 10) and heard, among others, the report from the Chair of the TRIPS Council that WTO Members have yet to reach agreement on the solution to the Paragraph 6 problem. The TRIPS Council Chair requested for more time to conduct consultations. There was little discussion on the issue, and the General Council then decided to “suspend” taking a decision on the issue.

Consultations will intensify in the next week and the TRIPS Council will meet on 18 February to formally discuss the issue.

It is understood that TRIPS Council Chair, Ambassador Perez Motta of Mexico, has forwarded a proposal to Members (dated February 5) on a “statement of understandings” that would clarify the December 16 Motta text. The main element of the February 5 proposal seems to be that the system proposed in the December 16 Motta text would be restricted to only “national emergencies or circumstances of extreme urgency.”

This proposal implies that the December 16 text would be subject to the “understandings”, which will be put on record. It also implies that this is an alternative to the proposals from the US, EC and Japan, which proposed different variations on limitations on the scope of diseases to be covered under the Paragraph 6 solution.

There has been a mixed reaction to this latest proposal.

Please see a report on this latest situation below.  We hope it is of use to you.

With best wishes,

Cecilia Oh
Third World Network



Report by Cecilia Oh, Third World Network

Geneva, 10 February 2003

1.   General Council postpones decision on Paragraph 6 issue

The WTO General Council meeting today (10 February), agreed to “suspend” adopting a decision on the resolution of the issue of Paragraph 6 of the Doha Declaration on TRIPS and Public Health. At a press conference later in the evening, Chair of the General Council, Ambassador Sergio Marchi of Canada, said the discussion on the TRIPS and public health issue had been “suspended” in the General Council, on the advice of the Chair of the TRIPS Council, as “the issue is still alive”.

Ambassador Marchi said the issue would be discussed next at the meeting of the TRIPS Council, beginning February 18. However, it is also generally expected that this issue will figure prominently on the agenda of the so-called “Mini-Ministerial” meeting of 24 trade Ministers in Tokyo, February 14-15.

The Doha Declaration had mandated that the TRIPS Council find an “expeditious solution” for Paragraph 6, and to report the said solution to the General Council by December 31, 2002 but that deadline had been missed. At today’s General Council meeting, the Chair of the TRIPS Council (Ambassador Perez Motta of Mexico) requested the General Council for “additional period for further deliberations in capitals and consultations in Geneva”, as no agreement had been reached on the solution for Paragraph 6. He added that he had been exploring “certain ideas” with the Members and had had positive reactions to those ideas, although it was “too early to be able to report on whether these will lead to a final solution”.

2.   The “understanding” by Chair of TRIPS Council

The TRIPS Chair did not elaborate on the “ideas” he had been exploring. Nor did he say from which Members he had received “positive reactions” to those ideas.

Insofar as the reactions to the proposals to limit the scope of disease (put forward by the US, EC and Japan), developing countries had been unequivocal in that they would not accept any compromise that restricts the scope of diseases in the solution to the Paragraph 6 problem. The developing countries had said it would be a waste of time to discuss such proposals. (See TWN Info Service, February 6, 2003 - Update on 5 Feb 2003 informal meeting of TRIPS Council and Background to the Negotiations on Para 6).

However, it is known that the latest idea being explored by the TRIPS Chairman is a proposal that the Chairman table a statement of “a number of understandings”, to which the adoption of the December 16 Motta text on paragraph 6 would be subject. This statement was forwarded to WTO Members on February 5.

The statement (reproduced below) comprises three “understandings”, which have merged from the discussion leading up to the formulation of the December 16 Motta text. First, the WTO Members would reconfirm their commitment to the provision of the Doha Declaration and “to the need to respect fully its provisions”.

Secondly, it states that “delegations have made it clear that they see the system that we are establishing under paragraph 6 of that Declaration as being essentially designed to address national emergencies or other circumstances of extreme urgency”.

Finally, it states that the delegations “recognise the need to avoid undermining the importance of intellectual property protection for the development of new medicines”, as well as re-stating the language of the Doha Declaration that “the TRIPS Agreement does not and should prevent Members from taking measures to protect public health”.

3.         “Positive reactions?”   Apparently not ...

Members had been meeting over the past week to discuss the statement. It is understood that many developing countries had concerns about the implication of such an understanding.

The Africa Group of countries had met last Friday to discuss their reaction to this proposal. It appears that the majority of the Group is not comfortable with the statement, particularly with the understanding that the Motta text solution for Paragraph 6 is “essentially designed to address national emergencies and other circumstances of extreme urgency”. It is learnt that Members in the Group have drafted an amendment to the understanding, to the effect that references to national emergencies and extreme urgency circumstances have been replaced with language as found in the Doha Declaration. That is, the amendment would have Members understand that the Motta text solution for Paragraph 6 is “essentially designed to address public health problems affecting developing countries with insufficient or no manufacturing capacity in the pharmaceutical sector, as called for in the Doha Declaration”.

However, it is reported that the Group is yet to agree on this as a common position due to differences of views, particularly that of South Africa. It is reported that South Africa is in favour of the Chair’s understandings without change. There are concerns that South Africa’s position may hinder the possibility of the Africa Group presenting a common position on this matter.

Other developing countries have also expressed concerns that the national emergencies language will unnecessarily restrict the operation of the Motta text solution on Paragraph 6, and thereby curtailing the rights of WTO Members to issue compulsory licences on public health grounds. A number of developing countries said that they would agree with the amendment by the Africa Group.

It is also understood that at least one Member may express their objection to the understanding as a whole.

It is reported that the US did not offer its views on the understanding, when the TRIPS Chair met with them. Apparently, no decision from the US will be forthcoming until later this week. As one commentator observed, “Washington is still awaiting instructions from the industry”.

It is also not clear what the EC has to say about the understanding. According to sources, the news of this development has yet to reach many at the capitals, although those who have heard about it are apparently not too keen on the proposal.

4.   TRIPS Council Chair’s assessment      

At a press conference in the evening, Ambassador Perez Motta gave an optimistic assessment of the prospects of his understanding being accepted. He gave the impression that almost all WTO members would agree to the proposed Chairman’s statement of understanding (and that the WTO Members were merely waiting for Washington’s “yes” to his proposed statement of understanding).

Tracing the developments that led to that statement, he said that after the TRIPS Council informal discussions last week on the EU and Japan proposals, he had had a meeting with “African colleagues”. They had apparently discussed and agreed on a number of elements that would go towards the development of a new proposal. One of the elements, “as raised by many African delegations” was that they would use the December 16 system “basically for an emergency situation”. He then decided to put forward a chairman’s text with three elements; reaffirming the Doha Declaration’s integrity, an understanding that the December 16 text would be used specifically situations of emergency and extreme urgency, and that it is important to balance IPRs and the flexibility of developing countries to deal with public health crises.

Ambassador Perez Motta said he received “general support” by many WTO members for this text, although many wanted some changes.

He added the US delegation is now consulting with its capital before giving a final response to that proposal. That was the reason for his request to the General Council for additional time to see what could be done before, or at the latest, by the TRIPS Council meeting of February 18.  He said the proposal had to be decided on soon, whether it “flies” or otherwise, and, like the EU and Japan proposals, it did not have a long life. Ambassador Perez Motta added that he had the impression that everyone would accept the text if the US does.

(Ambassador Perez Motta will chair his last meeting of the TRIPS Council starting 18 February, after which, Singapore’s Ambassador Menon will take as Chair. Hence, the view that should the proposed chairman’s understanding not be accepted by 18 February, it would not succeed).

Ambassador Perez Motta also added that the “emergency” element in his draft was one that could make a difference in building confidence of the US drug industry, in order to get acceptance of the December 16 text.

“Everyone wants a different draft, that is why this draft is a take it or leave it text” and it would not be changed, he added.

5.   Chair’s mistaken impression?

Several negotiators, when told about the Ambassador Perez Motta’s assessment, said they had misgivings about the proposal, especially with the implication that the December 16 text system would only be used in national emergencies and circumstances of extreme urgency.

The majority of the African countries are unhappy with this text, and have drafted their own alternative formulation (see Part 3 of this report above). Developing country negotiators, when asked for their response to Ambassador Perez Motta’s statement at the press conference, disputed the notion that all countries except the US had agreed to the proposed solution.

“If you ask us to declare an emergency or a situation of extreme urgency every time we want to take a measure like compulsory licence, how many dozens of emergency declarations must we make for the many, many diseases we have to deal with?”, asked a senior diplomat. 


(Statement proposed by Chair of TRIPS Council, February 5, 2003)

Before proposing the adoption of the text of 16 December 2002,1 would like to put on record a number of understandings which have emerged from the discussions leading up to the formulation of this text.

The first is that all delegations have reconfirmed their commitment to the provisions of the Doha Declaration on the TRIPS Agreement and Public Health and to the need to respect fully its provisions.

Secondly, delegations have made it clear that they see the system that we are establishing under paragraph 6 of that Declaration as being essentially designed to address national emergencies or other circumstances of extreme urgency.

Third, delegations have recognized the need to avoid undermining the importance of intellectual property protection for the development of new medicines and have also reaffirmed that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health.

Having put on record these understandings, I would propose the adoption of the draft decision contained in  ...1