E-DRUG: Gore Hopes New AIDS Pact Will Help Shake Off Protesters
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http://interactive.wsj.com/articles/SB934410710762381317.htm
August 12, 1999
Gore Hopes New AIDS Pact
Will Help Shake Protesters
By BOB DAVIS
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- The last thing that Al Gore's presidential campaign
needs is a band of AIDS demonstrators dogging him from event to
event and attracting television coverage.
But from the moment he announced his candidacy in Carthage,
Tenn., in June to an appearance last weekend in New Hampshire,
protesters have turned out to accuse him of heartlessness toward
AIDS sufferers in South Africa. Their mantra: "Gore's greed
kills."
Now Mr. Gore is trying to put the problem behind him by striking
a deal with South Africa. At issue is a two-year-old U.S.
campaign to persuade South Africa to scrap a new law that could
cut the cost of AIDS drugs imports, but which U.S. pharmaceutical
companies believe would undermine their patent rights.
At the vice president's urging, U.S. negotiators are easing their
demands and no longer seek the law's repeal. Instead, they are
asking South Africa merely to sign a statement promising that the
new law, which has yet to take effect, won't violate intellectual
property rights-promises that the South Africans have already
made orally. Negotiators are pressing to complete an agreement in
time for a meeting between Mr. Gore and South African President
Thabo Mbeki around Sept. 20.
But it is far from clear that the proposed solution will satisfy
either the protesters or the pharmaceutical companies. The South
Africans "would need to modify the law," says Shannon Herzfeld,
senior vice president for international affairs at the
Pharmaceutical Research and Manufacturers of America. A statement
"is not an acceptable outcome."
Perennial Challenge
The AIDS protest highlights a perennial campaign challenge: how
to make sure issues that spring from obscurity don't come to
dominate a campaign and throw it off course. Mr. Gore's ability
to make the AIDS and South Africa issue disappear is an early
test of his political adroitness. "The goal of a campaign is not
to get distracted by distractions," says Tad Devine, a Democratic
political consultant.
Mr. Gore had every reason to expect that South Africa would be a
boon for him politically. For the past five years, he has been
co-chairman of a U.S.-South African binational commission with
Mr. Mbeki. The panel has resolved longstanding trade disputes,
expanded South Africa's rural electrification and advised
Pretoria how to privatize telecommunications. "Gore is the point
person with South Africa," says Commerce Secretary William Daley.
But Mr. Gore's visibility has made him a target, too, for
protesters who are opposed to U.S. trade policy concerning
pharmaceuticals.
In late 1997, South Africa passed a law to cut the price of drugs
to treat AIDS, which is ravaging the country. But it permitted
two controversial practices. One, called parallel importing, is a
form of "gray market" retailing. Importers would buy drugs from
the cheapest sources available, whether or not manufacturers give
their approval. The other, called compulsory licensing, would let
the South African government license local companies to produce
cheaper versions of drugs whose patents are held by multinational
firms.
Hits at High Costs
"Not only are [AIDS] medicines too expensive to even contemplate
in South Africa," says Ian Roberts, an adviser to South Africa's
Health Ministry, "but even some medicines that treat
complications are becoming unaffordable."
Not surprisingly, pharmaceutical companies find the practices
abhorrent because they can slash profits, undermine relations
between manufacturers and distributors and weaken patent rights.
Forty drug companies sued in South Africa's courts to overturn
the law, and the government has held up implementation until the
case is resolved. U.S. firms enlisted the U.S. trade
representative's office to press South Africa to reverse course.
But the trade representative has a problem: Neither parallel
importing nor compulsory licensing is barred by international
trade agreements. Even so, under U.S. law covering unfair trade
practices, the trade representative is required to muscle
countries anyway to comply with U.S. wishes.
In April, the U.S. trade representative listed South Africa on a
"watch list" of countries whose protection of intellectual
property is suspect, a move that can discourage foreign
investment. Meantime, Commerce Department, State Department and
trade officials have pressed South Africa to change its law.
"The U.S. is trying to get more than it got in [international]
agreements," says Gary Hufbauer a trade expert at the Institute
for International Economics in Washington. "It's a little bit of
bluff."
A Special Case
Usually, such tactics attract little notice at home. But South
Africa is a special case because its AIDS problem is so severe
and because its future is so important to black voters in the
U.S. whose support Mr. Gore needs. James Love, a pharmaceutical
company opponent who heads the Consumer Project on Technology, a
Ralph Nader-backed group here, relayed details of the controversy
to ACT UP, the activist AIDS organization that specializes in
confrontational tactics.
Mr. Gore was targeted, says ACT UP co-founder Eric Sawyer
"because he has direct ability to impact negotiations with the
South Africans."
Indeed, even before the protesters started hounding him, Mr. Gore
had tried to ease the confrontation. During a meeting of the
binational commission in August 1998, Mr. Gore and Mr. Mbeki
agreed on a framework to resolve the issue that involved reducing
drug prices and respecting international agreements, artfully
avoiding the question of the validity of South Africa's law.
When trade experts still couldn't reach a deal, the two men
agreed during a meeting last February to assign the issue to a
new trade council set up by the commission, to assure that top
officials would focus on the dispute. "The vice president began
pursuing this a year ago when no one was watching," says Tom
Rosshirt, Mr. Gore's foreign-policy spokesman.
However, South African and U.S. officials say that the pace of
negotiations quickened considerably after ACT UP began its
protests in mid-June. A week later, Mr. Gore's political
director, Donna Brazile, suggested to her old boss, Eleanor
Holmes Norton, the congressional delegate for Washington, D.C.,
that the Congressional Black Caucus might want to write the vice
president and have him spell out his views.
Change in Position
On June 25, a day after he received the letter, Mr. Gore
responded that he supported compulsory licensing and parallel
importing -- a far different position than U.S. negotiators had
originally taken -- and then he added the caveat "so long as they
are done in a way consistent with international agreements."
Effectively, that meant the U.S. would try to negotiate a
statement affirming that South Africa would follow international
norms, as South African officials had repeatedly said they would
do. The U.S. dropped efforts to change South Africa's law.
Instead, the pharmaceutical companies would be left to pursue
their case to invalidate the law and to try to negotiate a
settlement with South Africa's new health minister.
U.S. and South African trade officials now are dickering over the
wording of a final deal to make sure it doesn't prejudice the
industry court case. U.S. Trade Representative Charlene
Barshefsky conferred by videoconference with her South African
counterpart on July 28 on the AIDS issue, and trade negotiators
continue to swap letters.
Mr. Sawyer, the AIDS activist, says he would welcome an agreement
as a "partial resolution," but he still may continue the
protests. He wants Mr. Gore to champion a plan to produce AIDS
drugs cheaply.
"If I were the vice president, I wouldn't worry so long as there
is a deal," says Ms. Norton, the congressional delegate. As for
the protesters, "Nothing will satisfy them."
--
James Love, Director, Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
http://www.cptech.org love@cptech.org
Voice 202.387.8030, Fax 202.234.5176
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