[e-drug] Reuters: UN urged to probe US trade stance on generic drugs

e-drug
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E-DRUG: Reuters: UN urged to probe US trade stance on generic drugs
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http://www.reuters.com/article/idUSTRE66J1CG20100720

By Doug Palmer
Jul 20, 2010

WASHINGTON (Reuters) - AIDS groups on Tuesday accused the United States
of violating the health rights of millions of poor people around the
world through trade policies that make it harder for them to get
life-saving drugs.

A coalition that includes Health Gap, the Foundation for AIDS Rights and
the Thai Network of People Living with HIV/AIDS formally asked Anand
Grover, the UN Special Rapporteur on the Right to Health, to look into
the matter.

The special rapporteur can respond to alleged violations by asking the
concerned government to clarify its policies, reminding it of health
right obligations and requesting information on any corrective action
the government is taking.

The groups were to hold a press conference at the International AIDS
Conference in Vienna on Tuesday.

Their ire is directed at an annual report produced by the U.S. Trade
Representative's office that ranks countries with the worst records on
protecting U.S. intellectual property rights for goods ranging from CDs
to medicines.

They accused the United States of using the "Special 301" report to
pressure countries to give up certain public health rights they have
under a World Trade Organization agreement on intellectual property
rights known as TRIPS.

"Up to and including the 2009 Special 301 report, Brazil, India,
Thailand and other countries were threatened with sanctions under
Special 301 for taking advantage of TRIPS flexibilities, including
utilizing transition periods and issuing compulsory licenses" to allow
domestic firms to produce cheaper versions of drugs patented by U.S.
companies, the groups said in their allegation letter to Grover.

This year's Special 301 report again put Thailand on its "priority watch
list," one step short of its most serious designation. The country has
battled with U.S. drug companies over steps it has taken in its
aggressive anti-AIDS campaign.

USTR also announced a special "out-of-cycle" review of Thailand's
intellectual property rights regime, a step praised by Pharmaceutical
Research and Manufacturers of America, the U.S. drug industry's powerful
lobby group.

But in the same report, USTR reaffirmed its support for countries using
their TRIPS flexibilities as embodied in an international pledge known
as the Doha Declaration, which says they are not bound by global
intellectual property rights from taking steps to deal with public
health crises.

Sean Flynn, associate director of the American University's Program on
Information Justice and Intellectual Property, accused President Barack
Obama of not following through on a campaign promise to support access
to low-cost generic drugs.

Obama's campaign literature pledged "to break the stranglehold that a
few big drug and insurance companies have on these life-saving drugs,"
said Flynn, who is the counsel of record on the groups' letter to the UN
special rapporteur.

(Editing by Eric Walsh)

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Mike Palmedo
Assistant Director
Program on Information Justice and Intellectual Property
American University Washington College of Law
4801 Massachusetts Ave., NW
Washington, DC 20016
T - 202-2274-4442 | F - 202-274-4495
mpalmedo@wcl.american.edu

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E-DRUG: Reuters: UN urged to probe US trade stance on generic drugs (2)
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This is a fantastic initiative that goes to the heart of the political
economy of health and the poor use of LEGAL flexibilities under the WTO's
TRIPs regime of compulsory licences (apparently some countries are more
equal than others - the US is a frequent user of CLs - check out the
excellent resource on this put out by KEI formerly CPTech).

It is actually fantastic that American groups are taking the lead on this
issue - paticularly as many countries have been whipped into shape with this or the threat of a Special 301 listing...

This is issue of the Special 301 has been covered excellently by Raghavan at http://www.twnside.org.sg/title/tilting.htm

The relevant excerpt:

Until very recently, trade diplomats in Geneva and in capitals continued to
hold the view that the WTO and the DSU have prevented US unilateralism -
even though the US administration officials (the US Trade Representative
(USTR)), in testimony in 1994 to Congress and letters to Congressional
leaders in the House and Senate and in other statements leading to the
enactment by Congress of trade legislation to give effect to the Marrakesh
Agreement Establishing the WTO, had said the US would retain its "S.301"
family of laws and asserted the US' right to use unilateral sanctions and
threats.

(The "S.301" family of laws (S.301, "Special 301" and "Super 301") refers to Sections 301-310 of the US Trade Act of 1974, as amended and expanded by the US Trade and Competitiveness Act of 1988. These enable the initiation of a complaint by an individual or enterprise, or self-initiation by the USTR, that the rights of the US under any bilateral, plurilateral or multilateral trade agreement are being violated. "Special 301" provisions relate to purported violations of intellectual property rights, and "Super 301" provisions to a general catch-all of "unfair trade practices." The procedures and powers provide for unilateral determination of such violations, asking the trading partner concerned to negotiate and remove the restrictions or face penalties in the form of trade sanctions.)

At the time of the implementation process of the WTO Agreement in the US,
many developing-country officials had suggested in private conversations
that the public pro nouncements of the US officials were aimed at Congress,
and did not and could not change the WTO rules. But few make such bold
assertions now and many, at formal and informal meetings, are raising these
questions.

In January 1999, the EC raised a dispute on Sections 301-310 of the US Trade Act. The panel has handed down a ruling that the US law may be a violation, but that WTO Members and the trading community could be satisfied with the US administration's "Statement of Administrative Action" (SAA) to Congress and a Congressional approval of this as part of the US Uruguay Round Agreements Act 1994 (the US implementation law to give effect to the Uruguay Round agreements), and the assurances and statements made by the US before the panel, as assuring trade security. This is a ruling so blatantly based on politics rather than a legal interpretation of rules that it strengthens the view of critics that the WTO, behind its outward veneer of being a "rules-based organization" with a credible dispute settlement system upholding the rights of the weak as much as those of the strong, is basically a power-based institution, in terms of not only its negotiated agreements but also their administration.7
...

Nearly six years after Marrakesh, and in the sixth year of the WTO, in the
light of the workings of the DSU, the picture is, however, at best a very
mixed one -with some advantages but far more emerging signs of disadvantages of the DSU and the WTO for the developing world.

...

4.3. But the WTO system has now swung to the other extreme by bringing to
bear an extremely legalistic (and, in the latest US S.301 case, a
"political") approach to trade dispute matters that fall in the overall
sphere of socio-politico-economy.

4.3.A. The panel ruling in the US S.301 case has other disquieting
features. A panel is expected to give a finding as to whether the actions or omissions under scrutiny are inconsistent (or not) with an obligation under the particular agreement. In all the rulings in disputes up till then, the panels had given a clear finding Ð though sometimes there could be disagreement with their views.

But in this case, the panel has fudged the issue of whether or not
S.301-310 of the US Trade Act of 1974, as amended (19 U.S.C paragraphs
2411-2420), is in compliance. Instead of giving a finding on the basis of
the law, the panel has brought in extraneous facts about the US
administration's expression of intent on how it would administer the
provisions, and the US statements to the same effect before the panel.

In the dispute raised by the US against India over the latter's TRIPS
obligations (to provide a mailbox mechanism to receive patent applications), the panel and the Appellate Body ruled out the expressed intention of the Indian government to implement the transition provisions through administrative orders. Both the panel and the Appellate Body insisted that only a provision of law could be considered adequate. What was given prominence, and on the basis of which the ruling went against India, was the existence or absence of a law. The firm intention of the government to implement its obligations through administrative actions was given no weight.

But in the S.301 case against the US, the intentions of the administration
expressed to and accepted by Congress (but not through law) and the US
assurances to the panel have been given weight, and a conclusion drawn that
other WTO Members could get "trade security" from this!

Riaz Tayob
SEATINI - South Africa Chapter
riaz.tayob@gmail.com