Africa Group proposes amendment to the TRIPS agreement in relation to access to medicines

Geneva, 2 Dec (Kanaga Raja) -- The Chair of the TRIPS Council Ambassador Tony Miller of Hong Kong China is to hold further consultations on a proposal submitted by Nigeria on behalf of the African Group on an amendment to the TRIPS agreement to implement paragraph 6 of the Doha Declaration on TRIPS and Public Health.

The formal proposal tabled on 30 November, just on the eve of the informal meeting, got some mixed reactions, in some preliminary comments from members. Members had only just received the document and therefore said that they would comment in detail later, trade officials said.

The proposal by Nigeria was submitted at an informal session of the TRIPS Council on 1 December where a number of mainly developed countries directly or implicitly criticized the proposal, while a number of developing countries called for further consultations on it.

Among those criticizing the proposal were the US, the EU, Switzerland, Chinese Taipei, Japan, Canada, Australia and Hong Kong China. These members stressed that the amendment should be no more than a technical translation of the entire 2003 decision, and that the negotiations should not be re-opened.

According to trade officials, several developing countries that spoke were non-committal on whether they approved or disapproved of the proposal, preferring to back Malaysia's call for consultations and India's welcoming of the debate's move from procedure to substance. Among these were: Argentina, Malaysia, India, Brazil, Mexico, Israel and Thailand. Pakistan broadly supported the proposal.

The TRIPS Council also met on 2 December to take up the issues of the review of Art. 27.3b of the TRIPS agreement as well as the relationship between the TRIPS agreement and the Convention on Biological Diversity, among others.

Nigeria's proposal on behalf of the African group (IP/C/W/437) was for converting the 30 August 2003 waiver into an amendment of the TRIPS Agreement.

The General Council on 30 August 2003 adopted a decision to implement paragraph 6 of the Doha Declaration on TRIPS and Public Health. The decision took the form of two waivers, that is, a waiver to the obligations under Art. 31(f) and a second waiver on the obligations under Art. 31(h) of the TRIPS agreement.

The African Group, in referring to paragraph 11 of the decision, said that the decision was adopted on the understanding that the TRIPS Council would prepare an amendment to replace the waivers for each Member on the date on which the amendment takes effect for that Member.

"Members therefore explicitly agreed that the amendment will be based, where appropriate, on the Decision." In this regard, Nigeria said, the appropriateness of particular elements should be understood to mean those elements in the Decision that are necessary to ensure the amendment is legally predictable, secure and economically and socially sustainable.

Nigeria said that the Group's proposal is aimed at providing the basis for the amendment. It is proposed, Nigeria added, to amend Art. 31 by adding a second paragraph to the article so that the current text of Art. 31 would become Art. 31 paragraph 1 and the amendment text would become Art. 31 paragraph 2.

The proposed amendment would be based on the waivers with modifications, as appropriate. In essence, it is proposed to eliminate a number of provisions in the 30 August Decision as they would be redundant in the context of an amendment or where their purpose would otherwise be served by other provisions of the TRIPS agreement, such as the Agreement's already existing provisions on compulsory licenses read together with the provisions on enforcement, Nigeria said.

The proposed amendment by Nigeria, which said that the actual text of the amendment has been modified including with respect to the arrangement of paragraphs to fit into the TRIPS agreement, is as follows:

"[Article 31]

[2] The obligations under subparagraph 1(f) of this Article shall not apply to such use that is necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s) who notifies(4) the Council for TRIPS of its intention to use the system established under this paragraph In accordance with the terms set out below.

(a) For the purposes of this paragraph:

(I) "pharmaceutical product" means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address the public health problems as recognized in paragraph 1 of the Doha Declaration. It is understood that, among others, active ingredients necessary for its manufacture and diagnostic kits needed for its use would be included;

(ii) "eligible importing Member" means any least-developed country Member, and any other Member with no or insufficient manufacturing capacity in the pharmaceutical sector that has made a notification to the Council for TRIPS of its intention to use the system as an importer, it being understood that a Member may notify at any time that it will use the system in whole or in a limited way, for example, only in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use;

(iii) "exporting Member" means a Member using the system set out in this paragraph to produce pharmaceutical products for, and export them to, an eligible importing Member.

(b) Where use is made by an eligible importing Member of the subject matter of a patent under this paragraph, adequate remuneration for purposes of subparagraph 1(h) of this Article shall be paid in that Member taking into account the economic value to the importing Member of the use that has been authorized in the exporting Member. Where a compulsory licence is granted for the same products in the importing Member, the obligation of that Member under subparagraph 1(h) of this Article shall be waived in respect of those products for which remuneration in accordance with the first sentence of this subparagraph has been paid in the exporting Member.

(c) Products produced under the licence shall be clearly identified as being produced under the system set out in this paragraph through specific labelling or marking. Suppliers should distinguish such products through special packaging and/or special colouring/shaping of the products themselves, provided that such distinction is feasible and does not have a significant impact on price.

(d) Members shall ensure the availability of effective legal means to prevent the re-exportation or unlawful importation into, and sale in, their territories of products produced under the system set out under this paragraph, using the means available under Part III of this Agreement. If any Member considers that such measures are proving insufficient for this purpose, the matter may be reviewed in the Council for TRIPS at the request of that Member.

(e) With a view to harnessing economies of scale for the purposes of enhancing purchasing power for, and facilitating the local production of, pharmaceutical products; where a developing or least-developed country Member is party to a regional trade agreement within the meaning of Article XXIV of the GATT 1994 or the Decision of 28 November 1979 on Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries (L/4903), at least half of the membership of which is made up of countries on the United Nations list of least-developed countries, the obligation of that Member under subparagraph 1(f) of this Article shall be waived to the extent necessary to enable a pharmaceutical product produced or imported under a compulsory licence in that Member to be exported to the markets of those other developing or least-developed country parties to the regional trade agreement.

(f) Members recognize the desirability of promoting the transfer of technology and capacity building in the pharmaceutical sector in order to help importing Members establish their own manufacturing capacities in this sector.

To this end, eligible importing Members and exporting Members are encouraged to use the system set out in this paragraph in a way which would promote this objective. Members undertake to cooperate in paying special attention to the transfer of technology and capacity building in the pharmaceutical sector in the work to be undertaken pursuant to Article 66.2 of this Agreement, paragraph 7 of the Declaration and any other relevant work of the Council for TRIPS.

(g) Members shall not challenge any measures taken in conformity with the provisions of this paragraph under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994.

(4) It is understood that this notification does not need to be approved by a WTO body in order to use the system set out under this paragraph. The notification will be made available publicly by the WTO Secretariat through a page on the WTO website dedicated for this purpose."

During discussions at the informal session, the US said that it doubted whether the draft would help the TRIPS Council meet its March 2005 deadline for the amendment, while the EU said that the proposal is not a promising development. Japan and the US also wanted the August 2003 Chairperson's statement to be reflected.

Nigeria and Kenya defended the alterations arguing that texts originally in the waiver but deleted or altered in the waiver were superfluous or inappropriate within the TRIPS Agreement. They also said that the August 2003 chairperson's statement had served its purpose in producing consensus, and like other statements made at the same time, which also helped to produce consensus, is no longer needed.

TWN Info Service on WTO and Trade Issues (Dec04/6)
15 December 2004
Third World Network
www.twnside.org.sg