Letter from Eight NGOs to President Bush Asking for the Exclusion of Intellectual Property from the South African Customs Union FTA

Dear President Bush:
Your pending trip to Africa is intended to highlight the administration’s commitment to addressing the HIV/AIDS pandemic on the continent. However, your administration has just commenced trade negotiations with the Southern African Customs Union (SACU) that may severely limit countries’ ability to take appropriate measures to address HIV/AIDS and other serious health problems.
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July 2, 2003

President George W. Bush
The White House
1600 Pennsylvania Avenue, NW
Washington DC

Re: Excluding Intellectual Property from negotiations over a U.S.- Southern African Customs Union (SACU) Free Trade Agreement

Dear President Bush:

Your pending trip to Africa is intended to highlight the administration’s commitment to addressing the HIV/AIDS pandemic on the continent. However, your administration has just commenced trade negotiations with the Southern African Customs Union (SACU) that may severely limit countries’ ability to take appropriate measures to address HIV/AIDS and other serious health problems.

Without taking a position on the idea of a U.S.-Southern Africa Free Trade Agreement, we are writing to urge you in the strongest terms to exclude intellectual property from negotiations over any such agreement.

All of the member countries of SACU, as well as the United States, are members of the World Trade Organization. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) sets a minimum standard for intellectual property protection.

The TRIPS also includes certain flexibilities, however. In the 2001 Doha Declaration on the TRIPS Agreement and Public Health, countries “affirm[ed] that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.” The Declaration emphasized the flexibilities inherent in TRIPS and countries’ right to use them to the fullest extent possible. “We reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose,” the declaration states.

The only purpose of including intellectual property in a U.S.-Southern Africa Free Trade Agreement is to require countries to provide patent and other intellectual property protections that go beyond the requirements of the TRIPS (known as “TRIPS-plus.”). That is, the agreement will seek to limit the very flexibilities that the Doha Declaration, of which the U.S. is a signatory, affirmed.

The Trade Act of 2002 specifically enacts respect for the Doha Declaration as a principal negotiating objective of the United States in trade negotiations with other nations.

Yet in formally notifying Congressional leaders of the Administration’s intent to initiate negotiations for a free trade agreement with the nations of the South African Customs Union, U.S. Trade Representative Robert Zoellick confirmed the U.S. intention to negotiate TRIPS-plus measures. The United States, he stated, would “seek to establish standards that reflect a standard of protection similar to that found in U.S. law and that build on the foundations established in the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPs Agreement) and other international intellectual property agreements, such as the World Intellectual Property Organization Copyright Treaty and Performances and Phonograms Treaty, and the Patent Cooperation Treaty.”

If other U.S. free trade agreements are an indication, among the limitations likely to be included in a U.S.-Southern Africa Free Trade Agreement are:

-Restrictions on the grounds for compulsory licensing: TRIPS provides countries with complete freedom to determine the grounds for granting a compulsory license (authorizing price-lowering generic competition while a product is still on patent). Several U.S. free trade agreements have limited compulsory licensing to a very restricted set of cases, making it almost impossible to undertake compulsory licensing in the private sector.

-Marketing Approval Data Exclusivity: TRIPS imposes an obligation for countries to protect marketing approval data submitted for new chemical entities, but the scope of the required protection is limited. Several U.S. free trade agreements require much more extensive protections, typically five years of exclusivity for all data submitted to show pharmaceutical safety and efficacy, and not just for new chemical entities. Such provisions are likely to keep generics off the market during the period of exclusivity, providing a back-up form of patent protection to block compulsory licensing efforts.

-Linking Marketing Approval to Patent Status: Although the TRIPS agreement is totally silent on the matter, with no such requirements, some U.S. free trade agreements link a party’s ability to get regulatory approval to market a drug to the patent status of the drug. In the United States, this kind of linkage has been subject to frequent abuse, effectively leading to unjustified patent term extensions. Both your administration and Congress have taken recent steps to remedy some of these problems – but our trade policy is seeking to export them to other nations.

These examples are illustrative but not comprehensive. There are many other provisions, commonly urged by the U.S. in free trade agreement negotiations, which also inhibit countries’ TRIPS flexibilities.

For one of the SACU member countries, the stakes are higher still. Lesotho is a least-developed country. Paragraph Seven of the Doha Declaration stipulated that least-developed countries do not need to enforce pharmaceutical patent protections until 2016. To require Lesotho to forfeit this right as part of a Southern African Free Trade Agreement would be a major betrayal of the promise of Doha.

The Southern African region suffers from the highest rates of HIV infection in the world. “National adult HIV prevalence has risen higher than thought possible, exceeding 30 percent” in much of the region, notes UNAIDS. HIV prevalence rates are 38.8 percent in Botswana, 31 percent in Lesotho, and 33.4 percent in Swaziland. South Africa has the world’s largest population of people with HIV/AIDS.

Your AIDS initiative recognizes the imperative of treatment for people with HIV/AIDS. Treatment is expensive, but massive savings are available through use of generic medicines and reaping the benefits of generic competition. Indeed, it will not be practicable for poor countries to provide treatment, or for donors to support treatment efforts, unless lower-priced medicines — only obtainable through generic competition — are used.

Yet the intellectual property measures likely included in a U.S.-Southern Africa Free Trade Agreement will work to delay the entry of generics, and defer the day when consumers and procurement agencies can reap the benefits of generic competition.

This threatens to impede dramatically the effort to provide treatment to people with HIV/AIDS, with devastating consequence for millions. Even if exemptions were included for antiretrovirals, other drugs needed for AIDS-related conditions will remain covered by monopoly-granting patents.

And even if drugs in any way related to AIDS treatment were excluded, the hugely stressed economies of Southern Africa cannot afford to sacrifice the benefits of generic competition for other medicines.

For the majority of the region’s population, higher prices induced by TRIPS-plus provisions in a U.S.-Southern Africa free trade agreement will simply mean they go without essential medications. This is exactly what the Doha Declaration promised would not occur. And it is exactly the opposite of what the United States should be seeking in the region.

Fortunately, there is a simple way to avoid this problem: From the start, exclude intellectual property from negotiations over a U.S.-Southern Africa Customs Union free trade agreement.

We look forward to your response. Please direct your reply to Robert Weissman, co-director, Essential Action, P.O. Box 19405, Washington, DC 20036, 202-387-8030, [email protected]

Sincerely,

Essential Action
Africa Action
Doctor Without Borders/Medicins Sans Frontieres
Health GAP
Consumer Project on Technology
Global AIDS Alliance
Oxfam
ACT-UP Paris

Cc: U.S. Trade Representative Robert Zoellick