Letter urging IP be excluded from US-SACU trade negotiations

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 secto=
r.

- 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, rob@essential.org.

Sincerely,

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

Cc: U.S. Trade Representative Robert Zoellick