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Vicious sting in the tail of FTAs

Latha Jishnu

Business Standard | 24 June 2009

Vicious sting in the tail of FTAs

by Latha Jishnu

New Delhi — Activists of various kinds, but particularly those dealing with health issues, are having a tough time of late. They are spending long hours poring over the unlikeliest of documents to gird up for their next big battle. The documents are trade agreements between nations, rife with convoluted legalese and bureaucratic caveats, and whose fine print can tie even lawyers in knots. In particular, it is the deceptively-named free trade agreements or FTAs which are engaging a whole lot of activists here and abroad because these remarkably comprehensive pacts — they cover everything from investment and banking regulations to labour and agriculture practices — carry hidden threats to the well-being of millions of people in poor countries.

One such ramification is on people’s health. Because FTAs have more stringent provisions than those mandated by the World Trade Organisation under the TRIPS for protecting the intellectual property rights (IPRs) of the developed world, such agreements can directly impact access to affordable medicines. That’s why health activists such as Medecins sans Frontieres (MSF) are mobilising opinion against the slew of FTAs that India is negotiating with Japan, the European Union (EU), South Korea and Asean among others. Leena Menghaney and Kajal Bhardwaj may be lawyers who work for MSF in Delhi, but even they found it difficult initially to assess the implications of the many FTAs that are coming up for negotiation.

But help has come from seasoned analysts like Carlos M Correa who heads the Centre for Interdisciplinary Studies at the University of Buenos Aires and is an internationally recognised expert on IPR issues. And his diagnosis is disturbing. After analysing the leaked draft of the controversial EU draft of the FTA — the authorities have refused to put up the draft agreement for public scrutiny despite a series of protests in Delhi —Correa says that the proposed chapter on IPRs is ‘a clear attempt by the EU to increase the level of IPR protection in without considering the development needs of India’. In simple terms, it means that the EU, following in the footsteps of the US, is pressing TRIPS-plus provisions in the FTA.

He has circled two provisions which, if India agrees to, would significantly limit access to medicines. One is Article 9.3 which would compel India to extend the patent monopoly, currently 20 years, by another five years to compensate for the time required to get marketing approval for the drug. This provision is modelled on the ‘supplementary protection certificate’ applied in the EU. In practice this would extend the monopoly of the rights-holders and delay the entry of generic competition which is the only way to bring down prices and increase the affordability of drugs.

The second provision is Article 10 which would force India to provide sui generis protection for test data submitted for approval of pharmaceutical and agrochemical products. This is not mandated by TRIPS. Although the EU draft does not specify a time-frame for this data exclusivity, Correa points out that such protection lasts for 10 years in the EU and a possible additional year if new indications for known product have been found. Such a provision would go against India’s Patent Act. This is a lethal provision because it would mean that even in the absence of a patent for a particular product, the data exclusivity period would block the entry of low-priced generics.

The reason why organisations like MSF are bolstering the campaign against some of the lethal provisions of the FTAs is simple: 85 per cent of the 80,000 HIV/AIDS patients that MSF treats in over 30 countries depend on generics from India, which has become the dispensary for the poor of the world. Thanks to competition from Indian generics, the cost of treatment for HIV/AIDS treatment has come down dramatically to $150 per patient per year against $10,000 to $15,000 in the 1990s.

Among those in the vanguard of the campaign is K M Gopakumar of Third World Network (TWN) who says that the more worrisome aspect is the provision for damages in the proposed FTAs with the EU and others. In the case of the Japan-India FTA, which is into the tenth round of negotiations, it is the remedy for patent violations. The EU draft expands the scope of injunction against intermediaries whose services are used by a third party to infringe an IPR, and has a provision for compulsory payment of legal cost to the unsuccessful party and obligation to disclose information on intermediaries.

What is slowly emerging is the beginning of a composite oppositition to FTAs in the country. As of now, the farm lobby and the huge network of activists who campaign against the IPR regime of seed and biotech multinationals to protect the farmer’s rights to seeds do not appear to have woken up to the dangers posed by FTAs. But the newly-formed Forum on FTAs has promised that it will be accelerating the campaign in coming months. IPR, it appears, could soon become a popular rallying point just as investment norms and banking regulations were, and still are, cause for much heated debate.

 source: Business Standard