The Doha multilateral trade round is in crisis.An important deadline was missed in late March to establish a framework for agriculture negotiations.And there is uncertainty about whether progress can be achieved during the remaining months before the ministerial meeting in Cancun in September. A sign of renewed confidence and momentum for the trade round is urgently needed.
While the agricultural discussions appear deadlocked, there is one step than can be taken now to return momentum to the trade round, a round that could help produce economic growth and new jobs in the United States, as well as lift millions around the world out of poverty this decade.With a little movement from all sides, a compromise can be forged by this month’s World Trade Organization meeting in Sharm el-Sheikh, Egypt, over the highly symbolic issue of expanding access to essential medicines.
The problem negotiators are trying to resolve is straightforward if also polarizing and politically charged.Under the treaty on Trade-Related Aspects of Intellectual Property Rights (TRIPS), patents are allowed on drugs because they spur the development of new medicines. But the treaty is finely balanced. Countries facing emergencies can override patents as long as rights-holders are compensated and the drugs are produced locally in accordance with TRIPS rules. Because most poor countries lack this domestic manufacturing capacity, they need a safety valve that, in an emergency would allow them to import generic copies from traditional suppliers in such countries as India, Argentina or Egypt.
In November 2001, the international community agreed to find a workable mechanism that creates such a legal safety valve for poor countries. But negotiations remain mired in a dispute among WTO Members over the scope of diseases that should be covered by this mechanism. The United States has proposed limiting the scope to major killers in poor countries — such as HIV, tuberculosis, malaria and other epidemics. Many developing countries want an open-ended arrangement under which they could import copies of patented drugs for any disease.
Poverty is the barrier, not patents.
Some have portrayed this impasse in the negotiations as the reason why millions continue to lack access to essential, life-saving medicines. But this ignores the fact that the vast majority of essential drugs are already off patent or were never patented in developing countries. For the majority of people in the world who live on less than a dollar a day, patents are not the barrier, it is profound, grinding poverty. Poverty, perpetuated by corrupt governments, failed economic policies and political systems, and the refusal of wealthy nations to allow poor countries to compete in their markets, explains why countless millions do not have access to healthcare and medicines.
The WTO can do little directly to affect health.But, by increasing opportunities for free trade and the incomes that trade generates, it can have an exponential impact on the ability of people in poor countries to secure a better standard of living and improved health. Especially in the area of agricultural reform, Europe, the United States and other wealthy countries must demonstrate that they are serious about lowering tariffs and subsidies that will enable developing countries to compete fairly.
The truth is that the current impasse is as much about developing countries’ mistrust of the Doha round generally as about expanding access to essential medicines.This should hardly be surprising to the European Union or the United States.On the one hand, we press the world’s developing countries to lower tariffs and take other steps to open their markets and more fully integrate themselves into the global economy. On the other, we refuse to lower our trade barriers on agricultural products or manufactured goods.
The real goal of the Doha round is to bring down barriers globally — for rich and poor alike.To make the round worthy of its full name — the Doha Development Agenda — special consideration must be given to developing countries that will better enable them to lift themselves out of poverty. Ultimately, developing countries can benefit from intellectual property rights.Undermining this legal framework will contribute little to the fight against HIV/AIDS and other health epidemics. But this argument will only be credible if developing countries are given an opportunity to compete fairly in the world trading system.
Waivers are the solution.
Returning to the problem at hand, there is a practical way out of the current logjam in the negotiations.First, the challenge is to help poor countries so rich countries should not be eligible as importers.Furthermore, a waiver process, based on pre-defined criteria and a case-by-case review, would achieve the goal of establishing an effective and sustainable safety valve for poor countries.The waiver process, grounded in existing WTO rules, would also provide a safeguard against abuses.
The sooner WTO members realize that there is a practical solution to the pharmaceuticals issue, and move on to the major issues in this round that will affect the standard of living and health of millions, the better.
Thomas S. Foley served as speaker of the House (1989-1995) and as Ambassador to Japan (1997-2001.)He is currently a partner at the law firm of Akin Gump and serves as North America chairman of the Trilateral Commission.