By Roberto Azevêdo
GENEVA, Jan 22 2016 (IPS)

In 2015 the international community took some huge strides forward on a number of vital issues.

There was the agreement on the United Nations new Sustainable Development Goals.

There was the remarkable breakthrough in Paris in the fight against climate change.

Roberto Azevêdo

And, late in December, at the World Trade Organization (WTO) ministerial conference in Nairobi, members agreed a set of very significant results. In fact, they delivered some of the biggest reforms in global trade policy for 20 years.

We must seek to capitalise on this progress in 2016.

Let me explain in a bit more detail what was delivered in Nairobi.

The Nairobi Package contained a number of important decisions ­ including a decision on export competition. This is truly historic. It is the most important reform in international trade rules on agriculture since the creation of the WTO.

The elimination of agricultural export subsidies is particularly significant in improving the global trading environment.

WTO members ­ especially developing countries ­ have consistently demanded action on this issue due to the enormous trade-distorting potential of these subsidies. In fact, this task has been outstanding since export subsidies were banned for industrial goods more than 50 years ago. So this decision corrected an historic imbalance.

Countries have often resorted to export subsidies during economic crises ­ and recent history shows that once one country did so, others quickly followed suit. Because of the Nairobi Package, no-one will be tempted to resort to such action in the future.

This decision will help to level the playing field in agriculture markets, to the benefit of farmers and exporters in developing and least-developed countries.

This decision will also help to limit similar distorting effects associated with export credits and state trading enterprises.

And it will provide a better framework for international food aid ­ maintaining this essential lifeline, while ensuring that it doesn’t displace domestic producers.

Members also took action on other developing-country issues, committing to find a permanent solution on public stockholding for food security purposes, and to develop a Special Safeguard Mechanism.

And members agreed a package of specific decisions for least developed countries, to support their integration into the global economy. This contained measures to enhance preferential rules of origin for these countries and preferential treatment for their services providers.

And it contained a number of steps on cotton ­ helping low-income cotton producers to access new markets.

Finally, a large group of members agreed on the expansion of the Information Technology Agreement. Again, this was an historic breakthrough. It will eliminate tariffs on 10 per cent of global trade ­ that’s 1.3 trillion dollars worth of trade, making it the WTO’s first major tariff cutting deal since 1996.

Altogether, these decisions will provide a real boost to growth and development around the world.

This success is all the more significant because it comes so soon after our successful conference in Bali that delivered a number of important outcomes, including the Trade Facilitation Agreement. (TFA)

The TFA will bring a higher level of predictability and transparency to customs processes around the world, making it easier for businesses ­ especially smaller enterprises ­ to join global value chains.

It could reduce trade costs by an average of 14.5 per cent – with the greatest savings being felt in developing countries.

The Agreement has the potential to increase global merchandise exports by up to 1 trillion dollars per annum, and to create 20 million jobs around the world.

That’s potentially a bigger impact than the elimination of all remaining tariffs.

So the challenge before us is very significant.

For instance, during or the last two years, we have been trying to reinvigorate the Doha agenda on development, exploring various ways of overcoming the existing difficulties. We tested different alternatives over several months of good engagement, but the conversations revealed significant differences, which are unlikely to be solved in the short term.

But the challenge is not limited only to the question of what happens to the Doha issues, it is about the negotiating function of the WTO. It is about what members want for the future of the WTO as a standard and rule-setting body. And the challenge is urgent.

The world won’t wait for the WTO. Other trade deals will keep advancing.

The wider the gap between regional and multilateral disciplines, the worse the trade environment becomes for everyone, particularly businesses, small countries and all those not involved in major regional negotiations.

But the outlook is not bleak. I said at the outset that 2016 was full of promise. I truly believe that ­ because, while we face real challenges, there are also real opportunities before us.

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Excerpt:

By Yilmaz Akyüz
GENEVA, Dec 29 2015 (IPS)

Foreign direct investment (FDI) is perhaps one of the most ambiguous and the least understood concepts in international economics. Common debate on FDI is confounded by several myths regarding its nature and impact on capital accumulation, technological progress, industrialization and growth in emerging and developing economies.

Yilmaz Akyüz, chief economist of the South Centre, Geneva.

It is often portrayed as a long term, stable, cross-border flow of capital that adds to productive capacity, helps meet balance-of-payments shortfalls, transfers technology and management skills, and links domestic firms with wider global markets.

However, none of these is an intrinsic quality of FDI. First, FDI is more about transfer and exercise of control than movement of capital. Contrary to widespread perception, it does not always involve flows of financial capital (movements of funds through foreign exchange markets) or real capital (imports of machinery and equipment for the installation of productive capacity). A large proportion of FDI does not entail cross-border capital flows but is financed from incomes generated on the existing stock of investment in host countries. Equity and loans from parent companies account for a relatively small part of recorded FDI and even a smaller part of total foreign assets controlled by transnational corporations.

Second, only the so-called greenfield investment makes a direct contribution to productive capacity and involves cross-border movement of capital goods. But it is not easy to identify from reported statistics what proportion of FDI consists of such investment as opposed to transfer of ownership of existing firms (mergers and acquisitions). Furthermore, even when FDI is in bricks and mortar, it may not add to aggregate gross fixed capital formation because it may crowd out domestic investors.

Third, what is commonly known and reported as FDI may contain speculative components and creates destabilizing impulses, including those due to the operation of transnational banks in host countries, which need to be controlled and managed as any other form of international capital flows.

Fourth, the immediate contribution of FDI to balance-of-payments may be positive, since it is only partly absorbed by imports of capital goods required to install production capacity. But its longer-term impact is often negative because of high import content of foreign firms and profit remittances. This is true even in countries highly successful in attracting export-oriented FDI.

Finally, superior technology and management skills of transnational corporations create an opportunity for the diffusion of technology and ideas. However, the competitive advantage these firms have over newcomers in developing countries can also drive them out of business. They can help integrate developing countries into global production networks, but participation in such networks also carries the risk of getting locked into low value-added activities.

These do not mean that FDI does not offer any benefits to developing and emerging countries. Rather, policy in host countries plays a key role in determining the impact of FDI in these areas. A laissez-faire approach could not yield much benefit. It may in fact do more harm than good.

Successful examples are found not necessarily among countries that attracted more FDI, but among those which used it in the context of national industrial policy designed to shape the evolution of specific industries through interventions. This means that developing countries need adequate policy space vis-à-vis FDI and transnational corporations if they are to benefit from it.

Still, the past two decades have seen a rapid liberalization of FDI regimes and erosion of policy space in emerging and developing countries vis-à-vis transnational corporations. This is partly due to the commitments undertaken in the World Trade Organization as part of the Agreement on Trade-Related Investment Measures .

However, many of the more serious constraints are in practice self-inflicted through unilateral liberalisation or bilateral investment treaties signed with more advanced economies – a process that appears to be going ahead with full force, with the universe of investment agreements reaching 3,262 at the end of 2014.

Unlike earlier bilateral treaties, recent agreements give significant leverage to international investors. They often include rights to establishment, the national treatment and the most favoured-nation clauses, broad definitions of investment and investors, fair and equitable treatment, protection from expropriation, free transfers of capital and prohibition of performance requirements.

Furthermore, the reach of bilateral investment treaties has extended rapidly thanks to the use of the so-called Special Purpose Entities which allow transnational corporations from countries without a bilateral treaty with the destination country to make the investment through an affiliate incorporated in a third-party state with a bilateral treaty with the destination country.

Many bilateral investment treaties include provisions that free foreign investors from the obligation of having to exhaust local legal remedies in disputes with host countries before seeking international arbitration. This, together with lack of clarity in treaty provisions, has resulted in the emergence of arbitral tribunals as lawmakers in international investment which tend to provide expansive interpretations of investment provisions in favour of investors, thereby constraining policy further and inflicting costs on host countries.

Only a few developing countries signing such bilateral treaties with advanced countries have significant outward FDI.

Therefore, in the large majority of cases there is no reciprocity in deriving benefits from the rights and protection granted to foreign investors. Rather, most developing countries sign them on expectations that they would attract more FDI by providing foreign investors guarantees and protection, thereby accelerating growth and development. However, there is no clear evidence that bilateral investment treaties have a strong impact on the direction of FDI inflows.

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Excerpt:

By Roberto Azevêdo
NAIROBI, Dec 23 2015 (IPS)

World Trade Organization (WTO) members concluded the Tenth Ministerial Conference in Nairobi on 19 December by securing an historic agreement on a series of trade initiatives. The “Nairobi Package” pays fitting tribute to the Conference host, Kenya, by delivering commitments that will benefit in particular the organization’s poorest members.

Roberto Azevêdo

The elimination of agricultural export subsidies is particularly significant.

WTO members, ¬especially developing countries,¬ have consistently demanded action on this issue due to the enormous distorting potential of these subsidies for domestic production and trade. In fact, this task has been outstanding since export subsidies were banned for industrial goods more than 50 years ago.

WTO members’ decision tackles the issue once and for all. It removes the distortions that these subsidies cause in agriculture markets, thereby helping to level the playing field for the benefit of farmers and exporters in developing and least-developed countries.

This decision will also help to limit similar distorting effects associated with export credits and state trading enterprises.

And it will provide a better framework for international food aid ¬ maintaining this essential lifeline, while ensuring that it doesn’t displace domestic producers.

There are also important steps to improve food security, through decisions on public stockholding and towards a special safeguard mechanism, as well as a package of specific decisions for Least Developing Countries (LDCs).

This contains measures to enhance preferential rules of origin for LDCs and preferential treatment for LDC services providers.

And it contains a number of steps on cotton, such as eliminating export subsidies, and providing duty-free-quota-free market access for a range of LDC cotton products immediately.

In addition, we have approved the WTO membership of Liberia and Afghanistan, and we now have 164 member countries.
And I think we are all committed to supporting these two LDCs to boost their growth and development.

We also saw continued commitment to help build the trading capacity of LDCs through the excellent support shown at the Enhanced Integrated Framework (EIF) pledging conference.

And, finally, a large group of members agreed on the expansion of the Information Technology Agreement (ITA). Again, this is an historic breakthrough. It will eliminate tariffs on 10 per cent of global trade ¬ making it our first major tariff cutting deal since 1996.

While we celebrate these outcomes, we have to be clear-sighted about the situation we are in today.

Success was achieved here despite members’ persistent and fundamental divisions on our negotiating agenda – ¬ not because those divisions have been solved.

We have to face up to this problem.

The Ministerial Declaration acknowledges the differing opinions. And it instructs us to find ways to advance negotiations in Geneva.

Members must decide, the world must decide, about the future of this organization.

The world must decide what path this organization should take.

Inaction would itself be a decision. And I believe the price of inaction is too high.

It would harm the prospects of all those who rely on trade today ¬ and it would disadvantage all those who would benefit from a reformed, modernized global trading system in the future ¬ particularly in the poorest countries.

So we have a very serious task ahead of us in 2016.

We came to Nairobi determined to deliver for all those we represent ¬ and particularly for the one billion citizens of Africa.

At the outset, I warned that we were not looking at a perfect outcome. And what we have delivered is not perfect. There are still so many vital issues which we must tackle.

But we have delivered a huge amount. The decisions taken in Nairobi this week will help to improve the lives and prospects of many people ¬ around the world and in Africa.

When we left Geneva, the international media had already written their headlines:

-‘WTO talks break down’

-‘Another failure at the WTO’

That’s exactly how it was in the Ninth Ministerial Conference in Bali two years ago. And we saw it again this year.

Well, we’re getting used to proving those catastrophic headlines wrong.

In the past, all too often, WTO negotiations had a habit of ending in failure.

But, despite adversity ¬ despite real challenges ¬ we are creating a new habit at the WTO: success.

(End)

Excerpt:

By Jomo Kwame Sundaram
ROME, Dec 11 2015 (IPS)

The latest estimates are that over two billion people in the world suffer some micronutrient deficiencies, often referred to as “hidden hunger.” The main sustainable solution is to ensure adequate public health interventions, including clean water, sanitation and hygiene as well as healthy, diverse diets for all.

Jomo Kwame Sundaram. Credit: FAO

In the short term, however, it will be necessary to provide supplements of vitamins, minerals and trace elements to those especially vulnerable, e.g. due to displacement and emergency situations. There is a general consensus that such needs of pregnant and lactating mothers should be especially prioritized due to the intergenerational consequences of child stunting for such reasons.

Developing countries should be able to affordably access locally produced or imported generics of the vitamin and mineral supplements they require. Many current options associated with public-private partnership will instead strengthen the vested interests of the lucrative, large and fast-growing industry for nutrition supplements.

The need for supplementation to address urgent, short-term micronutrient deficiencies should qualify as part of the public health exception to the Trade-Related Aspects of Intellectual Property Rights (TRIPs) rules of the World Trade Organization (WTO). This has not been fully recognized ostensibly because people do not drop dead immediately due to “hidden hunger.”

TRIPS and generics production for developing countries

Under the TRIPS agreement, intellectual property rights (IPRs) — for copyright, trademark, geographical indication, industrial designs and patents — are extended to all signatory countries. Patents, most relevant to public health and access to medicines, give twenty years of protection to inventions.

In the current language, there are no explicit provisions for generic production of patented nutrition supplements. However, there is supposed to be a great deal of flexibility on the basis of public health needs, which could be extended to minerals and vitamins for supplementation.

The TRIPS Agreement provides space for countries taking measures to protect public health. Under Article 31, countries can issue compulsory licenses allowing firms or individuals to produce generic copies of patented products or processes for the domestic market without the owner’s consent in “case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.” The government can also determine adequate payment to the IPR holder.

At the Doha WTO conference in 2001 launching the Doha Development Round of trade negotiations, the Declaration on the TRIPS Agreement and Public Health affirmed the right of countries to protect public health, enable access to medicines, and determine the criteria for issuing a compulsory license. It emphasized that each country “has the right to grant compulsory licenses” and “the right to determine what constitutes a national health emergency or other circumstances of extreme urgency.”

This new text corrected the false impression that some health emergency was needed to justify compulsory licensing. It also spelt out that “public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.”

Technology transfer

Under Article 66.2 of TRIPS, developed country governments are obliged to actively promote technology transfer in establishing manufacturing capabilities for patented processes in developing countries. The 2001 Declaration also reaffirmed the developed countries’ commitment to provide incentives to their corporations to enable technology transfer to the least developed countries. This was part of the original bargain for developing countries to provide protection of IPRs.

Developing countries also have the right to import generics if they lack manufacturing capabilities. A 2003 waiver allows countries unable to domestically produce pharmaceuticals to import them instead. Hence, under compulsory licensing, such countries can import externally produced patented drugs. Thus, while compulsory licensing allows countries to import cheaper generics from countries already producing them, to take advantage of TRIPS Agreement flexibility, countries need to legislate accordingly.

However, exemptions to pharmaceutical patent protection to the least developed countries, enabling them to import without issuing a compulsory license, were only extended until 2016. The upcoming Nairobi WTO ministerial should extend this exemption beyond next year.

While there appears to be legal space under TRIPS for developing countries to use compulsory licensing, they have effectively be prevented from doing this by complicated rules and procedural requirements. Consequently, use of compulsory licensing by developing countries has been largely limited to HIV/AIDS medicines, and almost exclusively used by middle-income countries. LDCs have not issued any compulsory licenses while the total number of applications has declined significantly in the last decade.

Needed actions

Existing TRIPS texts do not preclude compulsory licensing for local generic production in developing countries. However, extension of the right to use compulsory licensing and other such flexibilities to vitamin and mineral supplements is not explicit. While explicit permission is given to AIDs, malaria, tuberculosis and epidemics, even this is rarely used.

In light of the foregoing, the following revisions to WTO provisions to protect developing countries’ right to produce generic vitamin and mineral supplements should be introduced. This will also be in line with the July 2015 Addis Ababa Action Agenda’s commitment to facilitate technology transfer:

• Developing appropriate model legislation to facilitate development of the national legislation needed for compulsory licensing, etc.
• Provide free legal services to developing country governments interested in accessing TRIPS facilities.
• Identify and investigate relevant national vitamin and mineral supplement production needs in partnership with other governments to enable developed countries to meet their technology transfer obligations.

Developing countries need to act to overcome three major constraints to issuing compulsory licenses and bypassing patent legislation for public health. First, the governments must be strong enough to withstand business and political pressures. Second, it is necessary to have enabling legislation in place. Third, these countries need to have production capacity and distribution arrangements in place.
Also, the UN system should offer appropriate technical expertise to advance progress.

(End)

Excerpt:

By Roberto Azevêdo
GENEVA, Dec 11 2015 (IPS)

The Ministerial Conference of the World Trade Organization (WTO) is now just a few days away, from 15 to 18 December in Nairobi.

This is the first time that the WTO has held a Ministerial Conference in Africa­ and therefore expectations are high that it should deliver for Africa ­ and for all developing countries, particularly the least-developed.

This work is happening mainly through two processes.

The first process is that of the negotiations group. Members are working through these groups on a range of specific issues. However, despite intensive efforts on all of the core issues of the Doha Development Agenda (DDA) of world trade negotiations, started in November 2001, I must report that little progress has been made. Gaps between members’ positions remain huge.

This means we haven’t been able to advance in many of the major DDA issues such as agricultural domestic support, for example, or any aspect of market access ­ whether agricultural, non-agricultural, or services.

Nevertheless, a general sense has emerged that consensus might be achievable on some issues ­if, and only if, we work very hard on all of them.

This includes a package of measures for Least Developed Countries (LDCs), which could contain a number of possible elements, such as further steps on Duty-Free and Quota-Free (DFQF), services, cotton and rules of origin.

Another issue which we may be able to harvest is a possible agreement on export competition in agriculture, which may include steps on export subsidies, export credits, the role of state trading enterprises and food aid, for example. Any achievements here would be especially important for developing and least-developed countries.

We are also working on issues such as special safeguard mechanisms and public stockholding for food security purposes, though progress is lacking here as well.

Indeed, at present, nothing is guaranteed. There is still a long way to go, significant gaps still to bridge, and little time remaining.

So, that’s the first process. The second is focused on drafting a Ministerial Declaration. There has been intensive work going on here as well.

In this regard, a majority of delegations made reference to a “Bali-like” Ministerial Declaration (December 2013) in three parts. The first part would have the introductory language, focusing on the importance of the multilateral trading system, the second part would cover the Nairobi deliverables, and the third part would look to the future work of the WTO after Nairobi.

There has been some progress. Clearly, however, we will need to take a different approach for the most contentious issues.

This process on the declaration shows the importance of Nairobi ­ but it also underlines the fact that our work will not end there.

The conversation about the future of the DDA is surely just as important as any deliverables that we will achieve in Nairobi.

The DDA has seen slow progress since its launch in 2001 and when negotiations are slow in the WTO, countries will explore other avenues such as regional trade agreements.

These initiatives are positive, but the WTO must advance as well.

The risk of doing everything in regional forums is that most of the time developing countries and LDCs will be left out of the conversation.

It is only at the multilateral level where all voices are heard, and where the biggest development issues can be properly addressed.

This brings the spotlight back to the WTO, and to our capacity to negotiate.

Nevertheless, I think we cannot disregard important commonalities when thinking the way ahead.

For instance, I think all members agree that:

– We want to deliver in Nairobi.
– Whatever we deliver will not be enough to formally and consensually conclude the Doha Round.
– And members are willing to keep the big Doha issues on the table, agriculture being the most pre-eminent of these.

This discussion on how we move forward will be vitally important for the future of the WTO.

So there is a lot at stake, in terms of the potential deliverables ­ and in terms of what success, or failure, would mean for the future of the multilateral trading system.

Nairobi will be a very important moment in many ways. And I should say that there could be a number of other positive outcomes there.

Ministers of the 162 country members will be asked to approve the membership of Liberia and Afghanistan, for example ­ which will deliver a big boost for growth and development in those two countries.

It is also possible that the deal to expand the Information Technology Agreement will be finalized, which will deliver more economic growth around the world.

And we may see some further progress on the Environmental Goods Agreement.

In addition, we hope to see a strong vote of support for the Enhanced Integrated Framework (EIF) at their pledging conference which will be held on the eve of the ministerial. Indeed, the EIF provides essential support for LDCs, and so this will be another important outcome from the Ministerial Conference.

In conclusion, we have a lot on the table ­ but a lot of work is still required to achieve successful outcomes in Nairobi.

So how do we take forward the outstanding Doha issues after Nairobi? Opinions are quite divergent on this point.

Some members argue that we must keep working on Doha because it is vital for development ­ and that while Doha is not concluded we must not divert our focus to discuss anything else.

Others argue that after years of limited success under the Doha architecture, it is unlikely that this framework could yield any further progress, especially on the more difficult issues.

Therefore, these countries are reluctant to continue engaging in negotiations under this current framework.

These members also believe that for the Organization to function properly, it has to evolve and address whatever new issues members want to talk about. For these members, it is critical that the WTO addresses new concerns; otherwise it risks losing its relevance.

Obviously, it is difficult to reconcile these views.

(End)

Excerpt:

By Germán Velásquez
GENEVA, Nov 10 2015 (IPS)

The important relationship between the examination of patents carried out by national patent offices and the right of citizens to access to medicines hasn’t always been well-understood. Too often these are viewed as unrelated functions or responsibilities of the state. And the reason is clear: patentability requirements are not defined by patent offices, but frequently by the courts, tribunals, legislation or treaty negotiators.

Germán Velásquez

Given the impact of pharmaceutical patents on access to medicines, patent offices should continue to align their work in support of national health and medicine policies, using the freedom permitted by the Trade Related Aspects of Intellectual Property Rights Agreement (TRIPS) to define patentability requirements.

The TRIPS Agreement requires all World Trade Organization (WTO) member states to incorporate into their legislation universal minimum standards for almost all rights in this domain: copyright, patents and trademarks.

A patent is a title granted by the public authorities conferring a temporary monopoly for the exploitation of an invention upon the person who reveals it, furnishes a sufficiently clear and full description of it, and claims this monopoly.

As with any monopoly, it may lead to high prices that in turn may restrict access. The problem is compounded in the case of medicines, when patents confer a monopoly for a public good and essential products needed to prevent illness or death and improve health.

According to the TRIPS Agreement, the patentability requirements used by national intellectual property offices require a product or manufacturing process to meet the conditions necessary to grant patent protection, namely: novelty, inventive step and industrial applicability (utility).

These three elements, however, are not defined in the TRIPS agreement and WTO Member States are free to define these three criteria in a manner consistent with the public health objectives defined by each country.

It is widely held that patents are granted to protect new medicines to reward the innovation effort. However, the number of patents obtained annually to protect truly new pharmaceutical products is very low and falling. Moreover, of the thousands of patents that are granted for pharmaceutical products each year, a few are for new medicines – e..g. new molecular entities (NMEs).

All of the above led the World Health Organization (WHO), in collaboration with the United Nations Conference on Trade and Development (UNCTAD), the United Nations Development Programme (UNDP) and the International Centre for Trade and Sustainable Development (ICTSD), to develop, in 2007, guidelines for the examination of pharmaceutical patents from a public health perspective.

The guidelines were intended to contribute to improving the transparency and efficacy of the patent system for pharmaceutical products, so that countries could pay more attention to patent examination and granting procedures in order to avoid the negative effects of non-inventive developments on access to medicines. The major problems can be identified in the current use of the patent system to protect pharmaceutical innovation: reduction in innovation, high prices of medicines, lack of transparency in research and development costs, and proliferation of patents.

A study carried out by the journal Prescrire analysed the medicines that were introduced to the French market between 2006 and 2011, arriving at the conclusion that the number of molecules that produced significant therapeutic progress reduced drastically: 22 in 2006; 15, 10, 7, 4 in the following years up to 2011, which was a year in which Prescrire declared that only one medicine of significant therapeutic interest was brought to the market. Given that France is one of the largest pharmaceutical markets in the world, the reduction in innovation confirmed France is a good indicator of the global situation.

Oncologists from fifteen countries recently denounced the excessive prices of cancer treatments, which are necessary to save the lives of the patients, and urged that moral implications should prevail; according to them, of the 12 cancer treatments approved in 2012 by the United States Food and Drug Administration, 11 cost more than 100,000 dollars per patient per year.

Since the 1950s, there have been some references to the costs of Research and Development (R&D) for pharmaceutical products. According to some sources the average cost of research for a new pharmaceutical product these figures have increased from 1 million dollars in 1950 to 2.5 billion dollars for the development of a single product.

During the summer of 2014, a number of European countries, including France and Spain, spent many months negotiating with the company Gilead on the price of a new medicine for hepatitis C known as Solvaldi. The price fixed by Gilead was 56,000 Euros per patient for a twelve-week treatment, or 666 Euros per tablet. According the newspaper Le Monde the price of each tablet was 280 times more than the production cost. In France, it is calculated that 250,000 patients should receive this medicine, the cost of which would represent 7 per cent of the annual state medicine budget.

The application of patentability requirements for medicines, given their public health dimension, should be considered with even more care than in the case of regular merchandise or luxury items. The first and most important step is to use the freedom permitted by the TRIPs Agreement to define the patentability requirements: novelty, inventive step and industrial applicability (utility) in a way that keeps sight of public interest in the wide dissemination of knowledge.

(End)

Excerpt:

A group of developing countries brought a tectonic shift at the World Trade Organization on Friday by turning the tables against the industrialised countries, when they offered a positive trade agenda to expeditiously arrive at a permanent solution for food security and other development issues, before adopting the protocol of amendment of the contested Trade Facilitation Agreement.

Bolivia, Venezuela, Cuba and India inflicted a huge blow on the dominant actors in global trade by refusing to join consensus on the protocol required for full implementation of the TFA that is being pushed through the WTO with carrots and sticks.

“This is unimaginable, that New Delhi would decide the fate of decisions at the WTO, which has been a preserve of the United States and the European Union for the last 50 years,” said a trade envoy from a Western country.The mismatch, in terms of progress, between the TFA on one side, and lack of credible movement in agriculture and development on the other, especially in arriving at a permanent solution for public stockholding programmes, has come into the open at various meeting in Africa and elsewhere

Only seven months ago, the industrialised countries were triumphant at the WTO’s ninth ministerial meeting in Bali, Indonesia, after having succeeded in clinching the TFA. At one go, that agreement would harmonise customs procedures in the developing world on a par with the industrialised countries. It would offer enhanced market access for companies in the rich and leading developing countries such as China, Korea, Hong Kong and Singapore.

According to former WTO Director-General Pascal Lamy, the TFA would cut tariffs in developing countries by 10 percent

The developing and poor countries, in return, were offered half-baked outcomes in the Bali package on agriculture and development, including an interim mechanism for public stockholding for food security with a promise of a permanent solution in four years, an agreement on general services in agriculture, transparency-related improvements in what are called tariff rate quota administration provisions, and most trade-distorting farm export subsidies and export credits.

The poorest countries, as part of the “development” dossier, secured a set of best endeavour promises concerning preferential rules of origin for exporting to industrialised countries, preferential treatment to services and services suppliers of least developed countries, duty-free and quota-free market access for least-developed countries, and a final monitoring mechanism for special and differential treatment flexibilities.

The TFA has witnessed perceptible progress since the Bali meeting, while other issues raised by developing and poor countries have taken a back seat at the WTO.  The mismatch, in terms of progress, between the TFA on one side, and lack of credible movement in agriculture and development on the other, especially in arriving at a permanent solution for public stockholding programmes, has come into the open at various meeting in Africa and elsewhere.

“Even seven months after Bali, we do not have the required confidence and trust that there will be constructive engagement on issues that impact the livelihood of a very significant part of the global population,” Indian Ambassador Anjali Prasadtold WTO’s General Council, which is the organisation’s highest decision-making body, during the ministerial meetings, on Friday.

Prasad said “the Trade Facilitation Agreement must be implemented on as part of a single undertaking including the permanent solution on food security.” Bolivia, Cuba and Venezuela took the same stand as India that all issues in the Bali package have to be implemented on the same and equal footing.

“Nothing is agreed until everything is agreed in the Bali package,” India’s trade minister Nirmala Sitaraman told the Financial Times last Friday.

Against this backdrop, India finally pulled the plug at the General Council meeting by saying that “the adoption of the trade facilitation protocol be postponed until a permanent solution on public stockholding for food security is found.”

Without the protocol, it is difficult to undertake rapid liberalisation of customs procedures as set out in the TFA.  Effectively, the Indian stand has put paid to an early adoption of the trade facilitation protocol.

“Today, we are extremely discouraged that a small handful of Members in this organization [WTO] are ready to walk away from their commitments at Bali, to kill the Bali agreement, to kill the power of that good faith and goodwill we all shared, to flip the lights in this building back to dark,” Deputy U.S. Trade Representative Ambassador Michael Punke lamented at the General Council meeting.

Trade envoys from Japan, the European Union and a group of 25 industrialised and developing countries slammed India for its move to oppose the TFA until all other issues, particularly, the permanent solution on food security, are resolved.

“But the TFA cannot be divorced from the other issues, including food security, which need to be converted into a binding agreements on a priority basis,” India’s former trade envoy Ambassador Jayant Dasgupta told IPS Saturday.

Dasgupta, who played a major role in providing the rationale for exempting public distribution programmes for food security from WTO disciplines, offered several reasons why food security must trump over the hard core mercantile trade agenda embodying the TFA.

First, he said, ” the debate on food security exposed the insensitivity of trade negotiators of some major industrialised countries (pushed by seven or eight transnational corporations that dominate global food trade) to address food security issues, arising out of static interpretations of trade rules framed many decades ago, when such problems were not conceived.”

Second, the objections raised by the United States, Canada and Australia in addressing food security  are unacceptable because they do not want to concede that there has been more than 650 percent inflation in India since 1986-88.

The WTO agreement on agriculture uses the references prices of 1986-88 for determining domestic support commitments. “Any economist worth his salt would be aghast at the idea that the calculation of subsidies should take place without reference to the current market prices but to market prices which existed twenty six to twenty eight years,” the former Indian trade official argued.

Third, the problem of public procurement and stockholding for food security purposes is resorted to by not only India, but China, Indonesia, Philippines, Pakistan, Egypt, Jordan, Nigeria, Kenya and many other developing countries.

“Because of the way the agreement on agriculture provisions is worded, most of these developing countries could be held to be in violation of the WTO rules,” said Dasgupta, pointing out that “India is articulating not only its own problems but also those of other developing countries.”

And fourth, “by seeking to push India into a corner on this extremely sensitive issue for many developing countries, the United States and its handful of supporters are seriously jeopardising the credibility of the WTO in terms of latter’s ability to correct its mistakes and to be sensitive to the needs of a majority of its developing members.”

Framing rules at the World Trade Organization for maintaining public stockholding programmes for food security in developing countries is not an easy task, and for Ambassador Jayant Dasgupta, former Indian trade envoy to the WTO, “this is even more so when countries refuse to acknowledge the real problem and hide behind legal texts and interpretations in a slanted way to suit their interests.”

“The major problem is that the WTO’s Agreement on Agriculture (AOA) was negotiated in early 1990s and there are many issues which were not taken into account then,” says Ambassador Dasgupta, who played a prominent role in articulating the developing countries’ position on food security in the run-up to the WTO’s ninth ministerial meeting in Bali, Indonesia, last year.

“If the WTO has to carry on as an institution catering for international trade and its member states, especially the developing and least-developed countries, the rules have to be modified to ensure food security and livelihood security for hundreds of millions of poor farmers,” Ambassador Dasgupta told IPS Thursday.

Ironically, the rich countries – which continue to provide tens of billions of dollars for subsidies to their farmers – are insisting on inflexible disciplines for public stockholding programmes in the developing world.“Credible disciplines for food security are vital for the survival of poor farmers in the developing countries who cannot be left to the vagaries of market forces and extortion by middlemen” – Ambassador Jayant Dasgupta, former Indian trade envoy to the WTO

The United States, a major subsidiser of farm programmes in the world and charged for distorting global cotton trade by the WTO’s Appellate Body, has called for a thorough review of farm policies of  developing countries seeking a permanent solution for public stockholding programmes to address food security.

“Food security is an enormously complex topic affected by a number of policies, including trade distorting domestic support, export subsidies, export restrictions, and high tariffs,” says a United States proposal circulated at the WTO on July 14.

“These policies [in the developing countries],” continues the proposal, “can impede the food security of food insecure peoples throughout the world.” The United States insists that food security policies must be consistent with the rules framed in the Uruguay Round of trade negotiations that came into effect in 1995.

“Public stockholding is only one tool used to address food security, and disciplines regarding its application are already addressed in the Agreement on Agriculture,” the United States maintains.

The agriculture agreement of the trade body was largely based on the understandings reached between the two largest subsidisers – the European Union and the United States – which culminated in what is called the Blair House Agreement in 1992. The major subsidisers were provided a “peace clause” for ten years (1995-2005) from facing any challenges to their farm subsidy programmes at the WTO.

The AOA also includes complex rules regarding how its members, especially industrialised countries, must reduce their most-distorting farm subsidies.

In the face of increased legal challenges at the WTO and also demands raised for steep cuts in subsidies during the current Doha trade negotiations, several industrialised countries shifted their subsidies from what are called most trade-distorting “amber box” measures to “green box” payments which are exempted from disputes. Jacques Berthelot, a French civil society activist, says that the United States has placed some of its illegal subsidies into the green box.

When it comes to disciplines on food security, however, the United States says it is important to ensure that “[food security] programmes do not distort trade or adversely affect the food security of other members.”  The United States has suggested several “elements” for a Work Programme on food security, including the issue of public stockholding programmes, for arriving at a permanent solution. Washington wants a thorough review of how countries have implemented food security in developing countries.

The U.S. proposal, says a South American farm trade official, is aimed at “frustrating” the developing countries from arriving at a simple and effective solution that would enable them to continue their public stockholding programmes without many hurdles. “The United States is interested in preserving the Uruguay Round rules but not address the issues raised by the developing countries in the Doha Round of trade negotiations that seek to address concerns raised by developing countries,” the official adds.

The G-33 group – with over 45 developing and least-developed countries – has brought the food security issue to the centre-stage at the WTO. Over the last two years, the G-33, led by Indonesia with China, India, Pakistan, the Philippines, Kenya, Nigeria, Zimbabwe, Bolivia, Cuba and Peru among others, has called for updating the external reference price based on 1986-88 prices to ensure that they can continue with their public stockholding programmes under what is called de minimis support for developing countries.

Following the G-33’s insistence on a solution for public stockholding programmes for food security, which became a make-or-break issue at the WTO’s Bali ministerial meeting, trade ministers had agreed on a decision “with the aim of making recommendations for a permanent solution.” The ministers directed their negotiators to arrive at a solution in four years.

Over the last six months, there has been little progress in addressing the core issues in the Bali package raised by developing countries, including food security. “We are deeply concerned that the Ministerial Decision on Public Stockholding for Food Security Purposes is getting side-lined,“ India told members at the WTO on July 2.

“In this and other areas, instead of engaging in meaningful discussion, certain members have been attempting to divert attention to the policies and programmes of selected developing country members,” says New Delhi, emphasising that “the issues raised are in no way relevant to the core mandate that we have been provided in the Bali Decisions.”

At a time when the industrialised countries want rapid implementation of the complex agreement on trade facilitation, their continued stonewalling tactics on the issues raised by developing countries has created serious doubts whether food security issue will be addressed in a meaningful manner at all.

“Credible disciplines for food security are vital for the survival of poor farmers in the developing countries who cannot be left to the vagaries of market forces and extortion by middlemen,” says Ambassador Dasgupta. “The delay in addressing food security will pose problems for millions of people below poverty who are dependent on public distribution programmes.”