Tuesday, 24th December 02

The Financial Times

Sir, The diseased mindset of the US pharmaceuticals industry lobby could well derail one of the crucial development aspects of the Doha round of the World Trade Organisation: the flexibility aspects of trade-related intellectual property rights and public health. It will not only reinforce the comments by sceptics who questioned the word “development” in the Doha agenda but also marshal forces that are inimical to the whole trade liberalisation agenda. That will be bad for both rich and poor in the world.

Supachai Panitchpakdi, WTO director-general (“World trade must not be tripped up by drugs”, December 16) has expressed his deep anxiety about the non-resolution of the issue of access to life-saving medicines by countries without production facilities among other important issues such as special and differential treatment. These are holding up progress in the negotiations at Geneva.

In trying to balance his views, Mr Supachai also argues about the protection of patent rights, without which the billions of dollars required for research will not be forthcoming. This is a flawed argument, because the pharmaceuticals industry invests in research from current revenues, which have been raised from its existing customers, not future ones. Of course it is cyclical – but the industry is not involved in charity.

Turning to fundamental issues, many have argued about the validity of the Trips agreement in the WTO. Protagonists argue that if Trips were not there, the US would walk out of the WTO. So what if it does? Its “ugly American” behaviour causes enough problems anyway, whether at Geneva or out of Washington. For example – and this has not been reported widely – when Iran’s application for observer status at the WTO came up at the general council meeting in October, the US delegate shot it down with words to the effect that the US did not even have to give any reasons for its objection.

As a share of the world trade, in 2001 US imports accounted for 18.3 per cent and exports for 11.9 per cent. On the other hand, the European Union’s share was 36.26 per cent for imports and 37.16 per cent for exports. Not that the EU is incapable of unfair action; but at least it does not throw its weight around in a crass manner. Thus the one of the ways forward for the Doha agenda is to get the Trips out of the WTO and dispatched to the World Intellectual Property Organisation where it belongs.