M Forere, lecturer - UKZN

 Tariffs imposed on imports – trade barriers  Article I of GATT – Most Favored Nation (MFN)  Article II of GATS - MFN  Article V of GATS allows exception to non- discrimination and MFN - FTAs  Article XXIV of GATT: exception to MFN – allows free trade areas

 XXIV (4): The contracting parties recognize the desirability of increasing freedom of trade by the development, through voluntary agreements, of closer integration between the economies of the countries parties to such agreements…  Article XXIV (5): Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of a customs union or of a free-trade area or the adoption of an interim agreement necessary for the formation of a customs union or of a free- trade area.

 “States have to ensure that the trade rules and policies they select are consistent with their legal obligations in relation to the right to health.” Prof. Paul Hunt – 1 st Spec Rap on the Right to Health – report in his mission to the WTO in 2004  “If the FTA has negative impact on the right to health for the poor & vulnerable, state has an obligation under international human rights law to revise those terms.” (ibid)

1. Impact on government revenue  FTA removes tariff – govmt revenue for developing countries and LDCs  E.g. EU products make 40% of sub-Saharan Africa imports – FTA with EU will cut governments revenue substantially  Such revenue loss compels governments to cut on public spending, e.g, on health  Revenue loss also compels governments to privatize public services such as health  Result: no access to health for poor people

2. Trade in Health and Health related services  Health is one of the fastest growing economy in the world economy – BIG PHARMA  In developing countries, it is also a growing economy – middle class & medical aids  Trade in Health would allow the BIG PHARMA to have access to health services in developing countries – leading to privatisation  The privatisation of health sector detrimental to those who cannot afford to pay for health services

3. Stronger IP Rights – TRIPS PLUS  recap: Stronger IPRs cause prices to sky- rocket  High medical prices limit access to health - governments do not afford treatment for everyone

 Free Trade Area of the Americas (dead 2005)  CAFTA (post-ratification/implementation pressures)  Southern African Customs Union (suspended 2006) ◦ Botswana, Lesotho, Namibia, South Africa and Swaziland  U.S. bilateral Free Trade Agreements ◦ Jordan, Chile, Morocco, Singapore, Oman, Bahrain, Peru ◦ Thailand and Malaysia (suspended) ◦ S. Korea, Columbia, Panama (pending)  Trade Promotion Authority (Fast-Track) expired June 30, 2007

 Also seek TRIPS-plus provisions: ◦ Patent term extensions ◦ Data exclusivity up to 10 years plus 1 more ◦ Enhanced enforcement/anti-counterfeiting measures – Financing of Ugandan Counterfeit Goods Bill

 Japan and EFTA (Iceland, Liechtenstein, Norway, and Switzerland) also seek TRIPS- plus IPRs.  Bilateral investment treaties (BITS)  There are also South/South and regional trade agreements where more powerful parties might seek unfair trade terms; not much evidence yet of seeking higher IPRs.  Some developing countries have vowed to avoid IPR+ FTAs (India/Brazil/S. Africa), but it is uncertain whether promises will last.

 How do other countries and IP right holders benefit from bilateral and regional trade agreements?  Art. 4: most-favored-nation treatment.

 U.S. Special 301 List  Generalized System of Preferences  WTO Accession

 Countries may have agreed to adopt TRIPS in part to avoid unilateral trade sanctions imposed by the US (11 sanction actions against 7 countries prior to TRIPS)  US used unilateral carrots and sticks during WTO TRIPS negotiations  Unilateral pressures continue post-TRIPS

 Annual USTR "Special 301" Report details "the adequacy and effectiveness of intellectual property protection“ worldwide.  Reports include information on WTO disputes, "out-of-cycle reviews,” and countries placed on the “Priority Foreign Country,” "Priority Watch List" or regular "Watch list."  Major IP industry file their own 301 submissions  US National Trade Estimate Report on Foreign Trade Barriers also surveys "significant foreign barriers to U.S. exports."

 Watch List countries are contacted and usually promise to investigate  Priority Watch List countries are contacted with precise complaints and objectives  Priority Foreign Countries are notified re most onerous and egregious polices; failure to make progress can result in trade sanctions  Paradoxically, US has to use WTO for TRIPS violations but can act unilaterally re TRIPS+

 The U.S. creates trade pressure by offering and threatening to withdraw special (non- tariff) trade preferences.  In 1987, the U.S. imposed 100% tariffs (trade sanctions) against several Brazilian industries because Brazil had not “modernized” its intellectual property law.  The U.S. in 1998 temporarily withheld trade preferences on four classes of products in S. Africa.

 U.S. can add pressure and make demands for TRIPS-plus IPR provisions in WTO accession negotiations ◦ Cambodia – data exclusivity ◦ China – six year of data exclusivity