Toward a New Foreign Policy.

Key Recommendations

* The U.S. should drop its efforts to include TRIPS-plus provisions in the FTAA.

* Because all FTAA negotiating countries are already members of the WTO and are bound by TRIPS, there is no reason to include any intellectual property provisions in the FTAA.

* The U.S. should stop working to expand monopolistic intellectual property rights and begin to explore protections for the public's rights regarding intellectual property.

The FTAA negotiating countries are all members of the World Trade Organization and have already committed themselves to adhere to TRIPS. TRIPS establishes a comprehensive international standard for intellectual property protection, with a heavy tilt toward the interests of intellectual property holders. The only reason to include intellectual property provisions in the FTAA is to force countries to adopt TRIPS-plus obligations--many of which are dangerous and injurious to public health.

Even inclusion in the FTAA of rules identical to the WTO's would be harmful, because if positive changes were achieved in the WTO intellectual property rules, the FTAA countries would still be required to adhere to the old, more restrictive rules. By contrast, if harsher rules were adopted at the WTO, the FTAA countries would be required to adhere to them due to their WTO membership. These overlapping obligations can complicate and sometimes thwart positive reform of international trade rules to enhance public rights.

More than just access to HIV/AIDS medicines is at stake in the FTAA negotiations. People in Latin America and the Caribbean, as well as generally throughout the developing world, are regularly denied access to needed medicines because of price. (Of course, similar problems are not unknown in the U.S.)

Although per capita income is dramatically less in Latin America than in the U.S. or the other rich countries in the Organization of Economic Cooperation and Development (OECD), drug prices in Latin America are comparable to or even higher than those in OECD nations. A pharmaceutical pricing study conducted by Health Action International analyzing more than a dozen frequently prescribed drugs concluded, "The average retail prices of 11 out of 13 dosage forms are higher in Latin America than in the OECD." There are many reasons for these price discrepancies, including the maintenance of price control regimes in many OECD countries and the brand-name companies' differential drug pricing, with higher prices charged in some developing countries where the targeted market is limited to wealthy consumers. The most effective way for Latin American and Caribbean countries to address these pricing problems is through compulsory licensing and promoting generic competition.

It is time for the U.S. to endorse compulsory licensing and to begin to conceptualize ways to expand the public's rights regarding intellectual property. The agreement between the U.S. and the United Kingdom to put basic data about genes in the public domain, rather than allowing this information to be monopolized by private companies, is an example of how public rights can be protected. International agreement is needed in several other areas: to prohibit patents on life forms (the U.S. wants to allow such patents in the FTAA); to guarantee minimum rights for educators, researchers, and others concerning a wide range of "fair use" issues regarding intellectual property for public benefit; to resolve particular difficulties or uncertainties in TRIPS that make compulsory licensing difficult for smaller countries (notably, a requirement that compulsorily licensed products be made primarily for domestic consumption); and to ensure that health and other vital public interests take priority over commercial considerations in the crafting of intellectual property policy.

Washington's foremost challenge is to ensure that no harm is done in intellectual property trade negotiations; this means foregoing intellectual property provisions (especially TRIPS-plus conditions) in the FTAA. Current official U.S. policy is that all health-related concerns regarding intellectual property can be addressed through a "flexible policy," by which the U.S. will review its actions in individual cases to ensure that health is not undermined. But even if it is administered in good faith, such a policy is insufficient on numerous grounds. It does not provide countries with the certainty they need to proceed with compulsory licensing and the promotion of generic competition. It ignores how the very existence of baseline rules tilted against compulsory licensing and access to medicines makes it harder for developing countries to pursue compulsory licensing. Even if the U.S. chooses not to enforce those rules, other countries can still choose to enforce the rules and thus undermine access to generic medicines. And Washington's current flawed policy is based on a very narrow understanding of when legitimate health interests conflict with intellectual property rules.

Finally, provisions of the FTAA outside of the intellectual property sphere pose a series of threats to public health. The services provisions may facilitate the privatization of public health services, and the investment provisions might give corporations standing to sue to block the implementation of environmental and public health regulations or to deny the issuance of compulsory licenses. Protecting public health must be prioritized over commercial interests in these areas as well.

Robert Weissman <[e-mail]> is the editor of Multinational Monitor magazine and a codirector of Essential Action, a corporate accountability group. He is also a co-author of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, ME: Common Courage Press, 1999; see http://www.corporatepredators.org).