PATENTED CONFUSION 

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By BY DIPAK R. BASU
  • Published 30.05.02
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After the November 2001 ministerial meet of the World Trade Organization at Doha, where the opposition from developing countries like India was all but neutralized, another round of negotiations has begun with the ministerial level trade conference of central Asian and Caucasian countries at Tbilisi, Georgia from May 21-22. In theory, the WTO operates by consensus and all its 142 member countries, including 37 African states, have the right to participate in negotiations affecting them. In practice, however, key decisions are arrived at in smaller informal meetings between representatives of rich countries and sometimes a few key developing countries. Often poorer countries go unrepresented even at open meetings because they do not have enough personnel to send to the numerous, and often simultaneously held, meetings. If a country is not present or does not speak up at meetings, it is taken as supportive of the "consensus" position. Even when there is vocal dissent, developing countries' concerns are often excluded from the statements. Take the example of patent rights that were discussed at Doha, as they have been at every meet. In 1994, the WTO's trade related intellectual property rights agreement directed member countries to amend their laws in order to maximize the rights of patent holders. Of the many such holders of patents are multinational pharmaceutical companies who help keep drug prices up by virtue of the patents that give them temporary monopoly in the market. The "unequal" agreement of the Uruguay round in 1994 assured such commercial interests. TRIPS gives countries the option to use generic alternatives for patented drugs in emergencies, as the United States of America threatened to do recently to bring down the price of the patented drug, Capra. But exercising this option requires strong political will, economic clout and high-powered lawyers to stand up to pressures from drug makers and their home governments. Developing countries had proposed a statement at Doha to the effect that "nothing in the TRIPS agreement shall prevent members from taking measures to protect public health." But the US, Switzerland and other rich nations opposed this. Instead, they proposed a somewhat different language: "We affirm the member's ability to use...the provisions in the TRIPS agreement which provide flexibility to address public health crises such as HIV/AIDS and other pandemics...in particular to secure affordable access to medicine." This might sound similar but, analysed legally, it means little change in the status quo for the developed countries and their companies. Rich countries have offered to change the deadline for patent law compliance by "least developed countries" from 2006 to 2016. But this excludes deve- loping countries like Brazil and India which have the capacity to produce and export generic drugs. The World Bank estimates that "full" trade liberalization could add between $ 200 billion and $ 500 billion to developing countries' income. But actually rich countries take advantage of the openings they force in markets in developing countries while they steadfastly guard their own markets. This is particularly true in the case of agriculture. Farmers' subsidies in the US, Europe and Japan have gone up to almost $ 1 billion a day - more than six times what these countries provide in development assistance. Together with tariffs and quotas, these make it difficult for poorer countries to compete in developed countries' markets. Worse, agricultural exports from rich countries drive small farmers out of business in poorer countries, threatening domestic food security as well as undermining export potential. The Uruguay round of trade negotiations had promised greater access to markets in rich countries for third world exports. This has not happened. The Doha declaration only mentioned abolition of export subsidies but said very little about tariff and non-tariff barriers on imports, production subsidies and price-supports in developed countries that lead to unfair trade advantages. Developing countries wanted a re-evaluation of existing agreements before starting a new series of negotiations, as well as legal and administrative systems to implement trade laws. Some of the 104 "implementation" issues developing countries want to address include anti-dumping barriers in the US, lower industrial tariffs in many developing countries, and rich countries' failure to provide technical assistance to enable developing countries to comply with trade regulations and compete effectively. Poor countries have also resisted the use of intellectual property rights to patent life forms, which threatens their control over genetic stock vital for agricultural production. But instead of addressing these concerns, rich countries have pressed for a new round. The proposed agenda for this round includes extending WTO negotiations to include policies for regulating investment, competition, transparency in government purchasing and trade facilitation. The new round could bring even larger areas of economic life under complex WTO regulations. Yet all previous trade agreements recognize in theory that developing countries have disadvantages that may warrant "special and differential treatment". That is, the countries should be given better market access, greater flexibility in implementing trade laws, and be allowed to sign agreements with developed countries that do not require full "reciprocity". The Uruguay round assumed that such treatment would be temporary, and that developing countries could quickly adopt the general standards after brief transition periods with the aid of technical assistance from rich countries. But the "special and differential treatment" provisions were not made mandatory. Their implementation depended on the political will of the rich countries. Developing countries have demanded that these provisions should be reviewed and made mandatory. But the draft declaration of Doha does include any commitment of this sort. There is only on one point that developing countries may be said to have won: developed countries readily accepted the demand not to include "labour standards" in the new round of talks. But this is no victory because labour standards affect developed countries as well. Thus, developing countries have lost a major weapon to improve their labour standards and to protect their industries from the onslaught of Chinese exports. Since MNCs in some developed countries are deeply involved with Chinese export drives, developed countries are not interested in including "labour standards" in future WTO negotiations. That is because such a thing would harm their own interests too. Witness this. American workers lack the minimal legal protection against layoffs that exist in Japan, most of Europe and in parts of the developing world. The past two decades have seen a lengthening of working hours, stagnating wages and an appalling state of health and safety standards. The US is at the end of the list of 15 industrialized countries in workplace injuries. In the US, 6,000 workers get killed annually, another 50,000 to 60,000 die of work-related diseases and seven million are affected by such diseases on the job each year. The US spends about one dollar per citizen on worker safety programmes. Women workers in the US have no paid maternity leave. There are also a lot of child labourers in farms, in garment factories and at construction sites. There have been reports of slave labour by Thai immigrants in a Los Angeles garment sweat-shop, handicapped Mexican children peddling in New York subways and under-aged farm workers in rural Florida. The US has so far refused to sign the International Labour Organization's convention 138, which bans most labour by children under the age of 18. Workers in the US are also fired regularly for trying to organize and educate themselves about their rights. The most important factor behind the comparative advantage of Chinese goods is the low cost of labour. China has no trade union rights for workers. Chinese workers are treated in a militarist fashion which amounts to serious abuses. Much of the labour force comprises young women who come from villages at the age of 15 or 16 and have to go back by the age of 30 when their efficiency has diminished. If the developing countries want to compete with China and adjust or reform to comply with the kind of labour market flexibility being sought by business communities and their policy-makers, there will not be any human rights for workers even in the organized sectors in those countries. The argument that the ILO can promote better labour standards and thus there is no need for the WTO to interfere is meaningless. The ILO has no teeth. Even Japan has not ratified the ILO's discrimination in employment and occupation convention, 1958, which covers discrimination based on race, nationality and colour. Gender discriminations in the workplace is common in Japan. If the ILO cannot influence Japan or the US, how can it influence labour conditions in China which defies every international treaty? At Doha, developing countries made no objections to the inclusion of "environmental standards" which will lead to increased costs of combatting industrial pollution and will have negative effects on industrial exports from developing countries. Which in effect means that the Doha conference has been a hands down victory for the developed world. Do the developing countries stand a chance in the next round of negotiations that has already ensued?