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The WTO Dispute Settlement Understanding: An Unlikely Weapon in the Fight Against AIDS

Published online by Cambridge University Press:  24 February 2021

Andrea M. Curti
Andrea M. Curti*
Affiliation:
Boston University School of Law, Fletcher School of Law and Diplomacy, Tufts University, Georgetown University
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Extract

One of the most controversial aspects of the World Trade Organization (WTO) is its trade policy governing pharmaceutical products that treat AIDS and other diseases. Critics contend that the WTO unreasonably restricts the trade of pharmaceuticals in order to protect the profit margin of western drug producers at the expense of infected populations in developing countries. Supporters of the WTO's trade policy argue that protecting the intellectual property (IP) rights of pharmaceutical products is essential to providing an incentive for further drug research and development.

Type
Notes and Comments
Information
American Journal of Law & Medicine , Volume 27 , Issue 4 , 2001 , pp. 469 - 485
Copyright
Copyright © American Society of Law, Medicine and Ethics and Boston University 2020

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References

1 See generally Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15,1994, Legal Instruments—Results OF the Uruguay Round vol. 1 (1994), 33 I.L.M. 1125 (1994) [hereinafter WTO Agreement]. This issue came to the fore in October 2001, when the United States negotiated with Bayer to lower prices for the patented drug Cipro, which is used to treat anthrax. Canada suspended Cipro’s patent altogether. See Keith Bradsher, Bayer Agrees to Charge Government Lower Price for Anthrax Medicine, N.Y. Times, Oct. 24, 2001, at Al. The United States’ policy on drug patents also shifted noticeably at the November 2001 trade talks in Doha, Qatar, when U.S. Trade Representative Robert Zoellick softened the United States' stance on drug patents. This helped countries reach an understanding that will help increase access to generic forms of drugs. See Joseph Kahn, Nations Back Freer Trade, Hoping to Aid Global Growth, N.Y. Times, Nov. 15, 2001, at A12.

2 See, e.g., Oxfam, Patent Injustice: How World Trade Rules Threaten the Health of Poor People (2001), available at http://www.oxfam.org.uk/cutthecost/indepth.html.

3 See, e.g., Singham, Shanker A., Competition Policy and the Stimulation of Innovation: TRIPS and the Interface Between Competition and Patent Protection in the Pharmaceutical Industry, 26 Brook. J. Int’l L. 363, 363-64 (2000)Google Scholar.

4 Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, WTO Agreement, Annex 1C, Legal Instruments—Results of the Uruguay Round vol. 31; 33 I.L.M. 81 (1994) [hereinafter TRIPS Agreement].

5 World Trade Organization Secretariat, Canada—Patent Protection of Pharmaceutical Products, WT/DS114/R (Mar. 17, 2000) [hereinafter Panel Report on Canada].

6 See id.

7 See Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, WTO Agreement, Annex 2, Legal instruments—Results of the Uruguay round vol. 31;

33 I.L.M. 112 (1994) [hereinafter Dispute Settlement Understanding].

8 See Assoc. Press, Discarded AIDS medication a priceless gift in Haiti, BOSTON GLOBE, Nov. 24, 2000, at B13 (citing a World Health Organization estimate that ninety-five percent of the more than thirty-three million people infected with HIV and AIDS are in developing nations).

9 Gordimer, Nadine, Refusing to ‘Live with AIDS’, N.Y. Times, Dec. 1, 2000Google Scholar, at A31.

10 See generally Agreement on the Application of Sanitary and Phytosanitary Measures, General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-l 1, T.I.A.S. 1700, 55 U.N.T.S. 194 [hereinafter SPS Agreement].

11 See id.

12 Id. art. 2.

13 See Cheek, Mamey L., The Limits of Informal Regulatory Cooperation in International Affairs: A Review of the Global Intellectual Property Regime, 33 GEO. Wash. Int’l L. Rev. 211, 287 (2001)Google Scholar.

14 See General Agreement on Tariffs and Trade 1947, Apr. 15, 1994, WTO Agreement, Annex 1A, art. XX(d), Legal Instruments—Results of the Uruguay Round vol. 31; 33 I.L.M. 81 (1994) (allowing contracting parties to restrict trade in order to protect intellectual property rights) [hereinafter GATT].

15 See generally Saylor, Lynne & Beton, John, Why the TRIPS Agreement? in Intellectual Property & International Trade: A Guide to the Uruguay Round Trips Agreement 12, 12 13 (1996)Google Scholar (discussing the evolution of the TRIPS Agreement). See also Marco C. E. J. Bronckers, A Cross Section of WTO Law 186 (2000).

16 See genet ally TRIPS Agreement.

17 See Weissman, Robert, A Long, Strange TRIPS: The Pharmaceutical Industry Drive to Harmonize Global Intellectual Properly Rules, and the Remaining WTO Legal Alternatives Available to Third World Countries, 17 U. Pa. J. INT’L ECON. L. 1069, 1069 (1996)Google Scholar (discussing the irony that the TRIPS restrictions exist within a multilateral treaty that aims to reduce trade barriers).

18 See TRIPS Agreement art. 1.1.

19 See GATT, annex 1A.

20 See Saylor & Beton, supra note 15, at 12 (discussing the United States’ need for IP protection).

21 See id.

22 See id. at 13.

23 See id.

24 See discussion infra Part III.A.

25 See Bronckers, supra note 15, at 190-202 (outlining WTO accession rules).

26 Id. at 191. WTO members categorize themselves as a developed or developing country, although placement in the least developed category must be made by GATT and may be influenced by the U.N. list and other considerations. See id. at 194-99. For a discussion of the implications of selfcategorization, see id. at 199-201 (suggesting that the WTO would benefit from legal certainty in its categorization process, and suggesting that the WTO generate a list of which countries may take advantage of the transitional arrangement). For a list of least developed countries according to U.N. classification, see id. at 193.

27 See Bronckers, supra note 15, at 191.

28 See TRIPS Agreement art. 66.1. Developed countries must comply within one year. Id. art. 65.1.

29 Id. art. 65.2.

30 See id. art. 65.5.

31 See Bronckers, supra note 15, at 191.

32 See TRIPS Agreement art. 66.1. The MFN principle states that WTO members must grant the same terms of trade to all other WTO members. See GATT art. III. The national treatment principle stipulates that WTO members cannot discriminate between domestic goods and like domestic imports. See id.

34 See id.

35 Id.

36 See id.

37 Id.

38 TRIPS Agreement art. 70.9. See also BRONCKERS, supra note 15, at 192.

39 See Bronckers, supra note 15, at 196.

40 See TRIPS Agreement art. 65.2. Developed countries have only a one-year transitional period. Id. art. 65.1.

41 See Bronckers, supra note 15, at 196.

42 See TRIPS Agreement art. 65.5.

43 See id. art. 65.1, 65.2.

44 See generally Dispute Settlement Understanding.

45 See id. art. 3.7.

46 Yong-d’Hervé, Daphne, Implementation and Administration of TRIPS and Dispute Settlement, in Intellectual Property & International Trade: A Guide to the Uruguay Round Trips Agreement 72, 77 (1996)Google Scholar.

47 See Dispute Settlement Understanding art. 2.1.

48 Id. art. 4.2.

49 See id. art. 4.11.

50 See id. art. 4.7.

51 Id. art. 8.

52 Id. art. 10.

53 Id. art. 17.

54 Id.

55 See id.

56 See Yong-d’Herve, supra note 46, at 77.

57 Dispute Settlement Understanding art. 21.

58 Id. art. 21.3.

59 See id. art. 21.3(c).

60 Id. art. 22.1.

61 Id. art. 22.2.

62 Id. art. 25.

63 Id. art. 25.2.

64 Id. art. 25.3.

65 Id. art. 25.4.

66 See Bronckers, supra note 15, at 211 (noting that the United States uses Section 301 of the 1974 Trade Act, and the European Union uses Regulation 2641/84, 1984 O.J. (L252) 1 as a tool of foreign policy to these ends).

67 See Dispute Settlement Understanding art. 23.

68 See discussion supra Part II.D.

69 See Bronckers, supra note 15 (citing specifically Dispute Settlement Understanding arts. 12.11,4.10, 8.10& 12.10).

70 All decisions are published on the WTO website; see http://www.wto.org/english/tratop_e/dispu_e/distab_e.htm (last visited Oct. 3, 2001).

71 Assoc. Press, supra note 8, at B13.

72 See Swarns, Rachel L., AIDS Drug Battle Deepens in Africa, N.Y. Times, Mar. 8, 2001Google Scholar, at Al.

73 See Assoc. Press, supra note 8, at B13.

74 See Melody Petersen & Donald G. McNeil, Jr., Maker Yielding Patent in Africa for AIDS Drug, N.Y. Times, Mar. 15, 2001, at Al.

75 See generally Sweeney, Rosemary, The U.S. Push for Worldwide Patent Protection for Drugs Meets the AIDS Crisis in Thailand: A Devastating Collision, 9 PAC. RIM L. & POL’Y J. 445, 446 (2000)Google Scholar

76 See id.

77 See id. at 446-47.

78 See id. at 451.

79 See id. at 458.

80 See id.

81 See Trade Act of 1974, Pub. L. No. 93-618, §§ 301-302, 88 Stat. 1978, 2041 (1975). See also Sweeney, supra note 75, at 459-60; Bronckers, supra note 15, at 211.

82 See Sweeney, supra note 75, at 458.

83 See Sheryl Gay Stolberg, Africa's AIDS War, N.Y. Times, Mar. 20, 2001, at A4.

84 See Swarns, supra note 72.

85 Donald G. McNeil, Jr., Selling Cheap ‘Generic ’ Drugs, India‘s Copycats Irk Industry, N.Y. Times, Dec. 1, 2000, at Al.

86 See id.

87 See id.

88 See id.

89 See Tina Rosenberg, Look at Brazil, N.Y. Times Mag., Jan. 28, 2001, at 58.

90 See Swarns, supra note 72, at Al.

91 See Ford, Sara M., Compulsory Licensing Provisions under the TRIPS Agreement: Balancing Pills and Patients, 15 Am. U. INT’L L. Rev. 941, 952 (2000)Google Scholar (suggesting that South Africa institute a compulsory licensing scheme to deal with its AIDS epidemic).

92 See Rosenberg, supra note 89, at 52.

93 See Swarns, Rachel L., Drug Makers Drop South Africa Suit Over AIDS Medicine, N.Y. Times, Apr. 20, 2001Google Scholar, at Al.

94 See id.

95 See Swarns, supra note 72.

96 See Stolberg, Sheryl Gay, Africa's AIDS War: Pressure for Affordable Medicine: ‘If’ Becomes ‘When’for Patients, N.Y. Times, Mar. 10, 2001Google Scholar, at Al.

97 See Petersen & McNeil, supra note 74, at Al.

98 See Swarns, supra note 93.

99 See Petersen & McNeil, supra note 74, at Al.

100 See McNeil, supra note 85, at Al.

101 See id.

102 Id.

103 See id.

104 See discussion supra Part II.C for a description of the concessions made to developing countries that join the WTO.

105 See McNeil, supra note 85.

106 See id.

107 See id.

108 See Appellate Body Report, India—Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R (Dec. 19, 1997) [hereinafter Appellate Body Report on India]; Report of the Panel, India—Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS79/R (Aug. 24, 1998) [hereinafter Panel Report on India (E.C.)]. In brief, Article 70.8 requires India to (a) provide a means by which patent applications can be filed; (b) apply the criteria of patentability to the applications; and (c) provide patent protection to applications that meet the criteria in part (b). Article 70.9 requires India to grant exclusive marketing rights to products that are the subject of another WTO member’s patent application. See TRIPS Agreement art. 70.

109 See Appellate Body Report on India, at 33-34.

110 See Panel Report on India (E.C.), at 73.

111 Id. (“[T]he Panel’s findings do not in any way foreshorten the transition period of until, at the latest, 1 January 2005 that India has for meeting its obligations under [the TRIPS Agreement].”).

112 See Weissman, supra note 17, at 1112 (discussing four provisions in the TRIPS Agreement that would allow for public health licenses).

113 See Panel Report on Canada. Canada successfully argued that a provision in its Patent Law qualified under the TRIPS Agreement Article 30 exception to patent protection. See discussion infra Part IV.A.

114 TRIPS Agreement art. 30.

115 See Panel Report on Canada.

116 See Panel Report on India (E.C.), at 60-61. The Panel stated:

It can thus be concluded that panels are not bound by previous decisions of panels or the Appellate Body even if the subject-matter is the same.…However, in the course of [settlement procedures], we will take into account the conclusions and reasoning in the Panel and Appellate Body reports.…Moreover … we should give significant weight to…the DSU, which stresses the role of the WTO dispute settlement system in providing security and predictability to the multilateral trading system, and to the need to avoid inconsistent rulings ….

Id.

117 See Panel Report on Canada, at 169.

118 See id. at 16.

119 Id. at 2.

120 See id. at 16-25.

121 Id.

122 Id. at 146. According to the Panel’s findings, the regulatory review process can take from one to two-and-a-half years to complete. Id. at 4.

123 Id. at 171, 174.

124 TRIPS Agreement art. 27.1.

125 Id. art. 28.1.

126 Panel Report on Canada, at 151

127 Panel Report on Canada, at 152

128 TRIPS Agreement art. 30.

129 Panel Report on Canada, at 158

130 Id. (emphasis added).

131 131 See id. at 174.

132 Id. at 2.

133 Id. at 9.

134 Id. at 16.

135 See id. at 174.

136 Id. at 156.

137 See id.

138 See id.

139 See id. at 156.

140 TRIPS Agreement art. 30.

141 See Panel Report on Canada, at 161.

142 See id.

143 Id. at 131.

144 See id.

145 See McNeil, supra note 85.

146 See Ford, supra note 91, at 945.

147 See Panel Report on Canada, at 13.

148 See Weissman, supra note 17, at 1111

149 See id.

150 TRIPS Agreement art. 30.

151 See Panel Report on Canada, at 24.

152 See Panel Report on Canada, at 153.

153 XRIPS Agreement art. 7 (emphasis added)

154 See Panel Report on Canada, at 153.

155 TRIPS Agreement art. 8.

156 See Panel Report on Canada, at 153.

157 See id. at 154.

158 Panel Report on Canada, at 24-25.

159 TRIPS Agreement art. 30.

160 Id. at 164.

161 Id. at 9, 16.

162 jd. at 165.

163 TRIPS Agreement art. 8, as discussed supra Part IV.A.2

164 Id.

165 Id.

166 TRIPS Agreement, preamble.

167 Id. at 156.

168 Id. at 161.

169 Id.

170 See Swarns, supra note 72, at A6.

171 See Crossette, Barbara, Poor African Countries Lack Ways to Monitor Use of New AIDS Drugs, Experts Warn, N.Y. Times, Apr. 1, 2001Google Scholar, at A8.

172 Id.

173 See id.

174 Stolberg, supra note 96, at A4. Uwe Reinhardt, a healthcare economist at Princeton University, noted that “Africa is not known for benign, democratic leaders, let’s be honest,” and said that companies do not want “some potentate grabbing these drugs and reselling them within Africa for $25 a dose.” Id.

175 See McNeil, supra note 85.

176 See Ford, supra note 91, at 968.

177 See Id.