WTO Trade Negotiations Are Stalled

The New York Times
December 7, 2002,

Global Trade Negotiations Are Making Little Progress

By ELIZABETH OLSON

WASHINGTON,
The new round of global trade negotiations, begun with great fanfare at
Doha, Qatar, early this year, has bogged down, and trade diplomats are
beginning to despair of making enough progress to justify holding an
important interim conference scheduled for Cancun, Mexico, next year.
The deadline of January 2005 for completing the whole round of talks is also
in danger of slipping.

The point of the Cancun meeting is to avoid repeating the debacle of the
World Trade Organization's Seattle conference in 1999, when diplomats
inside the meeting wrangled fruitlessly over irreconcilable positions
and agendas while antiglobalization demonstrators swarmed the streets
outside.

This time, many of the organization's 144 member nations want the hard
negotiating to be done ahead of time and the conference to be a
harmonious ratification of the progress that has been made. But over a
three-day stock-taking this week at the group's headquarters in Geneva,
trade envoys found precious little progress, only deep divisions and stalled
talks.

Chief among the issues in deadlock is one that was not even on the official
agenda for the Doha round: access to patented medicines for poor countries.
The issue has eclipsed even agricultural trade, the one that trade experts
expected to be the most intractable in the talks.

Most trade matters are obscure and technical, but they can have important
connections to highly charged emotional issues. The trade organization
has found itself squirming uncomfortably in the spotlight when the effects
of trade treaties on environmental safeguards or the treatment of workers
have been spotlighted. Now, the question of whether developing countries
have the right to override foreign patent protections for essential medicines
has become such an issue, in part because it has been cast in moral
terms.

"The public has a position on this issue: poor people need those drugs,"
said Sergio Marchi, Canada's chief trade negotiator in Geneva. "The need
isto deliver affordable drugs in the most efficient way to the poorest of
the poor. If we don't resolve this, the W.T.O. will be judged very harshly."

At the Doha meeting, the organization's members pledged to resolve the
issue by Dec. 31. But the negotiations have floundered in recent weeks.

Trade negotiators say that at a meeting in Sydney, Australia, before the
American midterm elections, a compromise seemed to be near. But "there
has been some hardening of positions" since then, the European Union's trade
envoy, Carlos Trojan, said this week in a telephone interview from
Geneva.

"U.S. officials seem to have the whole American pharmaceutical industry
on their back," he said. The drug companies say that allowing international
trade in unlicensed copies of their drugs made in India, Brazil or other
developing countries would be devastating to the world patent system,
chill research on new drugs and flood the world with medicines of dubious
quality. But poor countries without a drug industry of their own say
that banning such trade denies them badly needed medicines that they cannot
afford to buy at developed-world prices.

The most the United States has so far offered in talks on the issue is a
narrow exemption for drugs that treat three diseases: AIDS, malaria and
tuberculosis.

"Some countries want this to apply not just to epidemics, but to any health
problem, and that makes the pharmaceutical industry mad," said a United
States trade official involved in the negotiations who did not want his
name used. That includes some secondary patents -- patents requested
after a drug's use is better known -- for medicines like Viagra, which are
not needed for a health crisis, he said.

Poorer countries want drugs for many more diseases added to the list.

"You can read the Doha declaration," said Brazil's trade envoy, Luis Felipe
de Seixas Correa, in Geneva. "It is very clear that it included those three
diseases but, at the same time, it did not exclude other diseases. We
insist that it be fulfilled in its entirety."

The fight over pharmaceuticals is symptomatic of the uneasy standoff
between developing countries, which make up the bulk of the trade
organization's membership, and the giant economies of the United States
and the European Union. Relations have been strained for much of the
organization's seven-year existence, because the developing countries
say they believe that they were short-changed in the last global round of
talks, which ended in 1994.

The developing countries want more time to meet commitments they made
in that round, including cracking down on copyright and patent infringement.
But little or no progress has been made on these implementation issues,
as they are known.

The agricultural talks, too, are stuck, mainly over reluctance in Europe
and the United States to reduce subsidies and lift trade barriers. The
European Union has yet to submit its proposals on the question, a
failure that some diplomats say makes it unlikely that the organization will be
able to agree on a framework for talks on the issue by the March 2003
deadline.

Some experts think Europe is stalling to keep its political options open.
"There is concern that there will be no written plan," said Sophia
Murphy, trade policy director for the Institute for Agriculture and Trade
Policy, which is based in Minneapolis. Still, Mr. Trojan promised a plan
"soon."

For its part, the United States, which irritated many trade partners last
year with a huge new farm-subsidy bill and a protective tariff on steel
imports, has been making a number of proposals, including cutting
tariffs on farm goods in half and eliminating export subsidies.

Late last month, the Bush administration also proposed gradual
elimination of tariffs on all manufactured goods, including two of the most
protected categories, shoes and textiles, but the European Union dismissed
it as unrealistic.

Brinkmanship is common in trade talks, with logjams building up for
months that are only broken by last-minute concessions and deals. But the
lesson many members drew from Seattle is the danger of leaving too many messes
to be tidied up at the 11th hour.

"I saw the beach the day before the talks in Doha," Mr. Trojan said. But
with all the work left to do before the Cancun meeting, he said, "we'll
be locked up for at least 10 days, or longer."
http://www.nytimes.com

GRAPHIC: Photo: Demonstrators pulled down a fence surrounding the site
of a World Trade Organization meeting last month in Sydney, Australia. The
organization is stalled over access to patented drugs by poorer
countries.
(Associated Press)