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20 February 2004 TAC Electronic NewsletterAnnouncements
Contents of this newsletter
Added to the TAC website
Treatment Action Campaign (TAC)/AIDS Law Project (ALP) Memorandum on the United States/Southern African Customs Union Free Trade Agreement Negotiations3 February 2004 Prepared by:Jonathan Berger (Law and Treatment Access Unit,AIDS Law Project) and Njogu Morgan (International Desk, Treatment Action Campaign) Introduction On 4 November 2002, United States Trade Representative (USTR) Robert Zoellick formally notified US Congressional leaders of President Bush's intention to initiate negotiations for a free trade agreement (FTA) with the Southern African Customs Union (SACU), which includes Botswana, Lesotho, Namibia, South Africa and Swaziland. These negotiations are now underway, with the next round scheduled for 23 February 2004 in Namibia. As far as we are able to ascertain, the negotiators plan to conclude their discussions in or around October 2004, with a US-SACU FTA being signed before the end of the year.
The Treatment Action Campaign (TAC) and the AIDS Law Project (ALP) believe that trade between nations, when conducted within the framework of a reasonable and fair set of rules that adheres to the triple-bottom line of environmental, social and commercial sustainability has the potential to act as a tool for attaining developmental priorities. Our support for the ongoing negotiations would therefore be predicated on the agreement strictly adhering to these principles. Yet the US position, as clarified in Mr Zoellick's correspondence with Congress, raises cause for concern.
In his letters to the Speaker of the House of Representatives and the President of the Senate, Mr Zoellick set out reasons for entering into such negotiations, as well as the USTR's "specific objectives for negotiations with the SACU countries".1 In particular, Mr Zoellick raises the following US objectives:
"We plan to use our negotiations with the SACU countries to ? address barriers in these countries to U.S. exports - including high tariffs on certain goods, overly restrictive licensing measures, inadequate protection of intellectual property rights, and restrictions the SACU governments impose that make it difficult for our services firms to do business in these markets. We also see the negotiations as an opportunity to advance U.S. objectives for the multilateral negotiations currently underway in the World Trade Organization (WTO)."2 In our view, a number of the specific objectives identified have the potential to undermine the financing and provision of health care services in SACU countries, both in the public and private health sectors, as well as the rights of people living with HIV/AIDS. In particular, if translated in binding commitments, many of these objectives have the potential to limit the ability of the South African government in discharging its constitutional obligations, primarily in respect of the right of access to health care services. In our view, such undertakings would be an unconstitutional exercise of power.
This memorandum highlights our concerns in respect of two key areas: intellectual property (IP) and trade in services.3 We are equally concerned about two other key areas, namely investment and government procurement. In respect of the former, our concerns are informed largely by the potential for the investment provisions in any FTA to entrench a dispute settlement mechanism entitling investors to sue governments directly. While the other parts of the FTA would only be enforceable as between states, the investment chapter would provide the back door for a pharmaceutical company, for example, to sue a SACU member state for failing to amend its legislation in line with the chapter on IP.
In respect of government procurement, we support a principled approach of transparency that is efficient and swift. Yet we are concerned that rules on procurement may unfairly preclude necessary and urgent action, such as the procurement of essential medicines for dealing with a health emergency, such as a cholera outbreak. We believe that SACU states should not be held hostage to an unwieldy and unnecessary tendering process.
Intellectual property With respect to intellectual property rights, the US government's specific objectives are as follows:
"-- Seek to establish standards that reflect a standard of protection similar to that found in U.S. law and that build on the foundations established in the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPs Agreement) and other international intellectual property agreements, such as the World Intellectual Property Organization Copyright Treaty and Performances and Phonograms Treaty, and the Patent Cooperation Treaty. -- Establish commitments for SACU countries to strengthen significantly their domestic enforcement procedures, such as by ensuring that government agencies may initiate criminal proceedings on their own initiative and seize suspected pirated and counterfeit goods, equipment used to make or transmit these goods, and documentary evidence. Seek to strengthen measures in SACU countries that provide for compensation of right holders for infringements of intellectual property rights and to provide for criminal penalties under the laws of SACU countries that are sufficient to have a deterrent effect on piracy and counterfeiting."
Quite clearly, the US sees the SACU negotiations as an opportunity to extract standards of intellectual property protection in excess of what the Agreement on Trade-Related Aspects of Intellectual Property (or TRIPS) currently requires. This is consistent with its approach to other regional and bilateral trade negotiations. A review of a range of such trade negotiations initiated by the US indicates that it has sought to extract greater concessions than those provided under existing international trade rules, largely to the detriment of developing countries.
To meet "standards of protection similar to that found in U.S. law", SACU nations would be required to adopt a range of TRIPS-plus provisions, including limiting compulsory licenses to national emergencies or to governmental, non-commercial use only. This is clearly is conflict with the Declaration on the TRIPS Agreement and Public Health adopted at the WTO Ministerial Conference at Doha in November 2001, which unambiguously states that "[e]ach Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted".4
Further, SACU members would be required to
bar parallel trade, to extend patent monopolies for administrative
delays, to link drug registration rights to patent
In short, the specific objectives in respect of IP would significantly undermine the ability of SACU member states' to make use of the regulatory flexibilities and public health safeguards identified in the Doha Declaration. If implemented, the negotiating objectives would severely limit access to essential medicines used in the prevention and treatment of a range of health conditions, including but not limited to HIV/AIDS.5
In addition, by seeking to impose TRIPS-plus
provisions on SACU members, the USTR would be violating the principal
negotiating objectives in the US Trade Act of 2002, which require
"respect [for] the Declaration on the TRIPS Agreement and Public Health,
adopted by the World Trade Organization at the Fourth
Trade in Services With respect to trade in services, the US government's specific objectives include pursuing "disciplines to address discriminatory and other barriers to trade in the SACU countries' services markets."8 As mentioned above, the US plans to use the negotiations to address "overly restrictive licensing measures" and "restrictions the SACU governments impose that make it difficult for our services firms to do business in these markets."
If implemented, these negotiating objectives would render a range of legislative provisions in the South African Medical Schemes Act, for example, as unlawful. Such provisions increase access to health care services, by ensuring that unfair discrimination on the basis of health status is prohibited and by ensuring that medical scheme beneficiaries are guaranteed a minimum package of care, regardless of financial contribution.
It is not only trade in health care services that is of concern to TAC and the ALP. Similar arguments apply with equal effect, for example, to any regulatory steps taken by the state to ensure access to financial services for people living with HIV/AIDS. In our view, the state has a constitutional obligation to regulate the insurance services industry in such a manner, to ensure that people with HIV/AIDS have access to life cover and funeral benefits, as well as access to insurance services necessary for accessing financing for housing.9
The ALP and TAC are concerned that the US/SACU FTA negotiations have the potential to result in binding commitments on SACU member states that undermine access to health care services, the rights of people living with HIV/AIDS and the ability of such states to comply with their domestic, regional and international human rights obligations. In our view, such an agreement would not only unlawfully conflict with certain national constitutions and human rights instruments,10 but would also serve to advance the interests of the US at the expense of the health and welfare of the people of Botswana, Lesotho, Namibia, South Africa and Swaziland. 1 Copies of these letters are attached hereto. 2 Emphasis added 3 A more detailed and technical document will be supplied in due course. 4 Declaration on the TRIPS Agreement and Public Health, WTO Res. WT/MIN(01)/DEC/2, 4th Sess., Ministerial Conference, 20 November 2001 at paragraph 5(b). 5 Many thanks to Professor Brook Baker of Northeastern University School of Law in Boston, US, for identifying the implications of the USTR trade objectives. 6 19 U.S.C. § 3802(b)(4)(C) 7 In part, Executive Order 13155 reads as follows: "(a) In administering sections 301-310 of the Trade Act of 1974, the United States shall not seek, through negotiation or otherwise, the revocation or revision of any intellectual property law or policy of a beneficiary sub-Saharan African country, as determined by the President, that regulates HIV/AIDS pharmaceuticals or medical technologies if the law or policy of the country: (1) promotes access to HIV/AIDS pharmaceuticals or medical technologies for affected populations in that country; and (2) provides adequate and effective intellectual property protection consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15))." 8 Emphasis added 9 In this regard, see Government of the Republic of South Africa and Others v Grootboom and Others (2001 (1) SA 46 (CC)) at paragraph 36, where Justice Yacoob writes as follows: "For those who can afford to pay for adequate housing, the state's primary obligation lies in unlocking the system, providing access to housing stock and a legislative framework to facilitate self-built houses through planning laws and access to finance." [Emphasis added] 10 In particular, SACU members would be unlawfully preventing themselves from discharging their obligations arising from the ratification (where necessary) of any or all of the following human rights instruments: the African Charter on Human and People's Rights, the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, the Convention on the Elimination of All Forms of Discrimination against Women, and the Convention on the Rights of the Child. TAC Solidarity Statement with Southern African Clothing and Textile Workers UnionThe Treatment Action Campaign supports the campaign by the Southern African Clothing and Textile Workers Union (SACTWU) to urge South African clothing retailers to increase their stock of locally produced products. Following the loss of over 20,000 jobs in the clothing, textile and footwear industry last year, SACTWU engaged with a number of retailers to increase their purchases of local stock. Subsequently a number of companies have signed a NEDLAC agreement in this regard, but some large retailers, such as Mr. Price, have refused to do so. SACTWU has therefore lodged a Section 77(1) (d) notice at NEDLAC against a number of the non-signatory companies. During the next few weeks, a number of actions are planned by the union to highlight the failure of these companies to take responsibility for reversing job losses in the clothing industry. South African clothing workers are struggling to compete with workers from countries where labour unions are suppressed, child labour is not infrequently used to produce competitive products and worker rights are ignored. South African labour shed these legacies with the onset of democracy and therefore we should be able to take measures to protect local industries against competitors that benefit from exploitative practices. Some private sector economists and parties like the DA argue that clothing jobs are being lost because South Africa's labour market is inflexible and wages are too high. The TAC disagrees. Labour laws, such as the Employment Equity Act, are vital gains of the new South Africa. Amongst other things they protect workers against unfair discrimination on the grounds of HIV status. We do not believe that South Africa should become a cheap labour economy. Labour de-regulation and slave wages are bad for people's health. Migrant labour and pitiful wages were a major catalyst to the HIV/AIDS epidemic. The TAC supports fair trade that respects labour rights. Globalisation must be turned to the advantage of poor people, and efforts to globalise the exploitation of labour must be resisted. Reducing unemployment, improving wages and social welfare are critical to improving health-care and alleviating the HIV epidemic. We call on South African employers and clothing retailers to invest in South Africa. This is why the TAC fully supports SACTWU's initiative. [ENDS] Text of Advert TAC has placed in Newspapers
MAKE THE ANTIRETROVIRAL ROLLOUT A REALITYTreat people with AIDS now! In November 2003, after 16 months of research and preparation, the Cabinet endorsed a National Treatment Plan for HIV/AIDS. The Plan recognised that by mid-2003 half-a-million people were in need of antiretroviral medicines. The Cabinet Plan committed to:
Three months have passed since the Cabinet Plan was launched. So far none of these promises have been kept, yet at least 50,000 people died of AIDS in this time. Except in the Western Cape, not a single person has started treatment as part of the rollout. Instead, the Minister refuses to follow Cabinet"s policy. The TAC accepts some delays might be expected at the start of the programme, but the main cause of delay is political obstruction. Doctors and health facilities are ready to treat, but do not know when they will get medicines. The TAC calls on the Minister of Health to keep the Government"s promises. Stop the delays! Stop making confusing statements about HIV! Show compassion! Save lives! [ENDS] Letter from TAC to Dr. Humphrey Zokufa, Head of the Procurement Negotiation Team3 February 2004 Dr Humphrey Zokufa Department of Health Head: Drug Procurement Pharmaceutical Policy and Planning Manager Private Bag X328 PRETORIA 0001 URGENT Per fax: (012) 321 3103 Dear Dr Zokufa DRUG PROCUREMENT - OPERATIONAL PLAN FOR COMPREHENSIVE HIV AND AIDS CARE, MANAGEMENT AND TREATMENT FOR SOUTH AFRICA 1. In November 2003 the Government finalised and released its 'Operational Plan for Comprehensive HIV and AIDS Care, Management and Treatment for South Africa' (the Plan). This was the culmination of several years' work. 2. We welcome government's commitment to make life saving antiretroviral medicines (ARV drugs) available to those people living with HIV/AIDS who are in need of treatment. 3. Cabinet recognizes that the urgent, diligent and immediate implementation of the plan is necessary to improve the quality of life and prolong the lives of people who need ARV drugs. The plan estimates that approximately 500 000 people are in urgent need of antiretroviral treatment. However, the urgent and immediate implementation of the Plan in a reasonable manner is necessary in order to save the lives of people living with HIV/AIDS. 4. Both the Cabinet statements of 8 August 2003 and 19 November 2003 instruct that the Plan must be implemented on an urgent basis. 5. Within this context, the procurement of ARV drugs is a key component to the reasonable and successful implementation of the Plan. 6. For these reasons we are concerned by comments attributed to you in an article entitled "Battle Looms Over South Africa's 'Delay' in Aids drugs" published in the Financial Times on 20 January 2004. For ease of reference the article is attached (marked ' Annexure 1'). 7. In the interests of openness and accountability we invite you to explain the comments attributed to you in that article. In light of the urgency that is mandated by Cabinet for the implementation of the plan, we would appreciate a detailed response within five working days of receipt of this letter. 8. We are concerned by these comments because they indicate an inexplicable lack of urgency on the part of the procurement team in ensuring that there is an urgent and immediate procurement of ARV drugs to meet the immediate, short, and long-term needs of the Plan. There are many sites identified in the plan that demonstrates the need for ARV drugs or funding to procure these medicines. Without the immediate and urgent procurement of ARV drugs, the targets that are set out in the Plan (Table 0.2) to provide ARV treatment to at least 53 000 people for the financial year 2003/04 year may be difficult to attain. 9. We believe that any further and continued delay in the procurement of ARV drugs will continue to affect the reasonable and urgent implementation of the Plan. 10. In addition, we would also like to establish the following from you: a. What steps, if any, is the procurement team taking to ensure that Government has immediate and urgent access to a supply of ARV drugs to cater for interim needs, in particular to ensure that the targets set for fiscal year 2003/2004 is met? b. What steps, if any, is the procurement team taking to ensure that patients at public facilities (where such facilities are already prescribing ARV drugs to private unfunded patients) have immediate access to ARV drugs for use by public patients? c. What steps, if any, is the procurement team taking to ensure that Government has access to a sustainable supply of ARV drugs to cater for both the short and long term targets as set out in Table 0.2 of the Plan? 11. In addition, we would also like to establish the following a. The identities of the procurement team. b. Has the procurement team met since the publication of the Financial Times article? c. If not, when can we expect the procurement team to meet? d. When will the invitations to pharmaceutical companies (to participate in the tender process) be extended? e. When does the procurement team expect government to issue state tenders for the provision of ARV drugs? f. What steps, if any, is the procurement team taking to expedite the procurement of ARV drugs? g. What legal, regulatory or other obstacles, if any, is the procurement team experiencing in procuring ARV drugs immediately? h. When will ARVs be placed on the Essential Drugs List? i. If the procurement team is experiencing any legal, regulatory or other obstacles in procuring ARV drugs immediately, what steps is it taking to address these obstacles? 12. Kindly note that on 10 December 2003, two pharmaceutical companies (GlaxoSmithKline (GSK) and Boehringer Ingelheim (BI)) entered into settlement agreements with several individuals and organisations as part of the resolution of a complaint lodged with the Competition Commission that alleged that GSK and BI were unlawfully charging excessive prices for a number of key ARV drugs (AZT, lamivudine and nevirapine). In terms of the agreements, GSK and BI agreed to license four and three generic pharmaceutical companies respectively for the local production and/or importation of generic AZT, lamivudine and nevirapine products. 13. In short, the settlements mean that multiple generic manufacturers are (or are in the process of being) licensed to sell generic versions of these drugs (and combinations thereof) to both the public and private sectors. For your convenience, attached are copies of the agreements (marked 'Annexure 2' and 'Annexure 3' respectively). If you have any questions regarding the settlement agreements, please do not hesitate to contact us on (021) 788 3507. 14. Bearing in mind that both openness and accountability is required in the provision of health care services, as well as our own commitment to ensuring that the Plan is reasonably and successfully implemented, we would like to meet with you and the rest of the procurement team in order to comprehensively discuss the drug procurement aspects of the Plan. 15. We are also more than willing to provide you with any research, advice and/or assistance that you may require in fulfilling the mandate given to you by Cabinet. We hope that we will be able to meet with you by no later than February 18, 2004. We therefore look forward to hearing from you as a matter of urgency. Yours sincerely Zackie Achmat Sipho Mthati Chairperson Deputy Chairperson [ENDS] UNIVERSITY OF THE WITWATERSRAND
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