22 February 2001

Contents:

1.  Report on Sydney WTO Inquiry public hearings and rally

Thanks to everyone for their support at the Fair Trade Rally and hearings on February 12. About 100 came from unions and other community organisations with lots of banners and signs.

There were at least 6 media radio interviews with rally speakers. Channel 10 TV was there too but we got crowded out of the news by the woman who was bitten by the funnel web spider!

The AFTINET and other presentations to the inquiry went well and there were about 30 people at the community forum. About half of them made statements to the Inquiry.

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Just a reminder of the hearing dates for other cities, which we circulated in January. Please consider if you can organise a public event and/or people to go to the community forum.

Canberra - Friday 9 March 2001 9am to 5 pm
Perth - Friday 20 April 2001 9am to 5pm
Melbourne - Thursday 26 and Friday 27 April 2001 9am to 5pm

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Melbourne: 9.30am Wed March 14 in the Condell Room, 1st floor, Melbourne Town Hall

Sydney: 9.30am Thurs March 15 Level 11, Conference room, 70 Philip St.

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4.  Democracy at the World Social Forum Challenged the Corporate Agenda and Civil Repression in Davos

by Pat Ranald (Her fare to the World Social forum was funded by the UNSW Humanities Faculty Prize awarded for her doctoral thesis).

" A better world is possible!" These words and the beat of Brazilian drums opened the World Social Forum of 10,000 people from 120 countries in Porto Alegre, Brazil from January 25-30. The Forum was organised by civil society organisations over the last eight months to develop alternative policies to those devised by the transnational corporations meeting at the World Economic Forum in Davos, Switzerland at the same time.

The Davos meeting took place behind barricades and civil protest was repressed by riot police, attracting widespread condemnation. In contrast, the World Social Forum was an expression of democracy and diversity. The opening ceremony was followed by a peaceful but exuberantly festive march through the city where the numbers swelled to 30,000, culminating in a free open-air concert.

The World Social Forum had a statement of support from UN Secretary General Kofi Annan and was funded by European non -government foundations and by the local and regional governments of Porto Alegre. It took place at the Catholic University was supported by prominent human rights campaigners including Noam Chomsky, Maude Barlow, Ariel Dorfman, Susan George, Vandana Shiva and Walden Bello. A televised debate between Porto Alegre and Davos showed that the corporate agenda now has to acknowledge that there are indeed alternatives.

The Forum themes included:

• creating sustainable development proposals to eradicate poverty and protect the environment
• democratising international institutions like the WTO, the World Bank and IMF
• organising against gender and racial discrimination and the protection and preservation of indigenous land and culture

Porto Alegre was chosen as the venue because it has a twelve year record of elected local governments led by the Workers’ Party (a left wing labour party) which has developed policies based on the forum’s themes. Olivio Dutra, the regional governor, opened the conference with a condemnation of policies of privatisation and deregulation which have been imposed on Brazil for many years by the International Monetary Fund and by conservative Federal Governments. Brazil is the largest and richest country in Latin America, but these policies have ensured it still has the most unequal distribution of land, wealth and income. His regional and local governments have used their relatively limited resources to develop the positive role of the public sector in providing public services. They have innovative forms of popular participation in government decisions, including participation by hundreds of local communities in the budgetary process.

As the convenor of the Australian Fair Trade and Investment Network (AFTINET), I attended the stream of seminars and workshops on the themes of trade and human rights. Analytical introductions to the themes by global experts were followed by a series of workshops which enabled activists from different countries to swap experiences and co-ordinate strategies. This included the campaign on the Trade in Services Agreement to be launched at the AFTINET public meeting on March 14.

The organisers plan to make the World Social Forum an annual event. Because of the short lead time, it was not widely known in Australia. Next year’s forum deserves more participation from Australian community organisations. Papers from the Forum should be available shortly at www.worldsocialforum.org.

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by Larry Elliott (published on Monday, Feb 12, 2001 in the Guardian of London)

Let me tell you a story about life, death and profit. It involves some of the poorest countries in the world and some of the richest companies. It goes to the heart of how the modern world is to be run and whether the institutions set up to police the global economy are up to the job. Eleven million people in poor countries will die from infectious diseases this year. Put a different way, it means that by the time you finish reading this column 100 people will have died. Half of them will be children aged under five. Just over a quarter - 2.6m - will die from HIV/Aids.

It is easy to work out why the death toll is so high. Poverty breeds ill-health and encourages the spread of infection, and the world is awash with poor countries. Just as a starving man knows there is food at the Ritz, governments in Africa, Asia and Latin America know there are medicines to treat these illnesses if only they could afford them.

But the bigger developing countries have found a way round this problem by making cheap copies of western drugs. India, for example, makes 70% of its own drugs, while Egypt, Thailand, Argentina and Brazil have also taken steps to become more self-reliant in pharmaceuticals. Poorer developing countries also benefit because they can import cheap generic drugs even if they cannot manufacture them. This should mean our story has a happy ending. It means more people get treated because the health budgets of poor countries go further. It means that developing countries have a chance to move into industries that have a higher technological component. And it means increased competition, putting downward pressure on prices. This final point, that the freer markets are better, is usually the clincher when it comes to the economics of globalisation.

But not this time. Enter the two other characters in our story - the world's largest pharmaceutical companies and the World Trade Organisation. Four companies dominate the pharmaceutical industry - Merck, Pfizer, Glaxo SmithKline, and Eli Lilly, and they wield enormous financial clout. The Big Four operate like a cartel, and like all cartels seek to wield monopoly power. It is basic economics that monopolies lead to higher prices, which is why many governments use anti-trust legislation to break them up. To say that the Big Four do not like the idea of cheap drugs coming onto the market from developing countries is something of an understatement. More competition equals lower share price.

But the financial muscle of the pharmaceutical companies also gives them enormous political leverage. So, during the Uruguay round of trade talks they lobbied hard for tougher rules protecting Sick Society intellectual property, which provided patent protection for a minimum of 20 years for "new and inventive" products. Where previously around 50 developing countries and several developed countries had excluded medicines from being patented, the Trade Related Intellectual Property Rights (Trips) deal made both pharmaceuticals and biotechnology part of the global regime. Infringements of the Trips agreement are heard by a WTO disputes panel, and unlike in a criminal trial, the burden of proof put on the defendant country. In itself, the Trips - a protectionist clause in what was supposedly a free trade agreement - roused suspicions about the way in which the rules were being skewed to suit powerful interest groups in rich countries.

However, some safeguards were included. Countries could cite a national emergency as a reason to infringe the Trips agreement. Effectively, this provided two loopholes. Countries could either manufacture cheap drugs themselves using what are known as compulsory licences to override patents, which is what Brazil is trying to do, or they could import a patented drug from wherever it was sold cheapest, the method favoured by South Africa. All quite simple, you might think. If the HIV/Aids pandemic does not constitute an emergency it is hard to know what would. The developing countries win, the drugs companies admit defeat, more people live happily ever after.

If only. What is happening now is that the US is using every available means to close the WTO loopholes. In part this has involved armies of lawyers crawling all over the 73 articles making up the Trips agreement, in part it has involved legal action. But it also involved 21st century gunboat diplomacy. For example, the US offers a special deal to the Dominican Republic for exports of textiles. It is now threatening to withdraw this privilege unless the country scraps plans for compulsory licensing and parallel importing. Brazil and India have been warned that they could face sanctions under America's bilateral Super 301 legislation.

The dirty work for the drugs' companies is being done by the US government, although there is little doubt who is really behind it all. But gunboat diplomacy is still a dangerous game, because there is a risk that public opinion will turn against Merck and Glaxo SmithKline in the way that they have turned against Phillip Morris and the other tobacco companies. Becoming an international pariah is not good for the share price either. The Big Four have a defence. They say patent protection is vital if companies are to plough vast sums into developing new cures for the diseases affecting poor people. In addition, they argue that the incomes of the world's poor are so low that they would not be able to afford even generic copies of patented drugs, and that the answer is some form of public-private partnership. Several of the big companies back global initiatives either by donating drugs or by subsidising drugs provision.

But the arguments of the pharmaceutical industry do not really stack up. For a start, their profit margins were already fat even before the Trips deal came into force. Secondly, R&D costs are dwarfed by money spent on marketing drugs. Thirdly, only 10% of R&D goes on drugs that account for 90% of global disease, with the bulk spent on first-world afflictions such as obesity. Finally, the drugs made available at lower prices are limited in supply and are still more expensive than generic substitutes. As Brazil has shown it is possible for a relatively poor country to treat HIV/Aids if they can manufacture the necessary drugs themselves. The price of triple therapy treatment is $4,000 in Rio, compared to $15,000 in New York. Almost 90,000 Brazilians who are HIV positive receive free treatment, four times as many as would receive the care if the country were paying full patent price.

The US has started proceedings at the WTO seeking to force Brazil to amend its patent law. Brazil, to its great credit, is standing up to the US bully boys in what is clearly a test case for multilateralism. Ever since the riots in Seattle, the WTO and the other global institutions have been under relentless scrutiny and attack, the main charge being that they put profit before people. If the WTO backs the drugs companies, it will be case proved.

What should happen is that the WTO should clarify its rules to give developing countries the right to produce or import medicines at affordable prices. If a country says that it is infringing a patent to cope with a national emergency, the burden of proof should be on the patent holder to prove that the country is wrong. The WTO is not a law unto itself. Governments should write the rules, not multinational corporations. And if they fail to back Brazil, India and Egypt they will have blood on their hands. It was once said that all that is needed for evil to triumph is for good men to do nothing. And what is happening here is evil. I have tried to think of another word for it. But there isn't one.

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A reminder of the AFTINET General Meeting Wed March 14 5pm and the Public Meeting 6.30 pm to launch the Trade in Services Campaign at the Tom Mann Theatre, 136 Chalmers St, Surry Hills.

The general meeting papers and the flyer for the public meeting have been emailed to you separately.

b) CAA Mekong Conference Tuesday 27th Feb, 2001, 6pm-8pm

The Asian Development Bank and its impact in the Mekong region, CAA/Oxfam Australia offices, 3/25 Cooper St, Surry Hills, close to Central Station. RSVP by Friday 23rd Feb on 02 8204 3900 or email margaretd@caa.org.au

c) Fairwear Protest, Wednesday 7th March, 12.00 - 1pm NSW Parliament

Remind the NSW government of their promise to stop the exploitation of women and children working in the textile, clothing and footwear industries in NSW.

d) AID/WATCH STREET PARTY, Thursday15th March, 8pm Owens Lane

Speakers: Professor Bob Walker and Betty Con Walker, Dr Patricia Ranald and Professor Frank Stilwell.

Organised by Economic Reform Australia and Peoples’ Movement for Economic Justice. If your organisation would like to sponsor this conference, please contact Frances Milne milne@itlite.com.au