or phone (02) 8898 6500. Please RSVP to Jemma.
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2. Take action: Pressure Trade Minister Vaile about the impact of
the US FTA on Australia’s medicines policy
The Australian and US governments will conduct an annual review of the US FTA in
March. The review is a good opportunity to raise the public debate again about the impact
of the US FTA on social policies and to let Trade Minister Mark Vaile know that the
community is still monitoring the US FTA.
In our last bulletin, we included a number of articles on the so-called
‘progress’ of the USFTA. Since the agreement came into force on 1 January 2005,
Australia’s exports to the US have actually fallen and imports to Australia from the
US have risen. On top of this poor economic performance, Trade Minister Mark Vaile has
indicated that the Government may bow to US pressure to overturn the amendments to the US
FTA legislation made by the ALP on access to medicines. The ALP’s amendments were
designed to limit ‘evergreening’, that is, attempts by large pharmaceutical
companies to delay the entry of cheaper generic medicines by lodging spurious patent
claims.
In the lead up to the US FTA review, we are asking AFTINET members to write to Trade
Minister Mark Vaile to highlight concerns about US plans to lobby the Australian
Government to remove the ALP’s ‘evergreening’ amendment. Many of you
participated in the campaign during the negotiations and it is important that we keep up
the campaign’s momentum now that the impacts of the US FTA are starting to show.
As a guide, here are some more detailed points you can include in your letter to Trade
Minister Vaile:
- I am concerned about reports that the US Trade Representative plans to lobby for the
removal of the ‘evergreening’ amendment and for other changes to
Australia’s medicines policy at the upcoming joint review of the US FTA in March.
- I believe the evergreening amendment must be retained. The US FTA implementing
legislation inserted a new section into the Therapeutic Goods Act that requires generic
medicines producers to give prior notice to patent holders of their intention to produce
cheaper drugs and to certify that such production would not infringe a patent. This
requirement for prior notice before the production of generic drugs makes it easier for
patent holders to raise legal objections to extend patents and delay the appearance of
cheaper drugs on the market. In the US, patent holders have used such legal delaying
tactics aggressively, even when they have no prospect of winning the case. The high prices
of patented drugs mean that six months or a year's delay can result in billions of dollars
of additional revenue for large pharmaceutical companies and a lag in affordable medicines
for consumers.
- The evergreening amendment addresses this problem by requiring that patent holders who
want to commence legal action have to certify that they do so in good faith, that they
have reasonable prospects of success and that they will proceed without unreasonable
delay. Damages may be claimed if the court finds that the legal action does not conform to
these reasonable requirements.
- Pharmaceutical companies have been using such aggressive legal tactics to extend patent
rights and delay the production of generic medicines in the US. Without the evergreening
amendment, we could see the spurious extension of patents happening in Australia too. That
is why pharmaceutical companies are lobbying for its removal, and why the government
should not give in to this pressure.
- The loss of the evergreening amendment would have a long-term impact by delaying the
availability of cheaper generic drugs. It is the PBS comparison of the price of newer
drugs with cheaper generic drugs of the same medical effectiveness that keeps the prices
of prescribed medicines three to ten times lower here than they are in the US.
- I am also gravely concerned that the US government is also pressuring to change the
Australian Government’s policy for a 12.5% cut in the reference pricing of generic
drugs. We strongly urge you not to bow to such pressure and to ensure that
Australia’s policies on affordable medicines are retained.
- It is of particular concern that Australian medicines policy is being put at risk at a
time when the trade figures have revealed an increased trade deficit in the first year of
the US FTA. The government claims that there may be no clear economic benefits from the
agreement for five to ten years. If this is the case, medicines policy should not be put
at risk in the meantime and the Government should consider giving 6 months notice to
withdraw from the US FTA.
You can send your letter to Trade Minister Vaile at:
Mark Vaile
Minister for Trade
Parliament House
Canberra ACT 2600
mark.vaile.mp@aph.gov.au
And copy the Department of Foreign Affairs and Trade at us_fta@dfat.gov.au
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3. WTO disputes panel rules against regulation of genetically
engineered crops
Last week, a preliminary ruling of the WTO disputes panel found that the EU had
violated trade rules by delaying the entry of genetically modified (GE) crops to US
markets. The facts of the case are that the US, Canada and Argentina challenged
regulations in the EU that delayed the commercialisation of GE crops until further
scientific evidence proved the safety, or not, of GE crops.
The WTO disputes panel found that the EU regulations violated a WTO trade agreement.
This ruling indirectly challenges the UN Cartagena Protocol on Biosafety, which allows
countries to take a precautionary approach to regulating GE crops where scientific
uncertainty exists.
This ruling has potentially major implications for the democratic rights of
governments, including Australia, to set their own environmental and health regulation
where there is scientific uncertainty about a new technology.
World trade agency rules for US in biotech dispute
New York Times, 8 February 2006
By Andrew Pollack
The United States won a closely watched trade dispute yesterday when the World Trade
Organisation ruled that the European Union breached international rules by restricting
imports of genetically modified crops and food made from them. The decision, which was not
made public but was discussed by federal trade officials, also represents a victory for
the agricultural biotechnology industry, which for years has been battling opposition to
its products from consumers and governments in Europe and some other countries.
The ruling by a three-person panel at the Geneva-based trade body is not expected to
flood Europe with biotech foods. But American government and industry officials said it
would help discourage other countries from adopting similar barriers and would set a
precedent that countries must have sound scientific reasons for rejecting genetically
modified crops. Some countries have feared they would lose exports to Europe if they were
to grow the crops. "One of the reasons we brought the case was because of the
chilling effect the E.U.'s actions had on the adoption of biotechnology," a United
States trade official told reporters yesterday.
… The United States, joined by Canada and Argentina, filed a complaint against the
European Union in 2003, claiming that a moratorium on approvals of genetically modified
crops that Europe adopted in 1998 violated a food trade treaty that requires regulatory
decisions to be made without "undue delay" and to be based on science. The three
countries also complained that six European countries - Austria, France, Germany, Greece,
Italy and Luxembourg - violated trade rules by banning even biotech crops that had been
approved by the European Commission.
Europe had argued that it did not have a moratorium but that it just took time to weigh
the possible risks to health and environment posed by genetic engineering. It said it
needed to take a "precautionary" approach to regulation as opposed to
Washington's "laissez-faire" stance. The trade organization panel appears not to
have challenged Europe's regulatory process for biotech crops. Rather, it said Europe
failed to follow its own procedures, resulting in undue delay of decisions.
The panel ruled in favor of the United States regarding the bans by the six countries.
It also ruled in favor of the United States on 23 of 27 specific crops, according to L.
Val Giddings, a biotechnology industry consultant who said he had been briefed on the
ruling. Genetically modified crops, mainly corn, soybeans and cotton containing bacterial
genes that provide resistance to herbicides or insects, are widely grown and consumed in
the United States but rarely in Europe.
American biotechnology, food and agriculture groups hailed the ruling. "This is a
good, clear signal to the world that Europe was wrong," said Leon Corzine, chairman
of the National Corn Growers Association. He said about $300 million a year in corn
exports to Europe were lost as a result of the moratorium.
But consumer and environmental groups opposed to biotech crops condemned the finding.
"The World Trade Organization, with its secretive decision-making processes, is unfit
to decide what we should eat or what farmers should grow," Alexandra Wandel, trade
coordinator for Friends of the Earth Europe, said in a statement.
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4. UN paper raises concerns about opening up trade in services for
developing countries
The UN Conference on Trade and Development (UNCTAD) has released a paper that warns
that the WTO’s approach of ‘one-size-fits-all’ trade liberalisation does
not necessarily lead to growth and development in poor countries.
The paper explores some of the problems that have arisen from opening up services
sectors, such as displacement of local firms by large foreign services corporations, the
loss of jobs in those services industries and negative impact on access to essential
services, such as health, education and culture. UNCTAD recommends that opening up
services only assists development where there are appropriate national regulatory
frameworks for liberalisation. The Paper states "the conclusion from available
evidence is that a ‘one-size-fits-al’ approach is inappropriate in dealing with
services trade liberalisation."
This is an important piece of research in the face of accelerated WTO negotiations
following the WTO Ministerial Meeting in Hong Kong. The Hong Kong Declaration changed the
process of GATS negotiations to a ‘plurilateral’ negotiating process which will
increase the pressure on countries to open up essential services sectors to foreign
investment.
The paper is available from UNCTAD’s website: www.unctad.org, search for document TD/B/COM.1/77.
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5. Boliva calls for removal of water from trade agreements
On 10 February, the Bolivian government called for water to be withdrawn from the
GATS negotiations and other free trade agreements. The demand is contained in a
Ministerial Declaration, drafted by the Bolivian Government. This Declaration will be
taken to the World Water Forum to be held in Mexico in March. NGOs from around the world
are calling sympathetic governments to support this declaration.
The relevant parts of the draft Declaration follow:
We claim as our own the words of the UN Committee on Economic, Social and Cultural
rights which in November 2002 stated that: "Water is a limited natural resource and a
public good fundamental for life and health. The human right to water is
indispensable for leading a life in human dignity. It is a prerequisite for the
realization of other human rights."
We endorse: "The right to water clearly falls within the category of guarantees
essential for securing an adequate standard of living, particularly since it is one of the
most fundamental conditions for survival (…) The right to water is also inextricably
related to the right to the highest attainable standard of health (…) and the rights
to adequate housing and adequate food (…) The right should also be seen in
conjunction with other rights enshrined in the International Bill of Human Rights,
foremost amongst them the right to life and human dignity." (CESCR 2002)
In order to meet the Millennium Development Goals, we commit to prioritizing investment
in water from our national public budgets. We call on the international aid community
(World Bank, Regional Development Banks and Bilateral Government agencies) to support the
initiatives of developing countries without any conditions based on the privatization of
drinking water and basic sanitation services. We consider that management and
control of water needs to be in a sphere that is public, social, community-based,
participative and not based on profit. All local, national and international public
institutions have a responsibility to ensure these conditions.
We call for the withdrawal of water from all free trade agreements such as the WTO and
regional Free Trade Agreements and reaffirm the sovereign right of each country to
regulate their hydrological resources in all its uses and services. We urge the suspension
of any negotiation on drinking water and basic sanitation services within GATS (the
General Agreement on Trade in Services of the WTO) and call for the withdrawal of water in
all its uses and services from the jurisdiction of Bilateral Investment Treaties.
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6. AFTINET membership renewals
We are currently processing the AFTINET membership renewals for 2006. You should have
received a membership renewal form and AFTINET materials in the mail recently. If you have
not received this information, we may have an incorrect address for you. Please contact
our administration officer, Alex Price-Randall, on alex@piac.asn.au
or 8898 6500, if you have not yet received a membership renewal form.
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7. Melbourne forum: World Trade Organisation 101 workshop
The Australian Centre for Democracy and Justice (www.democracyandustice.org)
have organised a forum to unravel the mysteries of the WTO, provide a critical analysis of
what goes on behind its closed doors, and explain why you should care. The World Trade
Organisation makes the rules for global trade, but increasingly its rules are affecting
the domestic laws of many of the world's countries. However few people know much about the
WTO. What is it? Why does it exist? Who runs it? Who sets it's agenda? Who is it
accountable to?
When: 7pm Tuesday 21st February 2006
Who: Mike Cebon (Global Trade Watch) and Jagjit Plahe
(Monash University)
Where: Evatt Room, Trades Hall (cnr Lygon St and Victoria St Carlton)
Cost: $5
