Important note: Information in this article was accurate in 2001. The state of the art may have changed since the publication date.
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Wall Street Journal - June 26, 2001
Helene Cooper, Staff Reporter
In exchange, Brazil agreed to give advance notice to American officials before invoking a provision that requires foreign companies to shift production of a patented product to Brazil within three years of introducing it there, or risk losing its patent protection.
But that advance notice doesn't mean Brazil will seek U.S. support for the requirement. "We're just telling them; we're not asking them," one Brazilian representative to the Geneva-based WTO said.
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The U.S. contends the rule is designed to pressure companies to manufacture goods -- such as AIDS drugs -- in Brazil.
U.S. Trade Representative Robert Zoellick said the U.S. and Brazil will try to set up a "consultative" group to discuss intellectual-property rights and AIDS treatment. "I stand four-square behind strong enforcement of the WTO rules on intellectual property," Mr. Zoellick said in a written statement. "However, litigating this dispute before a WTO panel has not been the most constructive way to address our differences."
Monday's announcement came as international leaders met at an AIDS conference at the United Nations in New York. U.S. Secretary of State Colin Powell called the timing a "coincidence."
The U.S. filed suit with the WTO in February, but no action has been taken on the matter. The complaint charges that the Brazilian law violates international trade rules and infringes patent rights.
From the start, the complaint has been a public-relations debacle for the Bush administration. Brazil has been able to distribute more AIDS-treatment drugs than any other developing country, and officials there say the patent law is one of their primary weapons in the fight against the disease.
Brazilian officials also launched a highly effective counter-campaign against the U.S. position. In numerous public statements, top Brazilian officials accused the U.S. of putting big-money interests of the drug companies ahead of the interests of people with AIDS.
AIDS activists around the world weighed in as well, characterizing the U.S. trade suit as Goliath beating up on David. "The U.S. complaint was threatening the most successful AIDS-treatment program in the developing world, and public opinion wouldn't stand for it," said Raymond C. Offenheiser, president of Oxfam America, a charity and relief group. Added Jamie Love, an activist who heads the Consumer Project on Technology: "One has to wonder why the U.S. feels it has to supervise" Brazil's patent law in the first place.
Alan F. Holmer, president of the Pharmaceutical Research and Manufacturers of America, a trade association for the pharmaceuticals industry, said in a statement Monday that PhRMA "welcomes" the news that the U.S. and Brazil will hold consultations on the patent dispute.
The Bush administration's decision to abandon the complaint comes four months after administration officials said they would continue President Clinton's AIDS policy, which, some drug companies complain, lets sub-Saharan African countries skirt patent protections on their products.
That announcement came amid speculation that the Bush administration might revisit the Clinton policy because of opposition from U.S. pharmaceuticals makers.
Since then, Mr. Zoellick has taken pains to present Bush trade officials as open to the needs of developing countries in the grip of the AIDS pandemic. Two weeks ago, while in Geneva for WTO meetings, Mr. Zoellick approached his Brazilian counterpart and suggested the two find a way to resolve the Brazil patent complaint, Brazilian officials said.
Write to Helene Cooper at helene.cooper@wsj.com4
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