TNCs versus the people (Part 2)
When free marketeers preach protection

by Anna Pha

World Trade Organisation (WTO) calls for "free trade" and "free markets" 
are turned on their head when it comes to what is referred to as 
"intellectual property". The Agreement on Trade Related Aspects of 
Intellectual Property Rights (TRIPS) lays the basis for a handful of 
powerful TNCs to control animal, plant, food and human life, and 
experiments with new plant, animal and human life forms.

Under TRIPS, governments are obliged to enforce the monopoly private 
ownership "rights" of transnational corporations (TNCs) to "intellectual 
property".

The term "intellectual property" refers to technology capable of industrial 
application, processes, ideas, research findings, writings, work and to 
other inventions (in practice it includes all discoveries).

The use of the word "rights" expresses the view that an individual or a 
corporation claiming to be the possessor or inventor of a process, idea, or 
other work has a right to private ownership of that product or process.

These rights are conferred on their "owners" by such means as patents, 
licences, copyright, trademarks and breeder's rights.

The owner of "intellectual property" has exclusive rights to prevent 
anybody making, using, selling, offering for sale or importing that product 
or process.

As the Organisation for Economic Co-operation and Development (OECD). said: 
"Rights in intellectual property are no different from rights in tangible 
assets in that they permit the exclusion of others from the use of the 
asset". (Competition Policy and Intellectual Property Rights, OECD, 
1989, p.12)

In the case of patents, private ownership continues for 20 years from the 
date of filing the patent. Making modifications to a product or process and 
re-patenting the new "invention" can extend the 20-year period.

WTO members must apply the Most Favoured Nation Treatment and National 
Treatment principles (see last week's Guardian) to other countries 
in relation to intellectual property rights.

The scope of what is considered to be intellectual property has virtually 
no limits.

WTO members are obliged to provide for the protection of plant varieties, 
including improved varieties of seeds.

Myths

In promoting the TRIPS agreement, the OECD argues that intellectual 
property rights promote technological innovation and dissemination as well 
as assisting the development of developing countries.

The OECD claims that without the guarantee of exclusive rights for a 
specific period of time corporations would not take the risks and carry out 
the research and development of new products and processes. In reality the 
reverse is occurring.

Piracy

As Cecilia Oh, legal advisor to the Third World Network, points out: "In 
the case of patents on biological materials, there is a 'double irony' in 
that patents are being granted over biological materials and the 
traditional knowledge of the use of such materials.

"This prevents access by developing countries to such biological resources 
and knowledge which originated largely in the developing countries 
themselves.

"In this context, the TRIPS agreement has facilitated the flow of resources 
and technology from the South to the North." (Third World Economics 
1-15/3/01)

This is not really surprising as very few of the intellectual property 
holders come from the poorer countries.

The agreement is really for the benefit of the highly industrialised and 
developed countries that monopolise scientific and technological 
developments and pirate the biodiversity of the Third World.

TRIPS has resulted in the enforcement of a very strict regime of monopoly 
and private ownership, "preventing" the transfer of the very technology and 
knowledge so necessary for the development of poorer countries.

Profits vs lives

Health is one of the areas where TRIPS has the most deadly ramifications.

Prior to TRIPS, around 50 countries had refused to recognise patents in 
respect of pharmaceutical products. They did so to protect the health of 
their people and to ensure real competition and public production of 
medications to keep prices down.

Now Cuba is one of the few countries where the public sector still produces 
and develops its own medications.

TRIPS entrenches the rights of patent holders at the expense of people's 
health and lives.

Researchers and NGOs have found that much of the research and the trialling 
of new drugs is carried out by the public sector, not the private sector.

In addition many of the costs the pharmaceutical corporations attribute to 
"research and development" are marketing and advertising costs. And when 
they write off these expenses as tax deductions it is the public purse 
which again foots the bill.

They spend millions every year on their lobbyists — in the USA during the 
1999-2000 election campaigning, they spent a record US$262 million 
attempting to influence political outcomes. They hired 625 lobbyists last 
year, more than one lobbyist per member of Congress.

The TRIPS agreement contains two methods by which countries, in certain 
circumstances, can make medicines affordable to their citizens: compulsory 
licensing, and parallel importation.

Compulsory licensing permits local companies to use patents without the 
permission of the patent holder to manufacture particular products in 
return for the payment of a reasonable royalty when the medication is sold.

Parallel Importation involves importing the medication from other countries 
where particular medications are sold more cheaply. In practice 
unfortunately it has proved extremely difficult for Third World Countries 
facing incredible health crises to exercise these rights.

The pharmaceutical corporations, mostly from the US, have reacted with 
extreme hostility and gone to great lengths to prevent governments 
exercising these rights.

They spent millions pressuring and standing over governments and 
negotiators at the WTO.

TNCs above the law

Thirty-nine of the leading pharmaceutical corporations took the South 
African Government to court, challenging legislation enabling the import or 
local manufacture of generic drugs.

In April this year, the corporations were forced to make a tactical retreat 
in the face of enormous local and international opposition.

Brazil also attempted to exercise these provisions, so that it could, like 
South Africa, provide cheap medications to combat HIV/AIDS.

In this case the US Government initiated a dispute against Brazil at the 
WTO, claiming that Brazilian patent law enabling the granting of compulsory 
licences had nothing to do with combatting AIDS.

The Brazilian Health Minister was attempting to provide "free" medicine to 
HIV/AIDS patients.

The pricing of medications has very little to do with research costs. It is 
a question of monopoly pricing and what they can get away with in each 
country, never mind how many people suffer unnecessarily or die as a 
consequence.

For example, a year's supply of Zantac, produced by Bristol Myers Squibb, 
costs US$3589 in the US. In India it can be purchased from US$47-$70 from 
local manufacturers and in Australia from between $227 and $326 (US$110-
160).

It also demonstrates how much cheaper medicines could be if they were 
produced to meet people's needs instead of for profits.

These pharmaceutical corporations not only maintain tight monopoly control 
over prices and production, they also dictate the direction of research.

As a result, "the companies expend money on R&D and develop medicines that 
'alleviate' pain or keep the illness under 'control' or on minor 
modifications to increase the life of patents. They don't undertake R&D for 
drugs to eliminate or eradicate disease. The former course ensures that 
sales and profits keep growing, while the latter would enhance public 
health but won't ensure rentier incomes", said Chakravarthi Raghavan, 
writing for the Third World Network.

Research on tuberculosis or sleeping sickness which kill millions of poor 
people every year, is neglected. The diseases of the rich take priority — 
hair loss, impotence, etc.

Private ownership of life 

The patenting of living matter is another extremely serious aspect of 
intellectual property rights. The spectre is an especially frightening one.

In effect, the signing of the TRIPS agreement amounts to a surrender of 
sovereign rights to determine what can be patented and the terms of the 
patents. Measures to break the monopoly hold of TNCs and ensure that 
important inventions can be released for the use and benefit of society are 
virtually outlawed.

As the OECD correctly pointed out: "Some theorists consider there is a 
fundamental contradiction between the personal interests of the innovators 
(i.e. securing a profit) and those of the community, particularly if a 
country has to look to imports for its development..."

Article 27.3(b) of TRIPS extends the agreement to cover microorganisms, 
non-biological and microbiological processes and plant varieties.

"The patenting of living things or life forms, some of which have been made 
mandatory by the World Trade Organisation, is unethical and also against 
the economic and social interests of developing countries", said Martin 
Khor, director of the Third World Network (Third World Economics 1-
15/3/01).

The outcomes of the patenting — private ownership — of the transgenic 
techniques, genetically modified organisms, genes, cell-lines, and even 
human life are completely unpredictable and could become uncontrollable.

A number of governments, particularly in the South, have been calling for 
substantial revision of the TRIPS agreement and abolition of article 
27.3(b), but they have had great difficulty in getting these issues onto 
the WTO agenda for serious discussion.

This is one of the big implementation issues that Third World countries 
have raised at the WTO and would like to see resolved before they are 
prepared to consider a new round of WTO negotiations. They have the support 
of the millions of people around the world who have joined protests against 
the WTO.

Third World countries and NGOs are also calling for developing countries to 
be able to exclude the patenting of medicines on humanitarian and public 
health grounds, to save lives, to counter and control epidemics and ensure 
that the poor obtain access to essential medicines to treat poverty related 
diseases.

* * *

Next week: The General Agreement on Trade Related Services (GATS)