American Journal of Law & Medicine

Access to medicines, BRICS alliances, and collective action.(Brazil, Russia, India, China, and South Africa alliances)

INTRODUCTION

On December 6, 2005, shortly before the World Trade Organization ("WTO") Ministerial Conference in Hong Kong, WTO member states agreed to accept a protocol of amendment (1) to the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPs Agreement"). (2) This amendment sought to provide a permanent solution to implement paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health ("Doha Declaration"). (3) If ratified, the new article 31bis of the TRIPs Agreement will allow countries with insufficient or no manufacturing capacity to import generic versions of on-patent pharmaceuticals. (4)

To facilitate the supply of essential medicines to countries with insufficient or no manufacturing capacity, article 31bis(3) creates a special arrangement not only for the affected countries, but also for those belonging to a regional trade agreement. (5) Such an arrangement allows less developed countries (6) to aggregate their markets to generate the purchasing power needed to make the development of an indigenous pharmaceutical industry attractive. (7) It also paves the way for the development of regional supply centers, (8) procurement systems, (9) and patent pools and institutions, while facilitating technical cooperation within the region. (10)

Unfortunately, because article 31bis specifically requires that least developed countries make up at least half of the membership of any beneficiary regional trade agreement, the provision would benefit only a limited number of less developed countries, predominantly those in Africa. (11) Even worse, the interpretation of the provision remains contested within the WTO. While the European Communities "insisted that the [provision] should be limited to what is effectively sub-Saharan Africa," less developed countries in Asia, the Caribbean, and South America embrace a much broader interpretation of article 31bis(3). (12)

In light of the limited benefits of the proposed amendment to the TRIPs Agreement, this Article explores how greater collaboration among the BRICS countries (Brazil, Russia, India, China, and South Africa) and between these countries and other less developed countries can promote access to essential medicines in the less developed world. Part I introduces the five BRICS countries by offering a brief discussion of each country in the area of international intellectual property protection. This Part explains why South Africa is included along with the four largest emerging economies.

Part II then advances the hypothesis that, if the BRICS countries are willing to join together to form a coalition, it is very likely that the resulting coalition will precipitate a negotiation deadlock similar to the historic stalemate between developed and less developed countries before the adoption of the TRIPs Agreement. This Part explains why these five countries collectively would possess such immense power to stop the push by the European Communities and the United States to ratchet up global intellectual property standards while threatening to grind the intellectual property harmonization process to a halt.

Part III questions whether these five countries can build a sustained coalition in light of their very different historical backgrounds; the divergent levels of political, social, economic, and cultural developments; and the well-documented historical failures for less developed countries to build or maintain effective coalitions. Taking these challenges and potential hurdles into account, this Part contends that it may be more realistic for less developed countries to enter into alliances with one or more of the BRICS countries. Although these partial alliances will not have the same bargaining leverage as a complete BRICS coalition, this Part notes that the resulting alliances will still be quite effective in advancing the interests of less developed countries.

Part IV highlights the role that the BRICS coalition or partial BRICS alliances can play in the international intellectual property regime. It discusses four coordination strategies through which less developed countries can strengthen their collective bargaining position, influence negotiation outcomes, and promote effective and democratic decisionmaking in the international intellectual property regime. This Part contends that less developed countries, through collective action and better coordination, can enhance access to essential medicines by establishing an effective negotiation agenda, fostering more coherent positions among less developed countries, and obtaining better bargaining results. Such collaboration will also help develop a more powerful voice for the less developed world in the international debates on public health, intellectual property, and international trade.

Part V concludes with a discussion of the various challenges confronting the creation and maintenance of partial BRICS alliances. Due to the extended length of this article, this Part does not offer proposals to alleviate these challenges. It nevertheless underscores the importance for both the BRICS countries and other less developed countries to take advantage of the alliances when the interests of both groups of countries are still close to each other. The Article ends on an optimistic note--stating that, if less developed countries can use collective action to their advantage, they may be able to not only reduce the ongoing push by the European Communities and the United States to ratchet up global intellectual property standards, but also will enlarge the policy space that can be used to develop their intellectual property, trade, and public health policies.

I. MEETTHE BRICS

In October 2003, two global economists from the investment bank Goldman Sachs published a study entitled Dreaming with BRICs: The Path to 2050. (13) Using a term coined in 2001 for a group of fast-growing developing countries by the bank's chief global economist, Jim O'Neill, (14) the study found that the economies of Brazil, Russia, India, and China ("BRIC") are likely to overtake those of many existing developed economies by 2050. As it declared:

 
   In less than 40 years, the BRICs' economies together could be 
   larger than the G6 in US dollar terms. By 2025 they could 
   account for over half the size of the G6. Currently they are worth 
   less than 15%.... Of the current G6 (US, Japan, Germany, 
   France, Italy, UK) only the US and Japan may be among the six 
   largest economies in US dollar terms in 2050. (15) 

Because of its provocative finding, the study has attracted considerable attention and debate. The study has also sparked further research by both economists within the bank and elsewhere. (16) In a follow-up study, the Goldman Sachs team found that "[t]he BRICs' share of world growth could rise from roughly 20% in 2003 to more than 40% in 2025." (17) In a decade, more than 800 million people across the BRIC economies will have an income of over $3,000, "a number greater than the population of the US, Western Europe and Japan combined." (18)

To help us better understand the importance of the BRICS countries, and to lay the foundation for the discussion of the BRICS coalition and partial BRICS alliances, this Part offers a brief discussion of each country in the area of international intellectual property protection. It also explains why this Article includes South Africa, even though the Goldman Sachs study omitted the country on the basis of its "significantly smaller" projected economy. (19) This Part discusses the BRICS countries in the following order: Brazil, India, China, Russia, and South Africa. Russia is discussed after the other BRIC countries because it remains outside the WTO, and South Africa is added at the end to create the BRICS acronym used throughout this Article. (If Russia is excluded, due to its lack of WTO membership, the BICS acronym or the "BICS Quad" can be used instead.)

A. BRAZIL

Brazil, which has the world's fifth largest population, is the poster child of the use of--or, more precisely, the threat to use--compulsory licenses to promote access to essential medicines. Although the country has repeatedly obtained concessions from major pharmaceutical firms through these threats, in April 2007 Brazil finally granted compulsory licenses for the noncommercial public use of the patented AIDS drug efavirenz. (20) It remains to be seen how active Brazil will be in using compulsory licenses to promote public health.

Over the years, Brazil has also developed a very successful program to provide free, universal access to the treatment of HIV/AIDS. Its National STD/AIDS Programme "has reduced AIDS-related mortality by more than 50 percent between 1996 and 1999. In two years, Brazil saved $472 million in hospital costs and treatment costs for AIDS-related infections." (21) The Programme has been widely recognized as a model for the less developed world. (22)

For decades, Brazil has been a leading voice for less developed countries. During the TRIPs negotiations, it was one of the ten hardliner countries that refused to expand the mandate of the General Agreement on Tariffs and Trade ("GATT") to cover substantive intellectual property issues. (23) During the Fifth WTO Ministerial Conference in Cancun ("Cancun Ministerial") in 2003, Brazil choreographed the G-20, (24) whose demands and resistance led to the collapse of the ministerial conference. (25) A year later, Brazil, together with Argentina, introduced an important proposal to establish a development agenda within the World Intellectual Property Organization ("WIPO"). (26) The proposal was adopted in October 2007, and the Development Agenda now includes "a series of recommendations to enhance the development dimension of the Organization's activities." (27) Along with countries in South America and Southeast Asia, Brazil has been very active in supporting the free and open source software movement. (28)

As of this writing, Brazil remains the only less developed country that has ever requested consultations pursuant to the WTO dispute settlement process with any developed country concerning the noncompliance of intellectual property laws with the TRIPs Agreement. (29) Because of Brazil's aggressive public health positions and its leadership in the less developed world, the United States Trade Representative includes the country annually in its infamous Section 301 List among countries that pose major barriers to U.S. intellectual property exports.

B. INDIA

India, the world's largest democracy and second most populous country, is the other important voice for the less developed world. When Brazil requested consultations with the United States through the WTO dispute settlement process, India was the only other country that requested to join those consultations. 30 Indeed, India's active lobbying on behalf of less developed countries for lower intellectual property protection and special and differential treatment dates back to reforms introduced in the country shortly after its becoming an independent state. (31) These reforms included differential treatment for food, medicine, and chemical inventions; the prohibition of patents in pharmaceutical products (as compared to processes used to manufacture those products); (32) and the provision of compulsory licensing to encourage the local working of patents. (33)

During the 1967 Intellectual Property Conference of Stockholm, India and other less developed countries demanded special concessions in the international copyright system in light of their divergent economic, social, cultural, and technological conditions. (34) Although an insufficient number of Berne Union members ratified the Stockholm Act, thus necessitating a renegotiation of the revision text in Paris four years later, the Stockholm Conference led to the creation of WIPO and the inclusion of the Protocol Regarding Developing Countries in the Berne Convention. (35) Both WIPO and the protocol remain vital parts of the current international copyright arrangement.

Along with Brazil and other less developed countries, India also demanded a revision of the Paris Convention for the Protection of Industrial Property (36) in an effort to lower the minimum standards of intellectual property protection as applied to them. (37) The revision process eventually broke down during the 1981 diplomatic conference in Nairobi, following demands by less developed countries for exclusive compulsory licensing of patents and the United States' strong objection to those demands. (38) That stalemate ultimately led to the shift of multilateral negotiations from WIPO to GATT/WTO, the establishment of the WTO and the TRIPs Agreement, and the now-turbulent marriage of trade and intellectual property. (39)

In the past few years India has been listed in the United States Trade Representative's Section 301 Priority Watch List. (40) In 1997, the country became the respondent of the first intellectual property dispute in the WTO process that resulted in the establishment of a dispute settlement panel. In the parallel proceedings of India--Patent Protection for Pharmaceutical and Agricultural Chemical Products, the United States and later the European Communities successfully challenged the failure by Indian patent law to establish a mailbox system as required under article 70(8) of the TRIPs Agreement. (41)

Shortly before January 1, 2005, the deadline by which the TRIPs Agreement requires all developing countries to introduce protection for both pharmaceutical products and processes, India introduced a new patent law. (42) Although this new law is likely to have a major impact on the development and availability of cheap, generic drugs and related ingredients, it does not affect the production of drugs that have already been developed. The new law also includes specific provisions to allow generic manufacturers to continue to sell drugs that are already developed by paying reasonable royalties to patent holders. (43) Notwithstanding these safeguards, commentators have been particularly concerned about the impact of the new law on the global supply of generic drugs, because India "makes more than a fifth of the world's generic drugs." (44)

C. CHINA

China, the world's most populous country, is the "new kid on the block" in the WTO. On December 11, 2001, the country formally became the 143rd member of the international trading body. (45) Notwithstanding its recent membership, China's piracy and counterfeiting problems have been a major issue affecting its bilateral trade with the United States since the mid-1980s. (46) As a result, the country catches the attention of the United States Trade Representative annually--under the Section 301 Watch List, the Priority Watch List, or other special arrangements. Most recently, China became the respondent of the first WTO dispute on intellectual property enforcement that has resulted in the establishment of a dispute settlement panel. (47) A number of countries have since joined the dispute as third parties. (48)

Notwithstanding the considerable piracy and counterfeiting problems in China, there has been noticeable improvement of intellectual property protection in the country's major cities and the coastal areas. (49) There has also been emerging industrial development in the areas of computer programs, movies, semiconductors, and biotechnology. Such developments have led me to suggest elsewhere that the many conflicts and competing interests within China are likely to drive the country's leaders to develop a "schizophrenic" nationwide intellectual property policy. (50) While the country wants stronger protection for its fast-growing industries, it prefers weaker protection in fields related to pharmaceuticals, chemicals, fertilizers, seeds, and foodstuffs, due to its huge population, continued economic dependence on agriculture, the leaders' worries about public health issues, and their concerns about the people's overall well-being.

Although China has hitherto maintained a relatively low profile in the WTO, (51) and serves mostly as a respondent in W-TO complaints, that position will change as the country develops greater W-TO-related expertise and becomes more adept in responding to internal problems caused by the WTO accession. Indeed, despite being a new member, China already provided major support to less developed countries during the Cancun Ministerial. As Sungjoon Cho noted: "[T]he 'China factor' enabled the creation of the G-21 [or the G-20].... [W]ith China in their ranks, the size and impact of this coalition became unprecedented." (52) In the years to come, China is likely to become a very important player in the WTO, even if it does not become as vocal a leader as Brazil or India.

D. Russia

Russia, which has the world's ninth largest population and whose economy is projected to be the smallest among the BRIC countries by 2050, is the leftover Big Brother from the Cold War era. As a major military power with nuclear capabilities, it has an enviable status in world politics and is of great political importance to the European Communities and the United States. (53) It also has very high research-and-development capabilities and a considerable amount of technology-related human capital--two critical elements for the successful development of indigenous intellectual property industries.

As of this writing, Russia is still struggling in its negotiations to enter the WTO--a daunting task that took China more than fifteen years. (54) Although Russia's piracy and counterfeiting problems are as serious as, if not more than, those of China, (55) the country's limited economic growth has made Russia a less attractive market for Western businesses. While Russia is occasionally criticized, such as in the case of the Russia-based downloading website www.allofmp3.com, (56) the country's piracy and counterfeiting problems have caught less media attention. When Russia finally enters the WTO, it is likely to face similar transitional challenges that currently confront China. In fact, the strong likelihood that Russia will be unable to comply satisfactorily with all WTO standards shortly after its entry into the WTO has made EC and U.S. policymakers very reluctant to allow Russia to join the international trading body.

E. SOUTH AFRICA

South Africa is a strong economy that follows the BRIC countries in terms of its economic growth, but from quite a distance. It also has a much smaller population than each of the BRIC countries. As a result, South Africa was left out of the Goldman Sachs study. Nevertheless, in the near future, the country will remain quite powerful vis-a-vis other less developed countries, even though its economy may not compare favorably to that of the BRIC countries. (57)

Having the largest economy in the African continent, the country will have continuing influence over other countries within the continent, and possibly even those in Asia, the Caribbean, and South America. In addition, South Africa has been cited as an example of the wider socio-economic and public health problems caused by high intellectual property standards required by the TRIPs Agreement. (58) Along with Brazil and India, South Africa was prominently involved in the negotiations (59) that led to the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. (60) It has also been instrumental in putting the access-to-medicines issue on the human rights and public health agendas. (61) Today, South Africa remains very active in the access-to-medicines debate.

In retrospect, one could argue that the campaign on access to drugs, to which South Africa made an important contribution, provides a major turning point in the TRIPs debate. (62) When South Africa enacted a law to allow for compulsory licenses used in the manufacture of generic HIV/AIDS drugs in December 1997, the South African Pharmaceutical Manufacturers Association brought suit to challenge the law before the Pretoria High Court. (63) The United States government backed the industry by putting South Africa on the Section 301 Watch List and announcing the suspension of its Generalized System of Preferences (GSP) benefits. (64) Fortunately for South Africa and the less developed world, the South African government received considerable support from advocacy and minority groups and AIDS activists in the United States. The issue became quickly tied up with American electoral politics and has led to the erection of such politically-damaging banners as "Gore's Greed Kills." (65) The Clinton administration eventually backed away from its original stance, even though it was heavily lobbied by the pharmaceutical industry. Noticing the public outrage over the lawsuit and its weak legal position, the South African Pharmaceutical Manufacturers Association dropped the lawsuit in April 2001. (66)

F. SUMMARY

In the future, each of the BRICS countries--Brazil, Russia, India, China, or South Africa--is likely to play an important role in the development of the international intellectual property regime. To be certain, all of these countries still have many internal problems, such as limited judicial independence in China, severe infrastructural problems in India, heavy debts in Brazil, and environmental challenges, bureaucratic problems, and corruption in virtually all of these countries. (67) Moreover, because the Goldman Sachs study is based on the latest demographic projections and a model of capital accumulation and productivity growth, it may have been overly optimistic in assuming that the BRIC countries will undertake "reasonably successful development" (68)that is, these countries will continue to "maintain policies and develop institutions that are supportive of growth." (69) If the economies of these countries slow down or collapse as a result of internal political unrests, major reform failures, significant demographic changes, financial calamities, public health crises, environmental disasters, or even civil or external wars, these countries are very unlikely to overtake the world's leading developed economies as the study has forecasted. The authors of the Goldman Sachs study even concede that "there is a good chance that our projections are not met, either through bad policy or bad luck." (70) After all, that study was originally titled Dreaming with BRICs, and the Goldman Sachs team conceded "that dream may not become a reality." (71)

Nevertheless, even if we discount the potential economic growth in these countries, it is hard to ignore their impact on the international intellectual property regime, especially when they team up to form a coalition. Such a coalition, which will be described as "the BRICS coalition" throughout this Article, will be similar to what Frederick Abbott has called the "Southern Quad" (72) or what Peter Drahos has termed the "Developing Country Quad." (73) Just based on their total population, the size of their combined markets, and the aggregation of technical, legal, and managerial expertise within those countries, the BRICS coalition is likely to provide enough leverage to rival the European Communities or the United States.

If the coalition is well built and maintained, it can even become an effective counterweight to the trilateral cooperation among the European Communities, Japan, and the United States, all of which were instrumental in pushing for the adoption of the TRIPs Agreement. (74) This group of countries also has been active in promoting the harmonization of the international patent system, (75) pushing most recently for the rather ill-advised proposal for the adoption of the Substantive Patent Law Treaty. (76) Even if the BRICS coalition is unable to resist the push by this trilateral combination, the countries can at least exploit strategically the growing rifts between and among the European Communities, the United States, and Japan, (77) thus enlarging the policy space of less developed countries. As John Odell noted, a sophisticated negotiation strategy includes not only tactics for building coalitions, but also tactics "for splitting rival coalitions ... and for defending against efforts by outsiders to break one's own." (78)

In sum, it would not be far-fetched to advance the hypothesis that a coalition made up of the BRICS countries can provide an effective countervailing force against the continued push for stronger global intellectual property standards by the European Communities and the United States. (79) The resistance put up by this coalition may even result in a negotiation deadlock that resembles the historic stalemate between developed and less developed countries during the 1981 Diplomatic Conference in Nairobi. (80) For commentators who have called for a "moratorium" on the upward ratchet of global intellectual property standards, like Keith Maskus and Jerome Reichman, (81) a stalemate between developed and less developed countries may be somewhat desirable. At the very least, the stalemate will stop developed countries from pushing for higher intellectual property standards that have yet to be proven economically beneficial for the less developed world. (82)

II. THE BRICS COALITION

While there is no doubt that the BRICS countries will be economically powerful in the future, the effectiveness of the BRICS coalition is not dependent on the future economic strength of its members or the validity of the economic projections made by the Goldman Sachs global economists or other analysts. …

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