WTO diplomats try again to seal drug pact

WTO diplomats decided to reconvene on Saturday after another failed effort to close a deal allowing poor nations to import cheap generic drugs.

World Trade Organization diplomats decided to reconvene on Saturday morning after another failed effort to close a deal allowing poor countries to import cheap copies of patented drugs for killer diseases such as AIDS, malaria and tuberculosis.

The representatives had nearly reached a deal by 1 am on Friday after a marathon session but it fell through minutes later.

That failure was a surprise, since the same officials earlier accepted the agreement after the United States ended an eight-month holdout.

Negotiators arriving for Friday afternoon's meeting said the deal stumbled over demands by some countries to make statements before the WTO's General Council formally approves the deal. Those statements can be used to make "reservations," or spell out limits countries will place on their adherence to the accord.

Philippines ambassador Edsel Custodio said his country was ready to accept the agreement as it stood, but still wanted to make a statement.

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"It isn't a reservation. It isn't a qualification. It's just a clarification of some of the elements that concern us," Custodio said without providing more detail.

Some developing countries said they would only accept the pact on the understanding that measures to prevent smuggling would not add to the price of the drugs or make it more difficult for needy countries to get them.

The countries also noted that the agreement is supposed to be a short-term fix for a few years. They said they wanted to see work begin quickly to include the deal in the WTO's treaty on intellectual property rights.

Although it was possible that Friday's General Council meeting could approve the accord, WTO spokesman Keith Rockwell said it was "very unlikely" a decision could be taken before trade ministers from the WTO's 146 member countries meet in Cancun, Mexico, beginning September 10.

But Eduardo Perez Motta, Mexico's ambassador, said the agreement "isn't something that any member would like to discuss in Cancun. I don't think it's in the interests of anyone not to solve this topic before Cancun."

The chances for a deal improved on Thursday when the WTO's intellectual property panel adopted a document letting developing countries ignore some patent rules in importing drugs from cheaper generic manufacturers, along with a statement aiming to calm the fears of US drug companies.

However, differences emerged when the WTO immediately reconvened the General Council, which has to give final approval. "This is a serious humanitarian issue which cannot be done in a way which is not entirely clear," said the meeting's chairman, Uruguayan ambassador Carlos Perez del Castillo.

"We have to get this right, not just for us but more importantly for the people who desperately need these medicines."

Under WTO rules, countries facing public health crises have the right to override patents on vital drugs and order copies from cheaper, generic suppliers.

However, until now they could only order from domestic producers -- a useless loophole for the huge majority of developing countries that have no domestic pharmaceutical industry.

US pharmaceutical research companies were concerned that a deal allowing countries to import generic drugs would be abused by generics manufacturers and could also lead to drugs being smuggled back into rich countries.

To satisfy those concerns, the document was accompanied by the new statement setting out conditions for using the measure. The statement says rules allowing countries to override patents "should be used in good faith to protect public health ... not be an instrument to pursue industrial or commercial policy objectives."

It calls for special measures to prevent drugs being smuggled back to rich country markets, including special packaging or different colored tablets. Developed countries would agree not to make use of the provision.

Some of the wealthiest developing nations would only use the measure in "situations of national emergency or other circumstances of extreme urgency," it added. Diplomats earlier congratulated themselves on what they believed was a deal.

"This decision is extremely important for many African countries who need to be able to import generic drugs which are affordable and who don't have the capacity to produce them," South Africa negotiator Faizel Ismail said.

"This decision will contribute to creating the conditions for that to happen, and will certainly have an impact on the ability of governments to save many more lives."

A failure to reach a deal in Geneva could jeopardize the chances of delegates reaching agreement on other issues as part of the current "round" of trade liberalization negotiations.