Brazilian Legend Celso Amorim Recounts Negotiation For TRIPS Flexibilities

The former Foreign Minister of Brazil, Mr. Celso Amorim, who was also much involved in the negotiations that set up the World Trade Organization, gave a long interview to IP-Watch with his inside story on the issues and negotiations that led to the 2001 Declaration on TRIPS and Public Health.   This is the article carrying the interview.

By William New (IP-Watch)

Minister Celso Amorim of Brazil has had a significant impact on the state of global negotiations in his professional lifetime, including on global intellectual property rights.

As his new book, Acting Globally: Memoirs of Brazil’s Assertive Foreign Policy, sets out, in the first decade of the 2000s Brazil played an assertive role in foreign policy in areas such as the Iran nuclear issue, relations in the Middle East, and the Doha Round of multilateral trade negotiations at the World Trade Organization.

Amorim (see bio here) was at the centre of that, and reaching back to the early 1990s, took the lead role in negotiating the 1994 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

In an interview this month with Intellectual Property Watch conducted in the atrium of the WTO after he spoke at a South Centre side event (IPW, WTO/TRIPS, 7 March 2017), Amorim briefly retold the story of the TRIPS agreement negotiations that resulted in flexibilities for developing countries. He also negotiated the landmark 2001 Doha Declaration on TRIPS and Public Health, which reinforced those flexibilities.

The TRIPS negotiations were mostly completed in 1991, he said, and “the whole [time], we were negotiating under pressure, under duress.” Brazil and many other developing countries spent all of the time under threats like suspension of financing at the International Monetary Fund.

The original Punta del Este Declaration launching the Uruguay Round in 1986 focused the negotiations on intellectual property rights only on counterfeit products, he noted. This was under the General Agreement on Trade and Tariffs (GATT), before the creation of the WTO.

“What people had in mind, at least we thought, … that it was trade in counterfeited goods. So we thought that would be it,” he said. “Well then of course it evolved.” The developed countries led by the United States and others “were able to bring in all of the question of patents and intellectual property which normally would be the remit of the World Intellectual Property Organization through the GATT at the time.”

In addition, he said developed countries ensured “that there could be cross-retaliation so that a violation in intellectual property would enable a country to retaliate in goods, steel or orange juice or whatever, like if the Motion Picture Association, for instance, didn’t like something we did on film, or any pharmaceutical company.”

When they came out of the TRIPS negotiations, developing countries thought it didn’t look good for them as developed countries seem to have gotten their way. “All the things that they wanted they were able to put,” he said.

Silver Lining

But he saw a silver lining in some areas of the agreement, he said, thinking then, “There are some ambiguities here and there.” For instance, he said, “you were not able to say compulsory licence is not permitted. It was not legal to say that.”

They left it in a way that could be interpreted that there should be no preventing it, including a general article on non-discrimination. “We were not able to say compulsory licence is permitted, but [they were] not able to say CL is prohibited,” Amorim said. “I said to my colleague, ‘Don’t be so pessimistic. After all, these ambiguities we can someday use in our favour.’ But I did not have much expectation.”

Then something happened beyond negotiators’ control: “During the 90s, public opinion changed because of HIV/AIDS and because of the public opinion of the United States,” he said.

So when the US pursued a WTO legal dispute against Brazil, “against the provisions of our law on compulsory licensing,” he said, “a great deal of the US public opinion was with us because of people affected by HIV. In the United States, the rates were going down but still there was solidarity in that respect.”

At that time, he was now Brazil’s ambassador to the WTO (having been the trade minister who signed the Uruguay Round earlier).

And Brazil also made a “small manoeuvre which helped,” he said. “We looked for provisions in the United States patent law that had discriminatory aspects, especially in relation to grants to universities and things like that, because they say the product has to be patented in the United States, it has to be produced in the United States. So we said, ‘Okay you asked for consultation on that, we will ask for consultation on that as well.’”

“Well, I don’t know what was the thing that weighed more, but they gave up,” said Amorim. “They gave up and the only thing we agreed was not even negotiations, we agreed to have conversations. These things are very subtle.”

Then, as the WTO moved into the Doha Round of negotiations, the issue became big again, and many developing countries were worried, he said.

“To make a long story short, I saw that there was a big danger that instead – because the Europeans said, ‘Let us spell out the regulations how this will be applied. And then I thought, no, that will be against us,” as the regulation will be for subtract from the flexibilities. Developing countries sought to make them clear, so it did not happen.

TRIPS ‘Does Not and Should Not Prevent’

The result was Paragraph 4 of the Doha Declaration on TRIPS and Public Health. It states:

4. We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.

In this connection, we reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.

There were two formulations for this before it was finalised. The developing countries text said ‘nothing agreed prevents’ [“Nothing in the TRIPS agreement shall prevent members from taking measures to protect public health”], and the developed countries said ‘everything in the TRIPS agreement allows’, he said, the latter potentially a way to disallow exceptions.

One of the reasons for the failure of the 1999 WTO ministerial in Seattle, in addition to the US labour movement and disagreement on agriculture, Amorim said, was that the negotiating text was all in brackets – “hundreds, maybe thousands of brackets.”

“I remember when we left the last meeting here [at the WTO before heading to Seattle], I said, well the motto of the WTO has always been, ‘nothing is agreed until everything is agreed’, but in this case, it is ‘nothing is agreed, full stop’,” he said.

So WTO General Council Chair Stuart Harbison (Hong Kong) had the idea to have a clean text with no brackets, and asked negotiators, including Amorim, for their opinion in what he called “confessions”.

At that time, Brazil had a “very important policy” to combat HIV/AIDS with the use of generic drugs, Amorim said, adding, “I’m not speaking of something abstract. Our health minister was a very strong minister.”

So when Harbison called, Amorim told him, “it’s fine that you have a clean text” if it has the developing country formulation. “If you have the one by the developed countries, forget it,” he said. “And I’ll tell you something, don’t try to arbitrate, because if you try to arbitrate at that point it would be negative for us.”

That’s because “in Geneva, everything’s obscure, nobody sees the pressures, so it’s good to have that ‘shock’ in the public, in Doha [at the next ministerial to be held in late 2001]. “So I said, if you can’t accept ours, don’t put theirs and don’t arbitrate, put the two. And if you go to the history, it was the only paragraph that went with two formulations to Doha. It doesn’t mean the others didn’t change, but it was the only paragraph that went with two formulations. That was really because of Brazil.”

That was the first battle, he said, ensuring their formulation made it to Doha. The second battle? “To ensure that our formulation would be the basis for the negotiation.”

In the second battle, he said he doesn’t know exactly how it happened, but it was agreed in the end that their formulation would be the basis of the negotiations. He listed possible influences: a revolt, the perception that it was necessary to solve this problem before moving into the bigger questions of the round as if it was a “gateway” for other things, the attacks in the US on September 11 giving the Bush administration an imperative to have an agreement in Doha. Many developing countries came with Brazil, such as many African countries, and India.

Of course, he said, the text did not stay as their proposal, instead ending up stating, ‘the agreement will not prevent,’ [“We agree that the TRIPS agreement does not and should not prevent members from….”] “in a less aggressive way.”

The negotiation continued, and the groups were getting smaller, with the smaller group chaired by the former Mexican trade minister and later foreign minister. There were three ministers from Brazil in Geneva and Amorim was ambassador and had focused on that subject so he was in the negotiation.

“So we went to the room, and I had a very serious and honest negotiator on the other side, an American called Alan Larson. He was a lawyer from the State Department, which was a piece of luck,” he recounted. “Instead of having someone from the USTR [the Office of the US Trade Representative], there was this lawyer.”

The chair said at some point that he wanted only the US and Brazil in the room.

The European Union wasn’t happy to be left out. And Amorim said no, he wanted to have an African negotiator with him. Then the African who was there, who was from Cameroon, said no, ‘if Brazil is there we feel represented’, said Amorim, adding, “That was one of the best moments I had.”

So the two negotiated and came to an agreement, which was submitted to the small group and approved.

But when it came to the bigger group, a country from Brazil’s group tried to reopen the agreement, and he said he could not accept that, “an agreement is an agreement,” so it didn’t change.

“That was very useful, I didn’t do that with any purpose, that was honestly a negotiation,” he said. Later on, the laboratories went after Larson, because they were not happy with the agreement, “and he said – I know this – the Brazilians were honest, were correct, with me, I have to be correct with them, and he didn’t change,” Amorim said.

Still later, there were pressures on Brazil’s foreign minister, so he even had to call the health minister.

The final part of the story is told in a book by Paul Blustein, entitled, “Misadventures of the Most Favored Nations,” he noted.

The text of paragraph 4 was negotiated word by word, he said, adding, “That’s why you find a difference between ‘can’ and ‘should’.” This means it is possible and it is desirable, he said. Yet some things may be desirable and not possible and some things may be possible and not desirable. So he had to put the two of them in the text.

This word combination appears twice, in the positive and in the negative, as it also says cannot and should not in the same sentence.

Brazil has only issued a compulsory licence once, he said, for a drug it imported from India. “But the fact that we have this allowed us to negotiate with the laboratories from a better position,” he said.

That is why he emphasises preserving the TRIPS flexibilities. “Ambiguities became flexibilities because they were sanctified, so to say, as flexibilities,” he said. “This is the essential thing that has to be preserved, and this is something that has to be respected.”

Bringing the conversation to the present, that’s why he has said that in the UN High-Level Panel report, Article 2.6.1 is the most important paragraph, “because it requests countries at the highest level to commit themselves to respect the TRIPS flexibilities.”

“The TRIPS agreement was to a large extent a victory for the developed countries and a victory for the multinational companies, because they thought they got a lot of things that were not there, of course, intellectual property in the WTO not WIPO, they got cross-retaliation, which in the end worked against them – with Brazil cotton and Ecuadorian bananas,” he said. “But with the changing political situation, social culture, we were able to extract the Doha Declaration. I didn’t know that I would ever be able to have something like the Doha Declaration.”

“I was more dejected when I left [the TRIPS negotiation],” said Amorim. The political climate in 1991 was “totally neo-liberalism, Washington Consensus and so on, and all these ambiguities would work against us.”

But when the problem of HIV/AIDS appeared, Seattle failed, and sadly, 9/11 made it “absolutely imperative” to launch a new round, not to bring trade into collapse, it changed the climate.

Doha Declaration Everywhere

“I said well, maybe we were able to preserve some ambiguities,” he said once more. “But in the end, it was really the Doha Declaration that made the difference. You see it mentioned everywhere. You see it mentioned in the UN Human Rights Council, the World Health Organization, in the SDG [UN 2030 Sustainable Development Goal] number 3, etcetera, respecting the flexibilities established by the Doha Declaration on TRIPS and Health.”

What was distinctive about the Doha Declaration was that “the things that might have been seen as ambiguous – I don’t say that they were – they were clarified in a way that was compatible with our interests,” he said. That’s why so many bilateral and regional agreements since then have been TRIPS-plus, he said.

As to whether TRIPS ended up hurting developing countries as much as they feared, he said: “It would have, except for the Doha Declaration. It still is a difficulty, but it is a smaller difficulty than it would be if not for the Doha Declaration. Mind you, the developed countries gained a lot, on patents, everything other than health that’s in there, patents for other things.”

Asked about the argument that TRIPS is out-of-date and needs updating through bilaterals, he said: “I have heard that story before. I have great respect for President Obama, he did great things, but when it comes to trade, he lost an occasion because when he came to this impasse in 2008 [at WTO], we were very near. Bush didn’t do it, the Indians were difficult and so on, but Obama didn’t want to go forward. I even tried to flag with [then-USTR] Ron Kirk, I don’t know if he even understood me.”

And as to what is going to happen now, he said, “I’m scared. Anyone will be right once or twice a day. With the TPP [the Trans-Pacific Partnership which President Trump pulled out of], I think it was a question of whether it was good for the United States. I heard people from the left wing in the United States, like Stiglitz, were against TPP, I would agree.”

He added a remark that some political journalists “make a conceptual error,” confusing TPP with multilateralism, or confusing NATO with multilateralism. “These are organisations of regional interests, good or bad, but these are not multilateralism involving the whole world,” the negotiator said. “The WTO is multilateral. The UN is multilateral.”

And on where he thinks the world will be in 5 years, he said, “I’d like to know where we’re going to be in six months. If Washington resorts to unilateral sanctions, what can I say, I don’t know, it will depend on the [position] of each country.”

“This is not the same world as the 1980s or the 1970s, when the Uruguay Round was launched,” Amorim concluded. “This is the time of the BRICS [Brazil, Russia, India, China, South Africa], where exists China, so we’ll be working for the fragmentation of the world, and not necessarily in the US’s favour. People will have to think.”

[Update:] Asked after the interview if Brazil is “against IP”, Amorim vigorously stated, “No, no, not at all. We have a very important IP system, one of the most developed IP institutes in the developing world, which gives expertise to other countries. So no, we’re not against IP at all. But we have to see that life is above profit, and health is above patents.”

This article was published by the Intellectual Property Watch (IP-Watch) on 16 March 2017.