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WTO Controversies

What's wrong with the WTO?
WTO Controversies

The following controversies have been conducted outside the formal World Trade Organization dispute-settlement process. WTO cases have been decided by the process.
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Eco-Labeling Controversy
Genetically Modified Foods Controversy
Greenhouse Gases Controversy
Longhorn Beetle Controversy
Electronics-Industry Pollution Controversy

Lead Compounds Controversy
AIDS Drugs Controversy
Baby-Food Trademark Controversy
Traditional Medicines Controversy
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Eco-Labeling Controversy

Complaints by: U.S. & Canada
Complaints against: European Union
Proposals discussed: 1996 in WTO Committee on Technical Barriers to Trade & WTO Committee on Trade and Environment. Formal WTO dispute-settlement procedure not initiated.

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In 1996 in the WTO Committee on Technical Barriers to Trade and the WTO Committee on Trade and the Environment, the U.S. and Canadian governments raised the argument that even the voluntary labeling of products as environmentally friendly is a technical regulation that should be scrutinized under TBT.

Eco-labeling in a broad sense involves a certification that a product meets certain environmental or social criteria of concern to consumers. It can be mandatory or voluntary, public or private. In the U.S., the energy-efficiency ratings for appliances, fair-trade designations for coffee, and the former "Dolphin Safe" label on tuna cans (now removed in response to WTO complaints) are common examples. The Europe Union has had a voluntary eco-labeling program since 1992. Because eco-labeling relies on informed consumer choice within the market to achieve environmental or social goals, it is one of the least intrusive forms of regulation.

The U.S. position was based primarily on a proposal by a U.S. industry coalition to severely restrict eco-labeling. U.S. environmental and consumer groups campagined against the proposal, and the EU, Norway and Australia resisted parts of it within the WTO. The issues were never resolved and the WTO committees finally adopted a neutral report.

In more recent disputes, the EU's country-of-origin labels ("Made in France" for example) have also provoked U.S. criticism as restrictions of trade. And the U.S. and Canada have again used the Committee on TBT to oppose labeling of genetically modified foods by the U.K. and other European countries.

See also Genetically Modified Foods Labeling Controversy.

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Resources

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Genetically Modified Foods Controversy

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Opinions

"The European Commission on 25 July released their long-awaited proposals for new labelling and traceability regulations related to genetically modified organisms (GMOs) aimed at ending the European de facto moratorium on GMO approval, in place since mid-1999. Together with the recently adopted revisions to the EU directive on the deliberate release of GMOs into the environment, the proposed regulations would establish what the Commission called the 'world's most stringent' rules on controlling and monitoring the release of GMOs. …"

"Despite the Commission's assurances that the new regulations took account of the EU's international trade commitments, US Trade Representative Robert Zoellick strongly criticised the proposal, which he said 'extends far beyond health protections for consumers and in fact creates onerous and impractical regulatory barriers.' He added that the rules would impede developing countries' efforts to use biotechnology for improving nutrition, lowering food costs and reducing reliance on pesticides. The US and other GMO exporting countries, such as Canada and Argentina, are wary that the system would affect their exports and say that it could run counter to WTO rules."

—BRIDGES Weekly Trade News Digest, Vol. 5, Number 29, July 31, 2001.

~

"These laws will ensure that the regulatory framework in the EU is up to the high standard consumers expect. We believe the package of measures is well balanced and that industry will be able to trade."

—David Byrne, EU food safety commissioner, July 25, 2001

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"The provisions for traceability ensure a high level of environmental and health protection and pave the way for a proper labelling system. Certainly, there is a cost for the producers and for trade, but what is at stake is our ability to build public confidence."

—Margot Wallstrom, EU environment commissioner, July 25, 2001

~

"On 11 January, the Consumer Federation, a coalition of the biggest US consumer groups, issued a report on the current situation of regulation for biotechnology in foods. The report, written by Thomas McGarity, a University of Texas law professor, recommended that the FDA should abandon its 'substantial equivalent' assumption [which sees GM foods as practically identical to conventional foods and therefore requiring no special treatment], require extensive testing of GM foods, set up a mandatory labelling scheme for products with more than a negligible amount of biotech material and require mandatory consultations with federal regulators for developers of GM foods."

—BRIDGES Weekly Trade News Digest, Vol. 5, Number 1, January 16, 2001.
...

Raised by: U.S.
Directed against: European Union, Japan & Australia
Discussed: 1999 to present. No formal WTO discussions or dispute-settlement procedure were initiated.

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Since 1999, the United States has criticized initiatives by Europe, Japan and Australia to regulate and label genetically modified (GM) foods and has challenged the legality of such provisions under the WTO.

Genetically modified organisms (GMOs) are produced by introducing genes from one species into another in order to transfer desirable traits. The safety of GM foods for consumers and the environment is a concern for many consumers around the world in the absence of long-term testing of these new biotechnologies. Polls indicate that 93 percent of Americans and 74 percent of Europeans favor the labeling of GM products. Many scientists and consumer advocates fear that crops engineered to resist pesticides and herbicides could increase reliance on those chemicals and damage environments, pass the new tolerances on to weeds, and ultimately diminish biological diversity.

In the U.S., products containing GMOs are not regulated. European governments, however, have passed GMO regulations in response to growing public outcry after a series of food-related health crises such as mad-cow disease. Currently the EU has imposed a three-year moratorium on the approval of new GM crops. Over the past two years, the U.S. and the EU have blustered and negotiated over this issue.

U.S. agribusiness, which is the primary exporter of GM food, argues that it is the victim of protectionism on this issue. In its support, the U.S. government claims that European GMO regulations may violate three WTO agreements:

The U.S. carried this battle into the 1999-2000 talks that adopted the Cartagena Protocol on Biosafety, part of the United Nations Environment Programme's Convention on Biological Diversity. There, it led a group of countries that attempted to weaken restrictions on trade in GMOs. In the Codex Alimentarius Commission of the U.N. Food and Agriculture Organization, as well, the U.S. has opposed mandatory GMO food-labeling as WTO-inconsistent.

See also Eco-Labeling Controversy.

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Resources

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Greenhouse Gases Controversy

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Opinions

"On September 8, 1998, the Diet (the Japanese Parliament) passed a law that required the national government, prefectural governments and local governments to draw up 'action plans' for reducing greenhouse gases in line with Japan's Kyoto Protocol obligations. A significant aspect of these plans will be improvements in the efficiency of government-owned buildings and the purchase of low emission vehicles for government-owned fleets."

—Pacific Northwest National Laboratory. "Japan. 4. National Energy Policy and Energy Overview."

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"[A]lthough the use of these technical criteria for the definition of the scheme does not appear to be per se discriminatory, the regime … puts a comparatively heavier burden on imported products."

—E.U. letter to the WTO TBT Secretariat, 1999
...

Complaint by: U.S. & E.U.
Complaint against: Japan
Discussed: 1999. Formal WTO dispute-settlement procedure not initiated.

Commmittee on Technical Barriers to Trade - Notification 99.003. Letter from European Commission Industrial Secretariat, 1999.

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In accordance with the 1997 Kyoto Protocol, Japan adopted auto fuel-efficiency proposals to curtail greenhouse gases. In 1999, the U.S. (acting on behalf of Ford and Daimler-Chrysler) and the E.U. threatened WTO action against the revised Japanese energy law. They invoked prohibitions in the WTO Agreement on on Technical Barriers to Trade against unecessarily trade-restrictive standards in letters to the WTO Committee on Technical Barriers to Trade and the Japanese Ministry of Foreign Affairs.

The controversy centered on 1998 revisions to Japan's "Law Concerning the Rational Use of Energy," which tightened what had been less stringent fuel-efficiency standards for medium-weight automobiles. As a benchmark, the law uses the emission levels of the least-polluting engine in the medium weight class, which happens to be made by Mitsubishi. But auto manufacturers can use any engine that matches or surpasses that level of fuel efficiency; the law does specify how the level must be achieved.

Nearly 90 percent of middle-weight cars in Japan are imported from Europe. Because of this, the U.S. and E.U. complained that the new standards put the heaviest burden on European cars. Japan said its standards merely targetted those cars that were putting out the worst CO2 emissions, which could prevent it from meeting its Kyoto Protocol obligations.

As in the Automobile Fuel-Efficiency Case, the argument of the U.S. and E.U., if accepted, would seem to create incentives for foreign manufacturers to ignore clean-air standards and then claim de facto discrimination against their products when they fail to meet those standards.

See also the Automobile Fuel-Efficiency Case.

Resources

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Longhorn Beetle Controversy

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Opinions

"The Animal and Plant Health Inspection Service (APHIS) is amending the regulations for importing logs, lumber and other unmanufactured wood articles by adding treatment and documentation requirements for solid wood packing material imported from China. This change means that wooden pallets, crating, dunnage, and other wooden packing material imported into the United States from China will have to be heat treated, fumigated or treated with preservatives prior to departure from China. This action will affect anyone who uses solid wood packing material in connection with exporting commodities from China to the United States. This action is necessary to control the risk that solid wood packing material from China could introduce dangerous plant pests, including forest pests, into the United States, a risk demonstrated by many recent incidents where exotic pests were detected in solid wood packing material from China."

—Committee on Sanitary and Phytosanitary Measures - Notification - United States [G/SPS/N/USA/137, 30 September 1998]

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"The representative of Hong Kong, China observed that Article 5 of the SPS Agreement, and also the International Plant Protection Convention (IPPC), required that SPS measures be based on a risk assessment which evaluated the likelihood of entry, establishment or spread of the pests concerned. However, it appeared that no such risk assessment had been conducted in respect of Hong Kong, China. As a WTO Member and separate customs territory, Hong Kong, China should be treated separately in the application of trade rules from the mainland of China. Her authorities were also concerned about the environmental consequences of the proposed US measure which required treatment of solid wood packing material by one of three possible methods: heating, pressure treatment, and fumigation with Methyl Bromide."

—Committee on Sanitary and Phytosanitary Measures - Summary of the Meeting Held on 11 - 12 November 1998 - Note by the Secretariat [G/SPS/R/13, 15 January 1999]
...

Complaints by: Hong Kong
Complaints against: U.S. & Canada
Complaints to WTO Committee on Sanitary and Phytosanitary Measures. Formal WTO dispute-settlement procedure not initiated.

Committee on Sanitary and Phytosanitary Measures - Notification - United States - Solid wood packing material - Addendum [G/SPS/N/USA/137/Add.3, 26 November 1999]
http://docsonline.wto.org/DDFDocuments/t/G/SPS/NUSA137A3.DOC

Committee on Sanitary and Phytosanitary Measures - Summary of the Meeting Held on 11 - 12 November 1998 - Note by the Secretariat [G/SPS/R/13, 15 January 1999]
ii. United States - interim rule affecting solid wood packaging material.
http://docsonline.wto.org/DDFDocuments/t/G/SPS/R13.DOC

Committee on Sanitary and Phytosanitary Measures - Notification - Canada [G/SPS/N/CAN/44, 23 November 1998]
http://docsonline.wto.org/DDFDocuments/t/G/SPS/NCAN44.DOC

Committee on Sanitary and Phytosanitary Measures - Interim Rule Affecting Solid Wood Packaging Material (G/SPS/N/USA/137) - Statement by the United States at the Meeting of 11-12 November 1998 [G/SPS/GEN/107, 23 November 1998]
http://docsonline.wto.org/DDFDocuments/t/G/SPS/GEN107.DOC

Committee on Sanitary and Phytosanitary Measures - Notification - United States [G/SPS/N/USA/137, 30 September 1998]
http://docsonline.wto.org/DDFDocuments/t/G/SPS/NUSA137.DOC

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Wood-boring Asian longhorned beetles, indigenous to Japan, Korea and China, have become a dangerous invasive species in North America, where they face no natural predators. Once they have infested a tree, pesticides are useless: they can be eliminated only by uprooting and burning it.

The U.S. Department of Agriculture predicted in 1998 that direct economic damages from these beetles, mainly to maple syrup and timber producers, might exceed $130 billion if they infested U.S. forests. Canada also expressed concern for potential damages to its economically important maple trees. The U.S. Animal and Plant Health Inspection Service (APHIS), which had to uproot and burn thousands of trees to stop infestations, called the pests a "serious threat" to U.S. agriculture and forests. The agency traced infestations of the beetles to imported solid wood packing material from China and Hong Kong. Roughly half of China's exports to the U.S. are shipped via Hong Kong.

On September 30,1998, the U.S. responded to the infestations by notifying the WTO Committee on Sanitary and Phytosanitary Measures (SPS) that it was amending its regulations to require that wooden packing material imported from China be heat treated, fumigated or treated with preservatives prior to departure. Canada also announced in November 1998 that it was imposing similar measures to deal with recent infestations of the beetle.

Although China was not a WTO member at the time, the Hong Kong Special Administrative Region (part of China and a WTO member) filed a complaint against the regulations before the SPS Committee on November 11, 1998. It pointed to the requirement of the Agreement on Sanitary and Phytosanitary Measures that a risk assessment be conducted before imposing such regulations, and that the methods of treatment required by the U.S. were damaging to the environment. And it claimed that the measures were discriminatory because they did not apply to other nations through which Chinese imports are shipped to the U.S.

Hong Kong did not pursue the complaint in the WTO and the U.S. did not rescind the regulations. Rather, it amended the rule in November 1999 to require that wood articles fumigated with methyl bromide or other fumigants be aerated before shipping because it had detected dangerously high levels of methyl bromide in some shipping containers. However, the dispute shows the potential of WTO complaints to coerce members into dropping or weakening environmental regulations, particularly if made by a more powerful country against a weaker country.

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Resources

  • Tom Baldwin. "Bug Casts Giant Shadow." Journal of Commerce, September 28, 1998.
  • Tom Baldwin & P.T. Bangsberg. "USDA Acts Ahead of Pallet Ban." Journal of Commerce, November 17, 1998.
  • P.T. Bangsberg. "China Criticizes 'Unfair' Beetle Ban." Journal of Commerce, September 22, 1998.
  • Global Trade Watch. "Challenge of U.S. Forest Protection Rule (Asian Longhorned Beetles)." Public Citizen Web site, no date.
    http://www.citizen.org/trade/wto/ENVIRONMENT/articles.cfm?ID=4327
  • Global Trade Watch. "Wood Articles; Solid Wood Packing." Public Citizen Web site, no date.
    http://www.citizen.org/publications/release.cfm?ID=6820
  • Lori Wallach & Michelle Sforza. Whose Trade Organization? Corporate Globalization and the Erosion of Democracy. Washington, DC: Public Citizen, 1999.
    "Threat 5: Hong Kong Complains About U.S. Anti-Invasive Species Rule at WTO," pp. 38-39, 63.
    http://www.citizen.org/publications/release.cfm?ID=7081
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Electronics-Industry Pollution Controversy

Raised by: U.S.
Directed against: EU
Discussed: 1999. Formal WTO discussions and dispute-settlement procedure not initiated.

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In 1999 the U.S. State Department, acting at the behest of the American Electronics Association, sent an official message to the European Union Directorate General of Trade suggesting that a European proposal to control electronics pollution was WTO-illegal. The U.S. argued that the EU proposal's restrictions on trade in certain heavy metals used to manufacture electronics products were more restrictive than necessary to satisfy its objective and were not based on international standards. U.S. environmental groups, however, supported the E.U. proposal for holding the electronics industry to a high standard on pollution.

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Resources

  • Lori Wallach & Michelle Sforza. Whose Trade Organization? Corporate Globalization and the Erosion of Democracy. Washington, DC: Public Citizen, 1999.
    "Threat 1:U.S. Pressures EU to Abandon High Standards for Curtailing Electronics Industry Pollution," pp. 30-31.
    http://www.citizen.org/publications/release.cfm?ID=7081
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Lead Compounds Controversy

Raised by: U.S.
Directed against: Denmark
Discussed: 1999. Formal WTO discussions and dispute-settlement procedure not initiated.

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Denmark notified the European Community that it intended to ban some 200 lead compounds from paints and other chemicals. The basis for the ban was that lead compounds have been shown to cause brain damage in young children. In 1999, the U.S. threatened to challenge Denmark in the WTO if it implemented the ban.

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Resources

  • Paul Brown. "Danes Fear Bid to Block Ban on Lead." London: The Guardian, May 3, 1999.
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AIDS Drugs Controversy

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Opinions

"Concerned about the situation in which one third of the world's population has no guaranteed access to essential drugs, in which new world trade agreements may have a negative impact on local manufacturing capacity and the access to and prices of pharmaceuticals in developing countries" … nations must "ensure that public health rather than commercial interests have primacy in pharmaceutical and health policies and to review their options under the Agreement on Trade Related Aspects of Intellectual Property Rights to safeguard access to essential drugs."

—Executive Board of the World Health Organization, a body of the United Nations

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"What we must see now is pressure being brought on the WTO to change the trade rules which prevent poor people buying life-saving medicines."

—Justin Forsyth, Oxfam, U.K.

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"Brazil is showing that no one who dies of AIDS dies of natural causes. Those who die have been failed — by feckless leaders who see weapons as more alluring purchases than medicines, by wealthy countries (notably the United States) that have threatened the livelihood of poor nations who seek to manufacture cheap medicine and by the multinational drug companies who have kept the price of antiretroviral drugs needlessly out of reach of the vast majority of the world's population.."

"Brazil, by defying the pharmaceutical companies and threatening to break patents, among other actions, has made drugs available to everyone who needs them. Its experience shows that doing this requires something radical: an alteration of the basic social contract the pharmaceutical companies have enjoyed until now."

—Tina Rosenberg, New York Times Magazine

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"The [drug] companies counter [criticisms] with an economic argument: these [anti-AIDS] drugs would not exist if not for the monopoly profits that finance research and development. But there are other ways to fund this research—in fact many of most expensive new drugs were discovered with the help of public funds."

"From a strictly economic point of view, a patent monopoly is a very inferior means of financing research. A basic principle of standard microeconomics is that the price of a good should be equal to the cost of producing an additional unit. Monopoly pricing, especially at 15 or 20 times the cost of production—is enormously wasteful and inefficient. And in the case of essential medicines, the toll of this inefficiency is measured in human lives."

—Mark Weisbrot, co-director, Center for Economic and Policy Research, U.S.
...

Raised by: U.S. & international pharmaceutical industry
Directed against: South Africa, Thailand and Brazil
Discussed: From at least 1998 to present. No formal WTO discussions and dispute-settlement procedure was initiated.

The United States and the international pharmaceutical industry have used the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to attack developing countries trying to develop their own AIDS drugs or using compulsory licensing and parallel importing, mechanisms that help obtain cheaper drugs. TRIPS requires most developing countries to implement patent protections by 2000, which has made public health problems worse by raising drug prices and reducing access for poor people. The poorest countries must implement patent protections by 2006, which will further exacerbate the problem.

Although TRIPS allows certain exceptions for public health reasons, the U.S. had threatened trade sanctions over this issue against South Africa and Thailand. But after anti-AIDS activists targeted the presidential campaign of then Vice President Al Gore, the Clinton administration backed off on some threats. It did, however, complain to the WTO about some provisions of Brazil's patent law allowing compulsory licensing of critical drugs. And in Thailand, U.S. pressure forced the government to disband its Pharmaceutical Review Board, which had dramatically reduced the price of AIDS drugs. The U.S. argued that the board was inconsistent with TRIPS.

In 1998, 39 pharmaceutical countries brought a lawsuit against South Africa's medicines act, which encourages generic drugs, compulsory licensing and parallel imports to provide cheaper and more available medicines. After an international campaign by non-governmental organizations and extensive negative publicity, the industry abandoned its case on April 19, 2001.

In response to a call for a debate by African member states, who said that TRIPS faced "a crisis of legitimacy," the WTO held a forum June 20, 2001 on "Intellectual Property and Access to Medicines" in WTO's Council on Trade-related Aspects of Intellectual Property Rights (TRIPS). Over 100 non-governmental organizations called for the meeting to adopt a moratorium on dispute-settlement actions on the issue, agree not to pressure developing countries to forgo their rights under TRIPS, and extend the deadline for implementing patent protections for the poorest countries. Most member governments described the meeting as a first step, and will consider whether to discuss the issue at the Doha ministerial in November.

Resources
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Baby-Food Trademark Controversy

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Opinions

"Idealizing its infant feeding products has been a trademark of Gerber since it first introduced its baby foods in 1928. In order to create an image of allure, charisma and trust for its products, it fathered the 'Gerber Baby' face to launch its first advertising campaign. The rest is history and the now famous face continues to seduce new parents to a product not in the least worthy of the irresistible expression. Exploitation by image is hardly a new concept; however, when this impacts negatively on the nutritional well-being of infants, those responsible for health care have an obligation to respond. In its historic International Code of Marketing of Breast-Milk Substitutes, the World Health Organization recognized the potential for harm when it structured its labelling requirements for breast milk substitutes: 'neither the container nor the label should have pictures of infants, nor should they have other pictures or text which may idealize the use of infant formula.' …"

"Under the rules of trade agreements such as the World Trade Organization countries retain autonomy to regulate health and consumer standards. Yet even these rules will give way to bully tactics when large global corporations with compliant governments use their economic and political power to undo regulations that exist to protect the health of the most vulnerable of citizens. Even the Canadian government under the NAFTA agreement refuses to implement regulations protecting infant and young child nutrition by not demanding International Code compliance by the infant food industry."

—INFACT (Canada)
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Raised by: U.S.
Directed against: Guatemala
Discussed: 1993 - 1995. No formal WTO dispute-settlement procedure was initiated.

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This dispute on the marketing of infant formulas and baby food was initiated against Guatemala at the behest of Gerber, the U.S. baby-food producer. A million and a half infants die each year in poor countries, primarily from diarrhea, because their mothers mix infant formula with unclean water. In 1983, Guatemala had passed a law based on the Code of Marketing of Breast Milk Substitutes drafted by the World Health Organization and UNICEF. The law was successful in reducing infant mortality rates, and UNICEF cited it as a model.

The Guatemalan code was non-discriminatory in trade terms because it made no distinction between foreign and domestic producers of breast-milk substitutes. All other foreign and domestic suppliers changed their packaging to comply with the law. But Gerber refused to comply by removing its "Gerber Baby" from its packaging, negotiating for years with the Guatemalan Health Ministry. Ultimately an administrative tribunal agreed with the ministry that the image violated the law, which prohibits packaging that might associate formula or baby food with healthy, fat babies in the eyes of illiterate parents.

In 1993, the firm filed a complaint with the U.S. Trade Representative asserting that the code violated international trademark protections: it said in effect that its intellectual property right to use its chubby baby logo trumped Guatemala's right to protect its mothers and infants. Finally in 1995, under threat of a WTO challenge by the U.S. State Department, Guatemala changed its law to allow labelling of imported baby food products that violates WHO/UNICEF guidelines. For multinational corporations and rich countries, this case established a precedent for using the WTO to undermine public-health standards in poor countries.

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Resources

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Traditional Medicines Controversy

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Opinions

"Thailand is strongly against the use of patents on biotechnology and the patenting of different types of plants. The large industrialized nations are able to take advantage of the less industrialized nations by exploiting different varieties of plants and herbs that have been produced for centuries by these countries. Thailand is worried that large corporations are profiting from the knowledge and tradition of the poor farmers in these less industrialized nations."

—Royal Government of Thailand

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"We're not trying to stop commercial development and we're not challenging the principle of intellectual property rights. But we don't want to be taken advantage of any more. We pay a lot for drugs and we need to have some rules, some self-defence."

—Dr. Pennapa Subcharoen, Director, National Institute for Thai Traditional Medicine at the Ministry of Public Health

~

"Ten years ago, Thai NGOs discovered that Plao Noi, a local plant whose medicinal properties are inscribed in the ancient palm leaf herbalist books, was patented in Japan. It is a good medicine for ulcers and the Japanese extracted its active ingredient. Now, Kelnac—the patented product—has annual sales of 800 million baht ($20 million) for the sole benefit of Japan."

"More recently, Thai television featured a chronicle about U.S. researchers patenting the Map-30 protein from a native Thai bittergourd. Thai scientists were also researching it for its anti-HIV compounds. Once again, Thais are being pushed out of a market for a medicine derived from the country's indigenous biodiversity."

—Witoon Lianchamroon & Piengporn Panutampon, Third World Network, Malaysia

~

"The Convention on Biological Diversity also obligates parties to 'respect, preserve and maintain knowledge, innovations and practices of indigenous and local communities' relevant to biodiversity. And the International Undertaking on Plant Genetic Resources of the FAO provides for 'Farmers Rights.' Now under revision, negotiators are grappling with the task of devising legal and financial instruments to support farming communities in the ongoing development and conservation of the germplasm and technologies their ancestors cultivated collectively over many generations. The patenting of seeds, plants and animals would seem to conflict with these emerging legal principles, as well."

—Kristin Dawkins, Director of the Trade and Agriculture Program, Institute for Agriculture and Trade Policy, U.S.
...

Raised by: U.S.
Directed against: Thailand
Discussed: 1997. Formal WTO discussions and dispute-settlement procedure not initiated.

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On April 21, 1997, the U.S. State Department sent a letter to the Royal Thai Government regarding draft legislation in the Thai parliament that would grant protections to traditional medicines by allowing healers to register them. The letter stated: "Washington believes that such a registration system could constitute a possible violation of TRIPs and hamper medical research into these compounds." It requested answers to 11 questions, beginning with "What is the relationship of the proposal to the granting of patent protection in Thailand?" and ending with "Does the RTG envision a contractual system to handle relationships between Thai healers and foreign researchers in the future?"

The Thai legislation was motivated by a history of incidents in which foreign firms patented Thai plants and derivatives long used by Thai healers and farmers. In the '80s, Thai non-governmental organizations (NGOs) discovered that a Japanese firm had patented and was selling an extract of plao noi, a Thai plant traditionally used to treat ulcers. Later, U.S. researchers patented a protein from a Thai bittergourd. And Thai farmers feared that the U.S. firm RiceTec, which had already patented a variety of Basmati rice despite its origins in India and Pakistan, would take a similar approach with their native Jasmine rice.

In a June 30, 1997 letter to U.S. Secretary of State Madeleine Albright, over 200 NGOs and individuals from dozens of countries expressed "concern at the manner in which the United States government is intervening in the domestic affairs of numerous other nations regarding their intellectual property laws." Despite the need for signatory governments to conform to international agreements, they wrote, it is neither "the United States' responsibility nor its right to interfere with their national democratic processes for doing so." They suggested that the State Department's letter to Thailand evidenced an interest in the transfer of traditional Thai knowledge to U.S. researchers and its subjection to U.S. patents

In related cases, the U.S. has filed formal complaints with the WTO against India (see Plant and Animal Patents Case) and Pakistan, has unilaterally imposed retaliatory import duties against Argentina, and has threatened Ecuador with cancellation of trade preferences in disputes over patent laws.

In a subsequent 1998 case, the Thai government requested the return from a British university laboratory of over 200 strains of marine fungi taken from Thailand for a research project sponsored by a pharmaceutical company.

In a 1999 statement, the Royal Government of Thailand continued to oppose the United States on this issue: "United States allows plants, animals or even human genes to be patented under U.S. law. However, the Royal Government of Thailand refuses to agree that biotechnology can be or should be patented."

See also Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

See also "You must treat life forms and life-saving drugs as commodities" (intellectual property).

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Resources

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By Peter Costantini ~ Seattle ~ November 2001
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