2. The Issues
22. This section briefly sets out the issues surrounding acceptance by New Zealand of the Protocol amending the TRIPS Agreement so as to implement the Doha Declaration. This discussion will focus on the following points:
- The effect of accepting the Protocol on New Zealand's TRIPS Obligations;
- Potential benefits and costs to New Zealand in accepting the Protocol;
- Potential benefits and costs to New Zealand of not accepting the Protocol.
2.1 TRIPS Obligations Under the Protocol
23. Under the Protocol Members are required to take reasonable measures to prevent the importation and sale of products produced under the provisions of the protocol, where these products were not produced for sale in the Member. This is to ensure that products are not "diverted" from the markets they were originally produced for. If diversion was not prevented, the owner of the patent over the products in the Member concerned could be unfairly disadvantaged.
24. The protocol makes it clear that Members can achieve this obligation using measures already required to be available under other parts of the TRIPS Agreement. As New Zealand's legislation already contains such measures, it is expected that no further legislation will be required. Measures currently available include the border protection provisions in the Copyright and Trade Marks Acts. In addition, patent owners can use the infringement provisions in the Patents Act to take action against any products "diverted" from their proper markets.
25. Importing Members are also obliged to prevent the re-export of any products imported under the Protocol. However, like all other developed Members, New Zealand has indicated to the WTO that it will not use the Protocol as an importing Member.
26. The Protocol recognises that eligible importing Members who are also developing countries may have difficulty in implementing the provisions relating to the prevention of diversion. In such cases there is an obligation on developed country Members to provide technical and financial assistance to facilitate implementation in the developing country, but only on request and under mutually agreed terms and conditions.
27. Technically, acceptance of the Protocol would not, of itself, require New Zealand to make any legislative amendments. As described below, however, acceptance without making any legislative amendments would render acceptance meaningless, and is not considered a viable option.
2.2 Benefits and Costs of Acceptance
28. The advantages of acceptance are likely to include the following:
- acceptance would show that New Zealand is a "good international citizen";
- acceptance would allow New Zealand to use the provisions of the amendment as an exporting Member.
29. The intention of the Protocol is to allow WTO Members to issue compulsory licenses for the production for export of pharmaceuticals to developing countries which are suffering public health problems, and have no or insufficient pharmaceutical manufacturing capacity. It is important that WTO Members, particularly poorer countries, have access to the pharmaceuticals they need to deal with public health issues, at prices they can afford, and that they can make full use of the flexibilities available under the TRIPS Agreement. By accepting the amendment to the TRIPS Agreement, New Zealand would be affirming its commitment to this principle and confirming New Zealand as a "good international citizen".
30. Following the 2005 Decision, the then Trade Negotiations Minister, Hon Jim Sutton, applauded the decision. In his press statement, the Minister observed that "New Zealand has strongly supported efforts to reach a permanent solution" and described the decision as sending "a strong message of commitment to the development objectives of this trade round." Welcoming the legal certainty this decision offered following the August 2003 political decision, Mr Sutton commented that "a consensus decision carries special moral force."
31. For the Protocol to achieve its purpose of assisting developing countries to get access to medicines necessary for public health purposes, countries that can produce pharmaceuticals at affordable prices need to be able to export them. This provides New Zealand with an opportunity to use the provisions of the Protocol as an exporting country. This could be of commercial benefit to New Zealand pharmaceutical manufacturers. They would be in a position to offer to produce pharmaceuticals under compulsory licenses issued in accordance with the Protocol.
32. There appear to be no obvious disadvantages of acceptance. If it were decided that New Zealand should accept the Protocol as an exporting country, some legislative amendment would be required, but no other government action would be needed.
33. There would be no obligation on New Zealand to manufacture pharmaceuticals for export under a compulsory license granted under the Protocol. Any decision to manufacture pharmaceuticals in New Zealand under such a license would be a commercial decision made by the manufacturers concerned.
2.3 Non-Acceptance
34. There would appear to be no particular advantages to New Zealand in not accepting the Protocol.
35. There are, however, possible disadvantages to New Zealand should we not accept the Protocol. In December 2005 the WTO unanimously endorsed the Protocol and New Zealand played an active role in negotiating the waiver which forms the basis of the Protocol. In light of this, non-acceptance might suggest that New Zealand had negotiated in bad faith. In addition, non-acceptance would prevent local generic pharmaceutical firms from using the regime established by the Protocol as an opportunity to produce pharmaceuticals for export.
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