The creation of the World Trade Organization (WTO) was made for the purpose of ensuring a "single undertaking approach" to the results of the Uruguay round. These results take the form of a single package which includes a revised text of the general agreement on tariffs and trade (GATT), a general agreement on trade in services (GATS), an agreement on trade-related aspects of intellectual property rights (TRIPS), plus a number of legal instruments totalling 25 in number.
TRIPS is the agreement which has had the most impact on the pharmaceutical industry. It was motivated by a desire to reduce distortion in the conditions of international competition resulting from widely varying standards in the protection and enforcement of intellectual property rights and the lack of a multilateral framework of principles, rules and disciplines to deal with international trade in counterfeit goods. The TRIPS will be implemented in a period ranging from one to ten years, depending on the degree of development of a country. Almost all Arab countries are signatories to the agreement. Subject to limited exceptions, WTO members must abide by national treatment obligations and treat nations of trading partners on the same basis. The agreement specifies minimum substantive standards of protection, building on those agreed in the Paris and Berne conventions. While requiring great discipline from Arab countries, the TRIPS agreement has the benefits of establishing equal standards for all countries, thus avoiding the situation where developed countries will be subject to strict protection standards from Arab countries.
The most important gain for Arab countries will be better access to advanced technologies. Such access is essential if Arab countries are to foster new industries that can compete in international markets. The disciplines of the agreement are thus essential if foreign companies are to make a meaningful transfer of technology to Arab countries, thus paving the way for the partnerships between intellectual property from developed countries and the raw materials and labour from the developing countries. These technologies cannot continue to be counterfeited. High technology companies must be allowed to install local manufacturing plants and share know-how with local producers, knowing that their ideas are protected when doing so. Consequently, under the agreement, exporters will be able to protect their brand names and image. This enhanced protection will enable them to develop new markets with confidence. The new rules will promote creative innovation and safeguard the value of intellectual property investments. The global coverage of these rules should give a boost to trade in technology-intensive products.
The TRIPS agreement has the potential to protect consumers in the Arab countries from counterfeit goods. A framework can be created which is more conducive to domestic research efforts and to technology transfer and foreign direct investment. Better access to the world market under the umbrella of protection of intellectual property rights will further open up the incentive to invest in research and development. The Pharmaceuticals industry in Arab countries is worth in excess of one billion dollars. It depends mainly on formulations of generic drugs based on the drugs which are patented in their country of origin. In only a few Arab countries do existing laws provide patent protection to both the process and the product. This lack of rigour has enabled the local generics industry to formulate drugs that can be sold at lower prices compared to patented drugs. This situation benefits low-income countries and saves on drug bills of health institutions and in some Arab countries these preparations are even given trade names. Local production of Pharmaceuticals ranges from 15 % to 90% depending on the country.
Other agreements are currently under discussion with some Arab countries which could also affect property rights. The European Union is negotiating with some Mediterranean countries to broaden cooperation. One of the proposals is that protection of property rights takes force within two years of ratification. This agreement would require implementation of the Madrid agreement, concerning registration of trademarks. As yet another example, the United States insists that its regulations be followed in agreeing to any bilateral agreements for aid. In many cases, these agreements are more strict than the TRIPS requirements, in particular with regard to the transitional period.
Although the outcome of the TRIPS agreement is difficult to evaluate, it could create a possible scenario whereby prices of many drugs will be higher, with repercussions on the health status of populations in developing countries with scant resources. Countries will no longer have control over drug prices through subsidies, tariffs or duties. National drug policies which depend on essential drugs or encourage the local pharmaceutical industry will be under threat and there will be a loss of control over access to drugs, marketing practices and consumer protection. The agreement may undermine public sector intervention in trade and industry and countries which carry out centralized procurement will be highly affected. Local production can be expected to regress to a 50% maximum.
In order to alleviate possible negative consequences of the situation, the Arab countries would be recommended to:
1. Utilize the transitional period to develop a market among Arab countries and encourage locally- manufactured products.
2. Allocate part of the income generated by industry for combined research and to support companies or countries within the region.
3. Utilize the competition between giant economic blocks, and enter into mutual agreements to manufacture patented drugs offering local cheap manpower as an incentive.
4. Utilize the exemptions set out in the TRIPS agreement concerning life-saving drugs and herbal preparations, by developing these groups of product.
5. Establish a legal service specializing in patent rights to give advice and defend the position of its members.
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