Pop Parliament TRIPS up Pro-industry agreements, dampens emerging markets

Flushed from their success in blocking the Anti-Counterfeiting Trade Agreement (ACTA), key political groups from the European Parliament's are now turning their attention to other EU trade agreements that might threaten access to medicines in emerging markets and developing countries. Representatives of three separate European parliamentary groups have told Scrip that they would be looking out for anything in European Commission proposals on trade that might limit poorer nations' access to healthcare products, including so-called TRIPS Plus measures.

This will disappoint many pharmaceutical companies which, judging by their recent Q2 2012 results, continue to look to emerging markets for revenue growth (scripintelligence.com 28 July 2012, 26 July 2012, 26 July 2012, 25 July 2012).

It will also frustrate pharmaceutical industry bodies in Europe which have been expecting the European Commission to continue pushing through tighter intellectual property protection within bilateral or multilateral free trade agreements with emerging economies.

The European Parliament gave a resounding "No" to ACTA, voting 478 to 39 against the agreement, with 165 abstentions. This marked the first time that Parliament had exercised its right – granted under the Lisbon Treaty - to reject a trade agreement (scripintelligence.com, 5 July 2012). While another wholesale rejection of an agreement may be unlikely, the European Commission now knows that it must pre-emptively address the elected body's concerns if it is to get Parliament's endorsement for its proposals on free trade. And that means preserving access to medicines and potentially avoiding TRIPS plus measures.

Parliament is now keeping a close eye on the Commission's activities. A source close to the Parliament's international trade committee told Scrip that the second largest political group in the parliament, the centre-left Progressive Alliance of Socialists and Democrats (S&D), will look very carefully at any trade agreement and will "measure it in the same way it measured ACTA – including the issue of access to medicines."

"There is a huge majority in our group that says anything that could endanger the transit or availability of medicines should be rejected, whether it is in legislation or international trade agreements," Scrip's source continued. "For our group, anything that is TRIPS Plus and might negatively touch on the availability of generic medicines will be judged very critically and there will be strong opposition."

The third largest grouping in the Parliament, the centrist Alliance of Liberals and Democrats for Europe will also oppose measures that might threaten access to medicines in poorer countries. Simona Mignozzi, the assistant to Niccolò Rinaldi, an Italian MEP who sits on the International Trade Committee, told Scrip that "The international trade committee plays a crucial role in ensuring that dubious provisions do not end up in the final texts of any trade agreement."

Mr Rinaldi believes intellectual property rights are very important for the EU industries, and that European companies, including pharmaceutical companies, could benefit from TRIPS Plus measures, said Ms Mingnozzi. Nevertheless, she added that he would not agree to any provisions that could block access to medicines. "When negotiating with developing countries, the EU must be very careful."

Perhaps least surprisingly, the environmentalist factions in the Parliament are also opposed to TRIPS Plus measures. Amelia Andersdotter, a Swedish MEP from the Greens/European Free Alliance, said she hopes that ACTA will inspire a deeper debate about intellectual property rights. Her party is critical of the TRIPS agreement itself, saying it was not a constructive framework for balancing the interests of rights holders and society. "I know the EU is pushing very hard for the pharmaceutical industry interests to be protected in the EU-FTA. I don't like that."

While none of the groups on their own represents a majority of MEPS in the European Parliament, a left wing alliance could block conservative pro-industry proposals.

ACTA

ACTA was mired in controversy from the beginning. As a trade treaty, it could be and was negotiated behind closed doors, fuelling accusations of secrecy. The chief concerns about the agreement related to online freedom violations, but other worries surrounded the overly broad definition of "counterfeiting" and onerous border enforcement measures that could lead to the seizure of legitimate generics by customs officials over trademark issues.

After publishing a damming report advising that ACTA be rejected, David Martin, the ACTA rapporteur for parliament's international trade committee, told Scrip that there was a "potential threat" that ACTA would impede access to generics (scripintelligence.com, 19 April 2012). S&D vice-president Véronique de Keyser also spoke out about its possible impact on access to generic medicines: "One of the dangers of ACTA, as it stands, is the risk of undermining access to generic medicines by developing countries. Under ACTA, customs officials would be able to seize products with labels similar to trademark brands," she said.

Parliament's outright rejection of ACTA is likely to be a one-off occurrence. While the Lisbon Treaty gave Parliament a say in trade agreements, its timing meant that Parliament had no input into the drafting or revision of ACTA. MEPs, including Mr Rinaldi, had urged the European Commission to involve Parliament in drafting, and subsequently criticised the Commission for its lack of transparency, but to no avail. All of which left MEPs only one opportunity to make their voices heard - at the final stage of ACTA's political journey, the Plenary Parliamentary vote.

After Parliament threw out ACTA, the Commission acknowledged that it needed to listen more carefully if it was to avoid the rejection of other trade agreements. John Clancy, the Commission's spokesperson for trade, put it thus: "The European Commission fully respects the European Parliament's vote on ACTA. It is only normal that we take into account this decision in our on-going trade negotiations."

Parliament's critics have accused it of populism of ACTA. Stuart Adams, Partner and Global Head of Enforcement at specialist IP law firm Rouse, said that the ACTA vote was a prime example of parliamentary muscle-flexing. "It's impossible to say exactly when this behaviour is going to be repeated. But I think it is pretty safe to infer that when the [Parliament] sees an opportunity to do something populist, it will. And if [it] feels, rightly or wrongly, that it has not been sufficiently consulted before an agreement has been 'concluded', then it won’t hesitate to throw a spanner in the works…especially if it believes that doing so will be a vote winner," he said.

So the question now is, how will other free trade agreements proceed in the light of the parliament's new found influence?

In tomorrow's ScripIntelligence, Francesca Bruce will look at the changes to the EU approach that the Parliament's intervention over ACTA has engendered and ask how this might change the nature of negotiation in forthcoming free trade agreements.