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Tuesday August 14, 2012 |
Appeared
in the Toronto Star on August 12, 2012 as Billions at Stake if
Canada Caves on Drug Patent Demands
The negotiations over a Canada - European Union trade agreement may
be approaching the final stretch as both sides say they plan to wrap
up the CETA talks by the end of the year. The parties have
apparently reached agreement on roughly 75 per cent of the text, but
the last quarter will require significant political compromise.
Canadian negotiators recently advised that there remains a sharp
divide over issues such as investment rules, financial services, and
taxation. Given the ongoing European financial crisis, these issues
are particularly sensitive and will raise questions about how much
risk the government is willing to assume in order to strike a deal.
The most contentious issue, however, is likely to be the
intellectual property chapter. The revelation that provisions
from the Anti-Counterfeiting Trade Agreement may sneak their way
into CETA generated widespread headlines throughout Europe last
month with politicians and activists expressing exasperation at the
clumsy attempt to secretly revive an agreement that was roundly
rejected by the European Parliament.
The Canadian opposition to the chapter will come from European
demands for patent reforms that could result in billions in
additional health care costs due to higher pharmaceutical prices.
The pharmaceutical demands are one Europe’s top priorities, but
Canada has thus far refused to counter the EU proposals, creating a
stalemate that has dragged on for years.
Steve Verheul, the lead Canadian negotiator, said earlier this month
that the pharmaceutical demands are unlikely to be discussed during
the next two rounds of negotiations in September and October.
Instead, the issue will be bounced back to cabinet, with the
government ultimately making the decision on whether it is prepared
to cave to EU demands with the trade agreement hanging in the
balance.
The large pharmaceutical companies (known as Rx&D) insist that
the reforms will increase research and development investment in
Canada, yet past experience suggests that is unlikely to happen.
In the 1980s, the same industry lobbied for patent reforms that
provided new rights and longer protections. In return, it promised
to increase spending on research and development in Canada so that
it would rise to 10 per cent of total sales by 1996. A new report
from government's Patented Medicines Prices Review Board shows that
not only has that goal not been achieved, but the research and
development spending to sales ratio continues a decade-long decline,
hitting its lowest level since the 1987 reforms.
According to the
report (which is gathered from data supplied by the companies
themselves), theresearch and development to-sales ratio for
members of Rx&D was 6.7 per cent in 2011, down from 8.2 per cent
in 2010. The Rx&D ratio has now been less than the promised 10
per cent for the past nine consecutive years and is approaching its
lowest level since tracking began in 1988.
From a global perspective, Canada fares very poorly, ranking ahead
of only Italy as countries such as France, Germany, Sweden,
Switzerland, the U.K., and U.S. all enjoy greater expenditures. In
fact, the report notes that "several comparator countries, which
have patented drug prices that are, on average, substantially less
than prices in Canada, have achieved R&D-to-sales ratios well
above those in Canada."
Given 25 years of mostly failed targets, the rational approach is to
put a freeze on any further reforms at least until the industry
lives up to its commitments. But with the agreement shrouded in
secrecy - the government has steadfastly rejected calls to release
the draft text - it appears that the major health care decision will
be made behind closed doors with no public discussion, debate, or
access to the official text.
Michael Geist holds the Canada Research Chair in Internet and
E-commerce Law at the University of Ottawa, Faculty of Law. He can
reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.
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Wednesday August 08, 2012 |
Steve Verheul, the lead Canadian negotiator for the Canada - EU
Trade Agreement, provided an update on the CETA negotiations last
week on a call with civil society groups. I will provide an update
on the link between CETA and ACTA in part two tomorrow. This post
highlights several additional details coming out of the call. First,
new rounds of negotiations are scheduled for September 17 - 21 in
Ottawa, followed by a round of negotiation in Brussels from October
15 - 26. Both sides say they remain hopeful that an agreement
will be reached by the end of the year, though the call highlighted
many ongoing areas of disagreement.
Second, when asked about the lack of transparency associated with
CETA, Verheul confirmed that both the EU and Canada oppose the
release of the text until the agreement is concluded. He argued that
the draft text may create an inaccurate picture of where the
negotiations stand and that the most difficult issues are often
addressed via face-to-face discussions rather than with the exchange
of text.
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Thursday July 19, 2012 |
Last week's revelations
that the Canada - EU Trade Agreement's intellectual property chapter
draws heavily from the Anti-Counterfeiting Trade Agreement sparked
widespread media coverage across Europe (initial
post with links to coverage, more here,
here,
here,
here,
here,
here,
and here). After
initially refusing to comment, the European Commission, clearly
sensing the growing public pressure, provided a response
in which it claimed that the leaked February 2012 text was outdated
and that the Internet provider provisions in CETA (which had
mirrored ACTA) had been changed. While the initial response came via
Twitter, a more detailed statement was circulated to many Members of
the European Parliament and others. The statement included the
following:
- All FTAs negotiated by the EU, including CETA, contain
chapters on IPR enforcement. They are just one aspect of a
comprehensive approach. CETA is not different.
- The Commission fully respects the vote of the EP of the
European Parliament on ACTA and the IPR related text of CETA is
being reviewed in order to remove or adapt elements that are
considered problematic in the opinions and reports adopted by
European Parliament.
- The draft text of CETA of February 2012 (on which the press
comments are based) is outdated and reflects thinking at a time
before the ACTA vote in EP. It should come as no surprise that
certain provision resemble ACTA, which both Canada and the EU
had negotiated. In the meantime, negotiations have evolved and
the February 2012 text no longer represents the current state of
the negotiations.
- For instance, even before the ACTA vote in the EP, the
provisions on IPR enforcement on the internet had already
evolved. For instance, Articles 27.3 and 27.4 of ACTA, which are
considered problematic in the EP, are no longer reflected in
CETA.
- The final result of the IPR chapter of CETA is likely to be
very close to the IPR chapter of the Korea FTA, which was
endorsed by a broad majority in the Parliament, and which has
been in force for over a year now.
The European Commission statement not only confirms some changes in
CETA, but suggests that the final version will look like the EU
- South Korea Free Trade Agreement. This disclosure raises its
own set of concerns for both Europeans and Canadians. This posts
outlines six major areas of concern given the current uncertainty
with CETA, its linkages to ACTA, and the influence of the EU - South
Korea FTA.
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Thursday July 12, 2012 |
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Nigel Farage, a UK Member of the European Parliament, has tabled
a question to the European Commission that asks if it "will
undertake a revision of the EU-Canada deal to remove all proposals
similar to ACTA." Farage says that CETA should be thoroughly
revised to remove anything that would implement ACTA through the
back door.
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