"NO WTO" Human Banner Mass Protest at Old Navy
Nov. 20, 1999, San Francisco. SRBG helped RAN organize this anti-WTO rally at Justin Hermann Plaza, San Francisco, at which a human banner was formed, spelling out "NO WTO." From there, SRBG led the march down Market Street that culminated in a mass demonstration at Old Navy.

World Trade Showdown
Wide-ranging WTO summit will spotlight division, dissent
Robert Collier, Chronicle Staff Writer
Wednesday, November 24, 1999
©2000 San Francisco Chronicle

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/11/24/MN26HEA.DTL

It seemed like a great idea when the Clinton administration volunteered Seattle as the host city for next week's World Trade Organization summit meeting.

What better way to demonstrate to the American public the importance of international commerce than by showcasing the powerful yet little-known WTO?

The decisions that are made in Seattle -- and the three-year round of WTO negotiations that is expected to follow -- will determine nothing less than the rule book for the global economy of the 21st century.

But the summit is threatening to blow up in the administration's face.

It has become a lightning rod for critics on the left and right, nationally and internationally, and has caused bitter diplomatic tensions.

The summit has provoked an increasingly loud debate over the fast-evolving system of free trade, which backers say has brought a bonanza of business activity to the four corners of the globe but critics argue has impoverished millions in developing nations and has eroded democracy.

At the summit will be 5,000 dignitaries from the WTO's 135 member nations, spanning the spectrum from President Clinton to, it is expected, Cuban leader Fidel Castro.

In the streets, meanwhile, will be tens of thousands of protesters from labor, environmental and other groups who promise to raise a ruckus in full view of the media. Several thousand will come from the Bay Area, which has become a hotbed of anti-WTO activism.

``The WTO has become a target of grievances for everything that has gone wrong in the world in many decades,'' WTO Director-General Mike Moore, a former prime minister of New Zealand, acknowledged recently. ``If we were not a democratic institution, we'd rebrand ourselves and start again.''

On the agenda in Seattle is a new round of negotiations over such multibillion-dollar trade topics as biotechnology, intellectual property rights, agriculture, forestry and the services sector (which includes banking, insurance, telecommunications and e-commerce).

Most of the proposals are designed to spur greater trade and flows of investment by reducing tariffs and cutting government intervention in the WTO's member countries.

Beneath the agenda's seemingly bland surface, however, lies a diplomatic minefield.

Bitter conflicts over issues that get little attention from most Americans pit the United States against its own allies, rich nations against poor, and sometimes neighbor against neighbor -- all in complex, sometimes byzantine ways.

In agriculture, for example, the United States and other major food-exporting nations are fighting the European Union, Japan and South Korea over demands that they cut their enormous subsidies to farmers.

If the United States and the others prevail, U.S. agribusiness -- including California's -- could see a big increase in sales as the elimination of subsidies forces foreign farmers to raise their export prices. But the demands have sparked a raucous protest movement in Europe.

A nasty wrangle also is expected over labor rights.

The Clinton administration -- under pressure from the AFL-CIO and congressional Democrats -- is advocating that a study be done on the impact of trade on workers' rights. The plan is being fought tooth and nail by diplomats from low-wage Asian and Latin American nations who worry that it could lead to trade sanctions for rights violations.

When it premiered on New Year's Day 1995 as the beefed-up successor to the 47-year-old General Agreement on Tariffs and Trade (GATT), the WTO was hailed as sort of a combination of United Nations and World Court for trade -- the arbiter and enforcer of the hectic, mind-boggling process of globalization.

Unlike GATT, the WTO can judge trade disputes between nations and force the losers to change their domestic laws or pay large tariff increases.

Since the WTO's formation, international trade has grown by 37 percent, to $6.5 trillion last year, and 1.5 million new jobs have been created worldwide. Last week's landmark agreement between Washington and Beijing to speed China's entry will add the world's seventh-largest economy to the mix.

California also has seen rapid growth in trade, with the Bay Area now exporting more than $40 billion annually in goods, such as electronics and computers, and an unknown amount in services.

As a result, business interests are lobbying all-out in Washington, at the WTO's Geneva headquarters and in capital cities worldwide, in favor of a wide-ranging expansion of the WTO's powers.

They say that for the world economy to keep booming, tariffs must be cut further and new rules must be added to help regulate the fast-changing trade in technological products and services.

``The Bay Area stands to benefit more than any other region in the country from a successful WTO,'' said Sean Randolph, president of the Bay Area Economic Forum, a San Francisco-based alliance of local governments and corporations.

``Our unique strength is in knowledge-intensive industries -- information technology, computers, multimedia, telecom, medical technology, biotech -- which have an enormous and growing demand internationally. Unless the WTO opens up those markets, makes them more transparent and accessible, we won't gain the same advantage,'' Randolph said.

Despite the economic benefit to be had, some federal, state and local legislators worry that the WTO is undermining their lawmaking powers.

``Trade is essential for the Bay Area, so we all encourage it,'' said Rep. George Miller, D-Martinez. ``But the WTO's rules don't reflect the values of this country. It limits countries' rights to legislate against labor or environmental abuse, so it basically ratifies the right to use sweatshops, prison labor or child labor, or kill dolphins or use asbestos.''

So far, WTO rulings have forced the United States to weaken provisions of the Clean Air Act, the Marine Mammal Protection Act and the Endangered Species Act, while South Korea has lowered meat safety regulations, Australia has loosened up on tests of imported salmon, and India is lifting its ban on pharmaceutical patents.

The United States' ability to levy anti-dumping tariffs also is under fire. Last month, the WTO ruled in favor of a European Union complaint against U.S. anti-dumping sanctions on steel, and South Korea and Japan have filed similar complaints.

State and local laws also can run afoul of the WTO. In September, for example, Gov. Gray Davis vetoed the Buy California Act, a bill giving locally manufactured goods a 5 percent price preference for state and local government purchases, because he said it would violate WTO rules against such preferences.

The bill was supported by steel firms and labor unions, which said it would create thousands of new jobs in California.

``Under its current powers, the WTO dramatically constrains the ability of state and local governments to enact a wide variety of economic-development and environmental laws,'' said Robert Stumberg, a law professor at Georgetown University who is an expert on trade policy. ``The next round (of WTO negotiations) is likely to further limit those powers.''

The Clinton administration has been put on the defensive by the criticism, which threatens to undercut support among environmental groups and labor unions for Vice President Al Gore's presidential campaign.

In response, the administration has belatedly echoed the critics' charges that the WTO's extreme internal secrecy must be ended. Currently, all deliberations and records of trade disputes are closed to the public, and unlike the U.S. court system, nonparticipants are barred from filing friend-of-the-court briefs.

``The WTO has been treated for too long like some private priesthood for experts where we know what's right and we pat you on the head and tell you to just go right along and play by the rules that we reach,'' Clinton said last month.

``The world doesn't work that way anymore. If we want the world trading system to have legitimacy, we have got to allow every legitimate group with any kind of beef, whether they're right or wrong, to have some access to the deliberative process of the WTO,'' he said.

The talk about greater transparency faded quickly, as other nations criticized the U.S. proposal as a power play by American labor unions and protectionist groups. Administration officials have spent recent weeks busily backpedaling, trying to defuse the backlash.

Further clouding the prospects for success in Seattle, 14 months of talks in Geneva to prepare a common agenda for the summit collapsed yesterday because of bickering over a wide variety of issues. As a result, diplomats in Seattle will have only four days to hammer out an agreement for a new round.

Perhaps most surprising has been the formation of a firm bloc of developing nations led by Malaysia, India, Pakistan and Egypt, which are demanding tariff concessions and development aid.

``There's been tremendous disillusionment, frustration and bitterness that the material benefits promised to developing nations at the (WTO's previous) Uruguay Round haven't materialized,'' said Martin Khor, president of Third World Network, an influential Malaysian think tank, and an informal adviser to Prime Minister Mahathir Mohamad.

``There's been an increase in exports by rich countries, and imports into developing nations have grown,'' Khor said. ``The trade deficit of our countries is now 3 percent of gross national product, more than a decade ago, and there's a lower growth rate. As a result, most developing countries don't want a new round.''

Many poorer -- and smaller -- nations also say that they are being left out of the WTO's secretive negotiating process, in which the United States and a handful of other, influential nations hammer out many issues by themselves.

Business leaders warn that the dangers of a stalemate are large.

``If the Clinton administration doesn't compromise on the labor issue and if developing nations don't bend, too, there could be a deadlock in Seattle,'' said Thomas Niles, president of the U.S. Council for International Business, the principal American business lobbying group on trade.

``The stakes are too high for both the U.S. and world economies to let that happen,'' he said.


The summit in Seattle is intended to set the agenda for a three-year round of trade negotiations. But preliminary talks have deadlocked, and the new round may be postponed. At stake are the following issues:

Agriculture: Australia, the United States and other food-exporting nations are calling for the European Union and Japan to slash their subsidies to farmers because they lead to artificially low prices.

Tariffs: The United States and other nations are pushing for elimination of tariffs on forest products, fish products, chemicals, energy equipment, environmental goods, gems and jewelry, medical equipment and scientific instruments, and toys.

Services: The summit is expected to approve the continuation of an existing moratorium on Internet taxation. In addition, the United States is pushing for free-trade rules in the health industry -- a proposal that could force some nations to privatize their state-run health systems.

Intellectual property: African and some Asian nations are demanding partial exemption from tough WTO patent rules, which they say favor Western corporations at the expense of poor nations' ability to feed their people and treat health problems such as HIV/AIDS.

Implementation: Developing countries say they won't agree to a new round of trade talks until they get benefits they were promised from the previous round -- such as the elimination of textile quotas and broad promises of development aid.

Labor: The United States and the European Union want the WTO to study the effect of trade on labor rights; developing nations are vehemently opposed.

Genetically modified foods: Europe and Japan want broad latitude to exclude genetically modified foods and other biotech products on environmental or public-health grounds. The United States is fighting the proposals, which would affect much of U.S. food exports.

Transparency: The United States and many nonprofit groups have proposed an end to the WTO's secretive practices; the proposal is sinking under attacks by nations that say only governments should have access.


Nations can file complaints with the WTO's Dispute Settlement Body, which sets up panels of three experts -- usually academics or former trade diplomats -- to hear evidence and make rulings. The public has no access to the proceedings or documents, and only final rulings are disclosed. If a defendant nation loses, it must end its offending practices or else heavy trade sanctions will be levied. Since 1995, the panels have completed 31 rulings.

©2000 San Francisco Chronicle Page A1

World Trade Showdown
Activists, Industry Split Over AIDS Drugs / Manufacturers fight affordable access
Sabin Russell, Chronicle Staff Writer
Wednesday, November 24, 1999
©2000 San Francisco Chronicle

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/11/24/MN48SEA.DTL

At the Washington, D.C., headquarters of Ralph Nader's Consumer Project on Technology, Jamie Love is reveling in the global attention.

It was Love's office that first promoted the idea that costly AIDS drugs could be brought cheaply to poor countries by sidestepping pharmaceutical industry patents -- an idea that has recently caught fire.

``We were completely unsuccessful for five years on this thing,'' he said. ``Now, we're kicking ass.''

Understood by only a handful of advocates a year ago, the topic will be spotlighted next week at the World Trade Organization's conference in Seattle -- debated at meetings and championed in demonstrations on the streets outside.

Allied with AIDS activists and Doctors Without Borders (the recent winner of the Nobel Peace Prize), Love's organization developed a strategy to invoke little-known WTO rules that permit poor countries to manufacture drugs ordinarily protected by patents.

Drugmakers are alarmed. An internal memo by the International Federation of Pharmaceutical Manufacturers Associations, which was obtained by The Chronicle, warns that ``the current and foreseeable environment at the WTO is very dangerous for the R&D industry.''

The industry's own success in fighting AIDS in Western countries has highlighted the gap in access to drugs between have- and have-not nations.

Combinations of newly developed antiviral drugs have helped cut the U.S. AIDS death rate in half since 1996. But at a cost of more than $1,000 a month, such therapies are hopelessly out of reach for Third World countries, where 90 percent of the world's people with AIDS reside.

Buried in the WTO rules, say Love and other activists, are two tools that could bring low-cost drugs to the poor:

--``Compulsory licensing,'' which allows a country to force a drug company to license its patent to a local manufacturer.

--``Parallel importing,'' which permits poor countries to shop the international market for the lowest price drug, instead of paying the rate charged in their countries by companies that own the patent.

With this twin combination, hard-hit nations might produce their own AIDS pills and cut the prices they pay by more than 80 percent, advocates say.

However, drugmakers see these tactics as an assault on ``intellectual property'' protections, without which companies won't make the megabuck investments in research and development needed to discover new drugs for AIDS, tuberculosis, malaria and other global killers.

They want tighter limits on the use of compulsory licenses and are working toward a worldwide ban on parallel imports.

``We don't believe parallel importing is proper,'' said Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug-industry trade group. ``A lot of parallel imports come from places like India, and half the time there are no active ingredients. It's killing patients, causing drug resistance and giving false hope.''

Grayson said the issue is far more complex than simply marking down the prices drug companies charge.

``It's a question of governments making their choices,'' he said. ``South Africa just spent $3.5 billion on fighter jets from Europe. Just what are they protecting with those jets if they say they are going to lose half their country to HIV?''

But a summerlong hounding by AIDS activists of Vice President Al Gore at campaign appearances already has forced the Clinton administration to rethink its opposition to efforts by South Africa to cut the cost of its AIDS drugs.

As late as February, a State Department lawyer boasted in a memo to Congress of ``a full-court press'' to stop South Africa from adopting compulsory licensing of life-saving drugs. Drugmakers had sued in South African courts to block a law permitting the practice.

But by September, the drug companies had suspended their lawsuit and Washington agreed to stop threatening South Africa with trade sanctions -- acknowledging that the country was on firm ground under WTO rules.

Although South Africa has yet to carry out any plan to make cheaper AIDS drugs, Thailand's Government Pharmaceutical Organization said on November 12 that it intended to seek a compulsory license to make the AIDS drug ddI from patent-holder Bristol-Myers Squibb. The same WTO rules that permit compulsory licenses also require negotiation of royalties payments to the drug patent holder. Thailand would have become the first nation to take that step.

Dr. Tido von Schoen-Angerer, of Doctors Without Borders in Bangkok, said the goal was to produce ddI in Thailand for 66 cents a pill, instead of the $1.23 charged by Bristol-Myers Squibb. Thailand's bid was strengthened, he said, because ddI was originally developed by U.S. scientists at the National Institutes of Health.

``We have a situation here where a drug continues to be priced unaffordable to Thai people by a company that has not itself invented the drug. I call this profiteering,'' he said.

But within days of the Bangkok announcement, the effort to gain a license was suspended. The Thais instead are negotiating with Bristol-Myers to lower the price.

``We do not believe compulsory licensing is the way to go,'' said Bristol-Myers spokeswoman Jane Kramer.

The outcome of Thailand's dealings with the New York drug giant will be closely watched, for it may set a precedent for how developing countries can manage the manufacture of their own AIDS drugs, or determine what discounts drug companies are willing to give countries that can't afford Western prices.

At the WTO conference in Seattle, the activists will attempt to build on the momentum.

``This issue is not going to go away,'' said John James, who publicized Love's campaign in his San Francisco newsletter AIDS Treatment News. ``Ninety percent of the people in the world needing HIV medications are not able to afford them.''

At Seattle, it is unlikely that the rules governing compulsory licensing and parallel importing will be either strengthened or weakened. The U.S. position, which drug companies support, is that the rules governing these issues -- contained in an agreement called Trade Related Aspects of Intellectual Property Rights (TRIPS) -- should not be reopened for discussion.

But some nations still may push for modifications of TRIPS, which requires WTO members to comply with international patent laws by January 1. Venezuela, for example, wants the patent compliance rules suspended for ``essential medicines,'' a list of life-saving drugs compiled by the United Nations.

While the industry hopes to keep discussion of drug patents off the WTO agenda, the international drugmakers federation has laid out its positions should the matter arise. The goals include measures that would:

-- Make it more difficult for countries to shop for lower-priced drugs on the world market.

-- Make it harder for generic drugmakers to gain regulatory approval for their products.

-- Extend patent protection for new drugs ``delayed'' by drug approval processes.

-- Prevent countries from blocking patents of plants and animals.

-- Increase penalties for counterfeiting of patented drugs.

The group's internal memo also calls for strengthening WTO agreements ``in order to counter adverse consequences of government interventions intended to protect public health . . . or contain health care costs.''

PhRMA spokesman Grayson argues that intellectual property protection can advance public health goals and that pharmaceutical companies have a long track record of social responsibility.

``We've spent more than any other industry trying to get medical services to Africa,'' he said.

The drug manufacturers insist that there are no simple solutions to the international AIDS crisis. The triple-combination drugs that are saving lives in the United States and Europe require sophisticated laboratory tests to monitor the type of drug and dosage. Most poor countries do not even have the money to buy the simplest AIDS diagnostic tests.

Dr. Richard Laing, of the Boston University School of Public Health, said that bypassing patents won't begin to solve the drug access problem in the poorest countries. ``The vast majority of drugs on the World Health Organization essential-drug list are off-patent. Despite that, access remains poor.''

Laing said that if compulsory licensing is used by developing countries, it will make more sense to apply it to production of the most cost-effective drugs -- those that can cure rather than just control disease. For example, the anti-fungal drug fluconazole can cure a variety of diseases within a short time frame, whereas AIDS antiviral drugs work best only in three-drug combinations, have serious side effects and must be taken over a lifetime.

The sorry experience of tuberculosis control in developing countries also should give AIDS activists pause, said Laing. Although common TB strains can be cured by a combination of antibiotics costing $20 to $30, incomplete therapy can breed drug-resistant strains that respond only to drugs costing $2,000 to $3,000.

``If AIDS drugs are used badly, resistance will develop and people will transmit the resistant virus,'' he said.

AIDS activists, however, plan to keep the issue in the public eye during the Seattle conference. ``There will be teach-ins, lobbying and protests,'' said Sydney Levy, campaign director for the International Gay and Lesbian Human Rights Commission.

Promoters of lower-cost drugs to developing countries hope to persuade trade ministers to impanel a WTO working group to look into access to ``essential medicines,'' perhaps in concert with the U.N.'s World Health Organization.

AIDS activist Eric Sawyer, co-founder of the Health Gap Coalition and someone whose life has been saved by antiviral drugs, typifies the passion that is driving American AIDS activists to the international arena. At AIDS conferences, he has sat side by side with activists from developing countries who do not have the same access to antiviral drugs.

``I watch them die in front of my eyes. It rips me apart,'' he said.

As a prominent international activist, Sawyer gets e-mails from colleagues overseas begging for supplies of the triple-combination drugs. ``I have to say, `I wish I could help you, but I can't.' ''


Drugs that treat HIV and the many opportunistic infections of AIDS are extraordinarily expensive, but their cost varies from country to country. Below are some cost comparisons for commonly used AIDS drugs. (Price for 100 units in U.S. Dollars(x))

(x) In countries where multiple brands are available, only lowest price is listed Source: Health Action International, Drugstore.com, Chronicle Research

                                              South  Burkina   
                               USA  Germany   Africa   Faso   Nicaragua  India  
        (100 mg AZT)          $147    $278     $110     $55     $220     $42    
       (Crixivan 400mg)        224     272      n/a     274      n/a     n/a    

       (Epivir 150 mg)         377     524      455     158      n/a     115    
       (Fluconazole 150 mg)  1,124   1,535    1,740   1,275      646      55

©2000 San Francisco Chronicle Page A1

Wednesday, November 24, 1999
©2000 San Francisco Chronicle

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/11/24/MN28592.DTL

It was formed Jan. 1, 1995, as successor to the General Agreement on Tariffs and Trade (GATT), which since 1947 had regulated tariffs worldwide. The WTO's 23,000 pages of agreements regulate the following subjects:

Tariffs on trade in manufactured goods and agriculture:

Key principles include ``national treatment,'' which requires member nations to regulate imported goods in the same way as domestic goods; ``most favored nation,'' which obligates nations to give equal treatment to all other member nations; and elimination of quotas, such as requiring the United States to end its politically sensitive apparel and sugar quotas by 2005.

Services: Rules force nations to open their banking, insurance and telecommunications industries to foreign competition. U.S. firms have benefited greatly.

Intellectual property: Copyrights, trademarks and patents are crucial for the U.S. computer, software, entertainment and biotechnology industries, which lose billions of dollars each year from pirated goods.

Food: The Sanitary and Phytosanitary Standards (SPS) agreement covers food safety issues from pesticide regulations to product labeling and genetically engineered foods. Critics say SPS rulings undermine safety standards -- for example, a ruling this year against the European Union's ban on hormone-treated U.S. beef.

Government purchasing: The WTO bans nations and their states or provinces from giving preference to local industries in government purchasing of goods and services. In September, as a result, Gov. Gray Davis vetoed a bill to give preference to California-made and U.S.-made goods in state and local procurement.

©2000 San Francisco Chronicle Page A1

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