[Congressional Record Volume 150, Number 103 (Thursday, July 22, 2004)]
[House]
[Pages H6569-H6579]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONSIDERATION OF H.R. 4842, UNITED STATES-MOROCCO FREE
TRADE AGREEMENT IMPLEMENTATION ACT
Mr. LINCOLN DIAZ-BALART of Florida. Mr. Speaker, by direction of the
Committee on Rules, I call up House Resolution 738 and ask for its
immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 738
Resolved, That upon the adoption of this resolution it
shall be in order without intervention of any point of order
to consider in the House the bill (H.R. 4842) to implement
the United States-Morocco Free Trade Agreement. The bill
shall be considered as read for amendment. The bill shall be
debatable for two hours equally divided and controlled by the
chairman and ranking minority member of the Committee on Ways
and Means. Pursuant to section 151(f)(2) of the Trade Act of
1974, the previous question shall be considered as ordered on
the bill to final passage without intervening motion.
Sec. 2. During consideration of H.R. 4842 pursuant to this
resolution, notwithstanding the operation of the previous
question, the Chair may postpone further consideration of the
bill to a time designated by the Speaker.
[[Page H6570]]
The SPEAKER pro tempore. The gentleman from Florida (Mr. Lincoln
Diaz-Balart) is recognized for 1 hour.
Mr. LINCOLN DIAZ-BALART of Florida. Mr. Speaker, for the purpose of
debate only, I yield the customary 30 minutes to the distinguished
gentlewoman from New York (Ms. Slaughter), pending which I yield myself
such time as I may consume. During consideration of this resolution,
all time yielded is for the purpose of debate only.
(Mr. LINCOLN DIAZ-BALART of Florida asked and was given permission to
revise and extend his remarks.)
Mr. LINCOLN DIAZ-BALART of Florida. Mr. Speaker, House Resolution 738
is a standard, closed resolution for consideration of the underlying
trade legislation that provides for fair and extensive debate on H.R.
4842, the United States-Morocco Free Trade Agreement Implementation
Act.
The rule provides 2 hours of general debate evenly divided and
controlled by the chairman and the ranking minority member of the
Committee on Ways and Means.
Mr. Speaker, the relationship between the Kingdom of Morocco and the
United States of America has existed throughout the history of the
United States. In December of 1777, when war raged between the American
colonies and Britain, Sultan Sidi Mohammed boldly recognized our young,
and not yet free, Republic. That magnanimous act of recognition was
cemented in a Treaty of Peace and Friendship between our countries,
ratified in July of 1878. That enduring document remains the oldest
unbroken treaty in the history of the foreign relations of the United
States. Quite simply, the Kingdom of Morocco is our most permanent and
enduring friend.
The gentleman from Pennsylvania (Mr. English), the gentleman from
Tennessee (Mr. Tanner), the gentleman from Louisiana (Mr. John), and I
came together to form the Morocco Caucus in Congress to highlight and
to further deepen the truly magnificent and critically important
relationship between the United States and the Kingdom of Morocco. The
United States has no better friend and ally in the Maghreb, in North
Africa and in the Arab world than Morocco.
We are cognizant of, and grateful for, the help Morocco provided
during the reign of the great statesman King Hassan II in the dangerous
and prolonged struggle known as the Cold War and in the initial and
ultimately delicate stages of the peace process between Israel and her
neighbors.
We are cognizant of, and grateful for, the unequivocal and decisive
help Morocco has provided during the reign of another great statesman,
King Mohammed VI, in our common war against the forces of international
terrorism. Both our peoples have been victims of the scourge of
cowardly attacks upon unarmed civilians, and both nations have answered
the challenge of this difficult time with strong leadership and
decisive action.
The United States must be cognizant and supportive of the wisdom and
experience of Morocco, that great influence for stability in North
Africa, in the Middle East, regarding issues related to international
terrorism. We must understand that Morocco's insistence upon its
territorial integrity and its refusal to accept a terrorist state in
the Western Sahara is critically important, not only for the national
security of Morocco, but also for the security of the United States and
of our European allies.
Today, Mr. Speaker, we celebrate another milestone in the wonderful
relationship between the United States and Morocco as we prepare to
consider H.R. 4842, legislation to implement the United States-Morocco
Free Trade Agreement. This agreement will benefit both our peoples as
it facilitates and encourages ever-growing commerce between our
countries and the creation of many new jobs in Morocco and in the
United States. This agreement will help turn an already solid
relationship into an even greater friendship.
Mr. Speaker, I would like to take this opportunity to publicly thank
a few distinguished leaders for making this important free trade
agreement a reality.
{time} 1145
Understanding the importance of this agreement and with the August
recess quickly approaching, the gentleman from California (Mr. Thomas)
made great efforts to expedite the consideration of this agreement in
the House. The gentleman from Illinois (Speaker Hastert) has been
especially solid in his leadership on this critical issue, as has been
the gentleman from Texas (Mr. DeLay), the majority leader, and the
gentleman from California (Mr. Dreier), chairman of the Committee on
Rules. Ambassador Bob Zoellick has been and continues to be a stalwart,
strong advocate on behalf of the economic interests of the United
States and especially job creation in America, and President Bush's
leadership has truly been the linchpin for great accomplishments such
as this.
While we fight terror across the globe, the United States, under this
President, has deepened economic and security-based relationships with
our friends for the benefit of our protection and our freedom.
Mr. Speaker, I urge my colleagues to support both the rule and the
underlying legislation that we bring before the House today.
Mr. Speaker, I reserve the balance of my time.
Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may
consume.
(Ms. SLAUGHTER asked and was given permission to revise and extend
her remarks.)
Ms. SLAUGHTER. Mr. Speaker, I thank the gentleman from Florida (Mr.
Lincoln Diaz-Balart) for yielding me the customary 30 minutes.
Mr. Speaker, an important part of our job is to encourage the
purchase of U.S. goods and services by others in the international
community, especially now when the economy is limping along and failing
to replace the 1.1 million jobs lost since the Bush administration took
office. Hopefully opening up foreign markets for American products will
lead to the creation of good, high-paying jobs here in the United
States. However, we must be mindful of the consequences of free trade
agreements such as the U.S.-Morocco Free Trade Agreement.
Last week this body considered the free trade agreement, FTA, between
the United States and our ally Australia. Serious questions were raised
about the impact patent protection language might have on the ability
of the United States to reimport lower cost drugs from other countries
and the impact on the Australian government's low-cost pharmaceutical
drug program.
According to the Wall Street Journal, urged by the drug industry, the
U.S. Trade Representative is seeking to strengthen protections for
costlier brand-name drugs, defending the U.S. companies from foreign
competition of foreign producers of generic drugs. So far the USTR has
successfully added this safeguard to the trade agreements with Jordan,
Chile, Singapore, Australia, Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, Dominican Republic, and Morocco.
The U.S.-Morocco agreement contains patent protection language which
restricts Morocco for 5 years from approving generic-drug applications
if the application is based on the data of the original manufacturer.
What impact will this 5-year ban have when enforced? Will this
interfere with a developing African nation's ability to get affordable,
generic pharmaceuticals to fight public health crises like the HIV
infection?
In response to these serious concerns, the USTR points to a letter of
understanding between the United States and Morocco. In the letter,
both countries agree that the patent provisions ``do not affect the
ability of either country to take necessary measures to protect public
health by promoting access to medicine for all, and in particular
concerning cases such as HIV/AIDS, tuberculosis, malaria, and other
epidemics as well as circumstances of extreme urgency or national
emergency.''
This mutual understanding is promising. However, it is not directly
part of the free trade agreement or the implementing legislation.
According to Robert Weissman of Essential Action, ``This statement of
understanding expresses noble sentiments, but is unlikely to make much,
if any, material difference in the implementation of the agreement.'' I
hope Mr. Weissman is wrong.
[[Page H6571]]
Approximately 16,000 Moroccans are infected with HIV, and the
pandemic of HIV and AIDS is devastating the nations of Africa. Will
Morocco be able to purchase or produce less expensive, generic anti-
viral and other medications needed to fight HIV infection? Of the 40
million people with HIV or AIDS globally, less than 10 percent have
access to drugs that have transformed many cases of HIV infection to a
chronic illness, from a death sentence. In most of the developing
world, drugs to fight HIV infection and AIDS are far too expensive for
most. Any barrier to access to more affordable generic medicine denies
essential health care to the poor.
Women are nearly half of the 40 million infected with HIV, and the
infection rate of women is climbing faster than the infection rate of
men in many regions. Irene Khan, Secretary-General of Amnesty
International, told last week's World AIDS Conference that ``gender
inequality is driving new infections among women and girls like never
before.''
Mr. Speaker, more free trade agreements are in the works. The U.S.
Trade Representative has negotiated with six Central American countries
and has just initiated negotiations with Thailand. The consequences of
trade agreements go far beyond merely eliminating trade barriers, such
as tariffs. These agreements enforce significant public policy
decisions made not by Congress, but by the Trade Representative.
Congress has a narrow role in trade agreements, so I urge my colleagues
to carefully consider the language in this and all future agreements.
Free trade must be fair trade.
Mr. Speaker, I reserve the balance of my time.
Mr. LINCOLN DIAZ-BALART of Florida. Mr. Speaker, I yield myself such
time as he may consume to the gentleman from California (Mr. Dreier),
the distinguished chairman of the Committee on Rules.
(Mr. DREIER asked and was given permission to revise and extend his
remarks.)
Mr. DREIER. Mr. Speaker, I rise in strong support of the U.S.-Morocco
Free Trade Agreement. Let me begin by responding to some of the
comments my very good friend, the gentlewoman from Rochester, New York
(Ms. Slaughter), offered. Those have to do with HIV/AIDS and with
gender inequality. We are all very concerned about dealing with those
very serious crises that are out there. Most of us have come to the
conclusion that one of the best tools that we can utilize to deal with
those challenges is to encourage greater economic growth. Improving the
standard of living for people will dramatically enhance the chance to
deal with gender inequality, to deal with the challenge of having the
resources to tackle greater education when it comes to the
proliferation of HIV/AIDS.
So let me say that this agreement is itself a very, very
comprehensive, unique and cutting-edge agreement which will create
opportunities on both sides of the Atlantic.
Last week this body overwhelmingly passed the U.S.-Australia Free
Trade Agreement. There is certainly a great deal of differences between
Australia and Morocco. Australia has an economy which is very much like
ours. They are a developed, industrialized nation with stringent labor
and environmental standards. And like the United States, they have an
economy that is increasingly based on services.
Morocco, by contrast, is a developing country facing many of the
challenges that confront nations throughout the developing world. They
are working very hard in Morocco to modernize their infrastructure and
develop new sectors even as they strengthen the traditional industries
like agriculture and textiles. They are aggressively pursuing labor and
environmental reforms as well as combating piracy and counterfeiting.
In short, Morocco is working diligently to climb higher and higher up
that proverbial economic ladder.
The very remarkable thing about trade liberalization is these two
trade agreements, with vastly different economies, can both be
unequivocally good for all parties involved, making it a win/win. Trade
is not only beneficial for big economies like the United States or
wealthy economies like Australia, but it is very, very important for
small, developing economies like Morocco, and I would argue in many
ways because of the contrast that exists, trade agreements like this
for developing nations create a potential for an even more dramatic
improvement in the quality of life and the standard of living in those
countries.
Unfortunately, economic isolationists often hide behind the guise of
fair trade, an argument that was just put forth by my colleague from
New York. They use fair trade to argue that because some countries lack
the resources to pay American wages or enforce identical labor
standards that we have in America, the most developed nation in the
world, that we should somehow not trade with these countries. This is a
tragically misguided argument.
It is precisely because these countries have further to go up that
economic ladder that we should and must pursue open trade. Trade
liberalization provides the tools for economic growth by opening up new
markets, by building the legal framework necessary for a healthy
business and investment environment by creating the resources to set
high labor and environmental standards. Morocco is a perfect example of
just such a country.
Mr. Speaker, for many years Morocco has been working to bring its
economy into this new and vibrant 21st century. It has been working to
increase its standard of living, and it has been striving to raise its
labor and environmental standards. In fact, Morocco's aggressive
efforts to reform its labor laws since the start of the free trade
agreement process began, culminated in a groundbreaking new labor law
that was passed just a few weeks ago.
These reforms address issues ranging from child labor to the minimum
wage to nondiscrimination of women and the disabled, leading again to
deal with the challenge that the gentlewoman from Rochester, New York
(Ms. Slaughter) raised. This new labor code makes Morocco a leader in
the developing world, and it is a testament both to Morocco's
commitment to high standards and the effectiveness and the importance
and the dynamism of economic engagement.
Morocco is living up to its commitments even before implementation of
this free trade agreement, but I want to make it very clear, while the
FTA is critical to helping Morocco stay on its current path of economic
development, it is by no means a mere gift from the United States of
America. American businesses, American consumers, American workers and
investors will all benefit from this agreement. Mr. Speaker, 95 percent
of all trade in consumer and industrial goods will immediately become
duty free. American farmers will have a huge advantage as they gain
greater access than even Morocco's traditional European trading
partners currently enjoy. U.S. service providers will benefit from
broad-based liberalization across all service sectors, and American
producers will benefit from the highest intellectual property
protections ever negotiated in a free trade agreement, and that is
particularly of concern to those Members from areas like southern
California where our entertainment industry is so important. Setting an
example and dealing with this issue of intellectual property is key.
The FTA also grants us an opportunity to strengthen our relationship.
I want to say that relationship has been dramatically strengthened from
the work that the gentleman from Florida (Mr. Lincoln Diaz-Balart) has
done in developing this important relationship we have. He and the
gentleman from Pennsylvania (Mr. English) and others he mentioned have
been very critical to building this U.S.-Morocco Caucus, and I
congratulate them for their hard work in doing what we can to build
that relationship which I believe has played a big role in leading us
to this point where we, by an overwhelming margin, are going to pass
this.
I believe this trade agreement is going to have a chance to deal with
one of the challenges that exists in Morocco, and that is dealing with
a challenge which has been going on for a long period of time with the
Western Sahara. It is my hope that as we strengthen further this
relationship between our two countries, we will be able to see a
resolution to that.
Mr. Speaker, we know this has been a very important relationship
between our two countries. Since 1777, when our
[[Page H6572]]
friendship formally began, Morocco has proven to be an important and
strategic partner. This friendship has never been more apparent than
throughout our recent global efforts to combat terrorism. We all know
Morocco has been a critically important ally to us in that effort, and
as a Muslim-Arab country, they have been an ardent U.S. supporter in a
part of the world where our list of very good friends is not as strong
as we would have liked.
Mr. Speaker, on both economic and political fronts, Morocco is making
tremendous efforts. Today we are able to strengthen this important
relationship while tearing down barriers, creating new opportunities
for, as I said, American workers, American investors, American business
people, and Moroccans alike. I urge my colleagues to demonstrate their
support for our pro-economic growth agenda by voting for this rule and
for the underlying measure.
Ms. SLAUGHTER. Mr. Speaker, I yield such time as he may consume to
the gentleman from Michigan (Mr. Levin), a valued member of the
Committee on Ways and Means.
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Mr. Speaker, I support this rule. However, I want to make
it clear that we do not want this as a precedent that on trade
agreements only 2 hours of debate always are allowed. In this case I
think 2 hours will be satisfactory. That will not always be true.
{time} 1200
There are good reasons to support this FTA, and I do so. There is the
historical relationship between our two countries, as mentioned. There
are the present realities in our relationship, Morocco's important role
in its area and beyond that. Also, there are some important provisions
in this agreement; for example, relating to manufacturing goods outside
of the textile area. Ninety-five percent of them will become duty-free.
There are strong services commitments, strong IPR commitments. So there
are good reasons to be supportive of this.
I do want to put in perspective, though, several issues that have
come up in our discussion, and these issues really were raised by us on
the minority side. The gentleman from California (Mr. Dreier) likes to
talk about raising issues as if it is a reflection of economic
isolationism. That is the rubric, the mantra, the propaganda of the
majority. They try to pin it on Democrats, including John Kerry. It is
absurd. We raised several issues because they were legitimate ones, not
because we opposed expanded trade, but because we want expanded trade
to work for everybody. We want expanded trade to be shaped. We do not
think it is some magic bullet that we simply have to shoot and
everything will work out. We do not think trade policy should be on
automatic pilot. We do not think that what is necessarily appropriate
in one trade agreement is appropriate in another. These cookie cutter
approaches of this administration are wrong, and surely we do not
support this agreement because we think that the economic record of
this administration is worthy of support by anybody in this country.
So we raised a couple of issues. And the gentlewoman from New York
(Ms. Slaughter) referred to the prescription medicine provision, and I
want to talk about it. Before I do that, a brief word and we will have
more discussion during the 2 hours about the core labor standard
provisions. The gentleman from California said we should not impose
U.S. wages, identical laws on other countries. That is not what we are
talking about. That again is propaganda from the majority side. What we
are talking about are basic core international standards, and
countries, including ours, have signed on to a declaration that says
that people should have the right to associate, to bargain, to be free
from discrimination, there should be no child or forced labor. That is
what we are talking about when we say they should be incorporated into
free trade agreements.
We asked the question, an important one, where is Morocco? Where is
Morocco today in terms of their laws and their enforcement of these
core labor standards? And the majority, because of their view that
trade always works out for the best, it is always win-win, did not
raise any questions about that. In fact, as to the reforms of 2003 in
Morocco, there was not even within our government an English
translation of these laws. And we asked for one and we looked at them.
We talked to the Moroccan government about these laws, and I am pleased
to say that we had a very useful discussion, which we initiated and the
Moroccan government responded to, regarding the status of these core
labor standards in Moroccan law and in Moroccan practice.
The reforms that were inaugurated last year were a major step
forward. The Moroccan society has some history of some freedom for
workers, and the independent union in Morocco supports this agreement,
I think, as a result. But there were issues raised as to the ability of
people to associate, to bargain, and to strike, and so we asked the
Moroccan government to give us in writing the status, and I want to
quote from their letter and I will place that letter in the Record. The
letter read this way:
``The government of Morocco is committed to protecting the right to
strike in conformance with ILO, International Labor Organization's core
principles. In particular, the government will not use Article 288 of
our penal code against lawful strikers.''
So I very much disagree with the administration's approach in
general. They have in the agreements enforce their own laws. They put
these in the agreements regardless of whether the laws incorporate the
standards and whether there is implementation of them. And when we have
a chance, when we take over, that will change. But in the meanwhile,
the question is, is there conformance, is there conformance basically
in Morocco with the core labor standards? And I think the realities as
we were able to dig them out indicate that they are basically in
conformance with the core labor standards.
Now a few words about prescription medicines. Why did we inquire?
First of all, there is the same provision here as there is in the
previous agreement, including Australia, the general patent provision
that could be applied to reimportation of prescription medicines. It
turns out in the case of Morocco that that provision is not going to
have any potential effect. All of the legislation that has been
introduced regarding reimportation does not include Morocco. They have
a very small pharmaceutical industry. So I do not think, though I do
not like this provision as a general rule, that we should vote against
Morocco because of it, but we should make clear that we do not believe
these provisions or this provision should be in trade agreements.
Now what about the impact of these provisions not on our important
health needs but the important health needs of the people of Morocco?
And we were concerned about that. The gentleman from California (Mr.
Dreier) talked about AIDS. Look, if we are really concerned, and I
think we all are, we need to look at these agreements to see what is
the potential impact on the availability of medicines to people in
Morocco who are suffering from AIDS and where there is in other cases
as well some kind of a health emergency? And there were several
provisions in this agreement that raised questions about the
accessibility of the people of Morocco in these cases to necessary
pharmaceuticals and the ability of the government of Morocco to take
the steps necessary to make these drugs available. And these are fairly
technical provisions, but they relate to the lives of hundreds of
thousands of people. One relates to so-called parallel imports and the
other to test data protections.
So I will make a long story short, and, if necessary, we can talk
more about this when we have the debate of 2 hours. We entered into
discussions with USTR. We on the Democratic side sent a letter to USTR,
and they responded. And I include those two letters in the Record. And
we said, in a few words, would the provisions in these two cases
prevent accessibility to necessary drugs in a real case of emergency or
necessity? And essentially what USTR has said: The agreement in the
side letters, when read together, would not prohibit action by the
Moroccan government to provide access to these drugs. And these side
letters do have effect. The USTR has told us the
[[Page H6573]]
following, and I want to read them so there is clarity. This is from
page 8 of the mentioned letter to me:
``As stated in the side letter, the letter constitutes a formal
agreement between the parties. It is thus a significant part of the
interpretive context for this agreement and not merely rhetorical.''
And they also then earlier have said: ``Therefore, if circumstances
ever arise in which a drug is produced under compulsory license,''
meaning the government of Morocco has given that license to make these
drugs available, ``and it is necessary to approve that drug to protect
public health or effectively utilize the TRIPS/health solution, the
data protection provisions in the FTA would not stand in the way.'' And
they say the same as to the parallel import issue.
So I just finish by saying this to make it very clear: We were
concerned. There is an AIDS epidemic. There are other health issues of
serious import for the lives of children and other citizens of Morocco,
and we took the initiative to be sure that this agreement would not
prevent the availability of medicines in these circumstances. The
Declaration, the language that was worked out in Doha, made it clear as
to WTO that countries could protect themselves and their citizens when
there was an overriding health need, and we wanted to make sure that
nothing in this FTA would override that ability. And I am satisfied
because of the exchange of letters. I am satisfied because of what was
written to us by USTR. I am now satisfied by their categorical
statement at our hearing just a few days ago that there would be
nothing that would prevent access to these medicines in the
circumstances I mentioned because of the FTA.
For all of those reasons, I believe that the issue for Morocco has
been addressed. But I want to make it very clear that when we negotiate
these agreements in the first place, as is true for core labor
standards, as is true for health needs, as is true for anything else,
we should be sensitive to what the possible impact would be. We should
not be using cookie cutter approaches when the lives and the
livelihoods of people in our country and in other countries are
involved.
So I support this agreement. I urge passage of the rule. But I think
this has been a healthy process, and I think we have both clarified the
meaning of this agreement, and also I think what we have done is to
serve notice as to how these agreements should be negotiated in the
future.
Embassy of the
Kingdom of Morocco,
Washington, DC, July 14, 2004.
Hon. Sandy Levin,
Rayburn House Office Building,
Washington, DC.
Dear Congressman Levin: I have deeply appreciated the
continuing opportunity to work with you on the U.S. Morocco
Free Trade Agreement. In particular, I welcome your interest
in our nation's labor law, specifically the comprehensive
reforms, passed last year.
I want to address through this letter some of the issues
that have been highlighted in conversations with you and your
staff. Under Moroccan law, it is illegal to fire an
individual because they are a member of a labor organization
or have engaged in labor organizing. To fire someone on these
grounds would be arbitrary under the 2003 law and would make
available the full remedies provided under that law.
Under Moroccan law, it is illegal to refuse to hire an
individual because they are a member of a labor organization
or have engaged in labor organizing. It is also illegal to
refuse to rehire or extend the contract of an individual for
these reasons.
Section 473 is a provision in the 2003 Labor Law and the
provision's intent is to ensure that labor representatives do
not undermine the traditional labor organizations. The
government intends to implement this provision to achieve
that goal, consistent with the core provisions of the ILO.
The right to strike is protected in the Moroccan
constitution. Further clarification of these rights is
underway. The government of Morocco is committed to
protecting the right to strike in conformance with the
International Labor Organization's core principles. In
particular, the government of Morocco will not use Article
288 of our penal code against lawful strikers.
Concerning the questions regarding Labor Representatives,
employers have the obligation to organize the elections for
the labor representatives. Employers cannot vote in these
elections and are not able to choose labor representatives.
Only employees can vote and elect freely the labor
representatives.
Employees can join freely the Union of their own choice.
Unions designate their representatives within the companies.
On the ILO involvement, Morocco has always worked with ILO.
For instance, ILO assisted Morocco to write the Labor Code of
2003 and the new law on child labor. Morocco, as in the past,
will continue to ask the support of ILO and work with this
organization in all labor issues such as new laws and will
ask its help in providing assistance for the implementation
of the current rules.
I look forward to continuing to work with you on these
issues and any others of potential concern. Nevertheless, I
wanted to get back to you in a timely manner on the key
issues addressed in this letter.
Sincerely,
Aziz Mekouar,
Ambassador.
____
Embassy of the
Kingdom of Morocco,
Washington, DC, July 19, 2004.
Hon. Sandy Levin,
Rayburn House Office Building,
House of Representatives.
Dear Representative Levin: I deeply appreciate the
opportunity to work with you on the U.S.-Morocco Free Trade
Agreement. In particular, I appreciate the opportunity to
talk to you about the pharmaceutical provisions in the Free
Trade Agreement, and about how the Government of Morocco is
meeting the health needs of its citizens.
The Government of Morocco has a well-developed health
system, including a comprehensive public health program. For
example, free medical care, including medicines, is available
through our hospitals. Morocco's health care policy includes
a strong emphasis on generic drugs.
Morocco has not needed to engage in emergency measures such
as compulsory licensing or parallel imports. In fact, there
is a well-developed domestic pharmaceutical industry in
Morocco, producing also generics, and in 2000, well in
advance of the Free Trade Agreement and completely
independent of it, Morocco decided to bar parallel imports.
In addition, as a separate, but quite important matter, the
Government of Morocco is strongly committed to and has agreed
to the highest-standard intellectual property rights
provisions in the Free Trade Agreement. The Government of
Morocco believes that effective intellectual property right
protection will play a vital role in the continued economic
development of our country.
The pharmaceutical provisions in the Free Trade Agreement
were carefully considered in Morocco. They were discussed in
detail with all parties. All sectors of our health system
were involved, including the pharmaceutical industry. The
discussions also included the members of the civil society in
Morocco.
The Government of Morocco achieved in this agreement full
flexibility to meet our nation's health concerns. In
particular, the Government of Morocco believes the agreement
fully preserves its right to issue a compulsory license in
the event that this should prove necessary.
The Agreement does bar ``parallel imports'' in 1.5.9.4.
However, as described above, the Government of Morocco
already bans ``parallel imports.'' In addition, the
Government of Morocco believes that in the event that it
faced a situation where extraordinary action was required, it
could meet the needs of its people through a compulsory
license.
The Government of Morocco considered carefully the data
exclusivity provisions in the agreement. We do not believe
that they present any risk to our ability to meet the health
needs of our citizens.
Under the Agreement, a compulsory license does not override
obligations to provide data exclusivity under 15.10.1 and 2.
The Government of Morocco believes it is unlikely that a
situation would ever arise where data exclusivity would be a
barrier to the issuance of a compulsory license. If such an
event did occur, the Government of Morocco believes that an
accommodation could be reached with the owner of the data.
The Government of Morocco supports the Paragraph 6 solution
of the Doha Declaration. The Free Trade Agreement does not
restrict our ability to export under the Paragraph 6 solution
of the Doha Declaration. To the specific, 15.9.6 does not
create a barrier to exports under the Paragraph 6 solution of
the Doha Declaration.
The June 15, 2004 side letter between our two countries
addresses the ability to amend the Free Trade Agreement,
responsive to amendments to the WTO Agreement on Trade-
Related Aspects of Intellectual Property Rights. Under the
Agreement, the Government of Morocco believes it can consult
immediately to amend the Agreement responsive to any WTO
amendments. Under the Agreement, it is not required to wait
for there to be an application in dispute of the Agreement.
I look forward to keep working with you.
Sincerely,
Aziz Mekouar,
Ambassador.
____
Congress of the United States,
House of Representatives,
Washington, DC, July 15, 2004.
Hon. Robert B. Zoellick,
U.S. Trade Representative,
Washington, DC.
Dear Ambassador Zoellick: We are writing to express our
ongoing concern about sections of recently negotiated U.S.
free trade agreements (FTAs) that could affect the
availability of affordable drugs in developing countries. In
particular, we are concerned about the impact of restrictions
on
[[Page H6574]]
parallel imports and about marketing exclusivity requirements
for pharmaceuticals included in the Morocco FTA. Our concern
relates to two points.
First, it appears that some of the provisions contradict,
both explicitly and in spirit, commitments made by the United
States in the World Trade Organization in both the November
2001 Declaration on the TRIPS Agreement and Public Health
(the Doha Declaration) and the September 2003 Implementation
of Paragraph 6 of the Doha Declaration on the TRIPS Agreement
and Public Health (the Paragraph 6 Decision). Section
2101(b)(4)(C) of the Trade Act of 2002 (Trade Promotion
Authority or TPA) directs the Administration to respect the
Doha Declaration, necessarily including subsequent agreements
related to that Declaration.
Second, we are concerned that the FTA's restrictions on
obtaining regulatory approval for drugs, including drugs that
are already off-patent, are likely to increase prices in the
Moroccan market. These restrictions, described below, could
undermine the availability of generic versions of drugs to
treat serious health problems, including HIV/ADS, that are
widespread in many, if not most, developing countries.
Moreover, any increase in the price of drugs in a developing
country like Morocco will be borne by consumers because most
developing countries have large rural, uninsured, and poor
populations who pay out-of-pocket for drugs.
In discussions with your staff and in recent testimony
before the Committee on Ways and Means, we understand that
your office is of the view that the FTA does not interfere
with a country's efforts to ensure broader access to
medicines. We request that you explain that view to us in
writing, and in particular, by responding to the questions
outlined below. We have focused on Chapter 15 of the U.S.-
Morocco FTA, because it may be considered by Congress in the
coming weeks.
restrictions on parallel importation
Article 15.9.4 of the U.S.-Morocco FTA requires both
countries to recognize the exclusive right of a patent holder
to import a patented product, at least where the patent
holder has restricted the right to import by contractual
means. In practical terms, this provision means that neither
Morocco, nor for that matter, the United States, may allow
parallel imports of patented pharmaceutical products from the
other country, or where a national of the other country owns
the patent.
With respect to Morocco, which is a developing country,
this provision appears to limit one of the flexibilities
identified in the Doha Declaration for increasing access to
medicines, and accordingly, it appears to contradict the
direction in section 2102(b)(4)(c) of TPA. Specifically, the
Doha Declaration reaffirmed that the TRIPS Agreement provides
flexibility for WTO Members to take measures to protect
public health, including ``promot[ing] access to medicines
for all.'' One of the key flexibilities identified in the
Doha Declaration is the right of each country to determine
for itself whether to allow parallel imports.
Does Article 15.9.4 of the Morocco FTA prevent Morocco from
allowing parallel imports of a patented pharmaceutical
product?
Given that the Doha Declaration explicitly confirms the
right of each country to retain flexibility in allowing
parallel imports of drugs as one way of meeting the public
health needs of its citizens, please explain why the
provision was included given that TPA directs the
Administration to respect the Doha Declaration?
Which country sought inclusion of this provision?
If Morocco or the United States eliminated the exclusive
right of a patent holder to import a patented product, would
either be in violation of Article 15.9.4?
market exclusivity and related provisions
Article 15.10.1 of the U.S.-Morocco FTA requires that both
countries prevent the use of data submitted to support an
application for marketing approval (e.g., approval from the
Food and Drug Administration (FDA)) for a new pharmaceutical
chemical product without the consent of the person submitting
such data, for a period of five years from the date of
approval. In layman's terms, this means that if a company
submits data to meet FDA-type safety and efficacy
standards, and obtains marketing approval based on that
data, other companies cannot obtain regulatory approval
based on those data for five years. Given the cost of
generating such data, this provision operates effectively
as a grant of market exclusivity in virtually all cases,
including in cases where the drug is off patent. Article
15.10.2 appears to allow an additional three years of
marketing exclusivity for new uses of an already-approved
pharmaceutical product. Article 15.10.3 requires both
countries to extend patents where there is a delay in the
marketing approval process.
The provisions described above appear to be based on 1984
amendments to U.S. law known as the Hatch-Waxman Act. The
objectives of the Hatch-Waxman Act were to accelerate and
increase the availability of generic drugs in the United
States while balancing the need for continued investment in
new drugs. As you are aware, the Hatch-Waxman Act was
necessary because prior to 1984, U.S. law made it extremely
difficult and expensive to bring a generic version of a
pharmaceutical product to market, even after a patent
expired. This was because prior to the 1984 changes, a
company seeking marketing approval for a copy of an already-
approved drug had to generate its own data to support its FDA
application. The cost of generating those data effectively
precluded second entrants from entering the market. (First
entrants were able to offset the cost for generation of the
data because they enjoyed patent protection.) The Hatch-
Waxman Act allowed second entrants to rely on data submitted
by first entrants, thereby reducing costs and speeding
introduction of generic versions of drugs to the U.S. market.
In exchange for allowing second entrants to ``piggy-back''
off first entrants, first entrants were given a period of
market exclusivity, even for drugs that are off-patent.
The Hatch-Waxman Act's provisions on market exclusivity
were part of a compromise necessary to ensure that the U.S.
regulatory structure was updated to facilitate the entry of
generic drugs into the U.S. market. Most developing countries
already have robust generic markets, in large part because
they already allow producers of generic versions of drugs to
obtain regulatory approval based on data submitted by first
applicants or based on prior approval. In light of that fact,
and given that innovative drug companies largely develop
drugs for developed country markets and conduct the necessary
tests to get marketing approval in those markets regardless
of whether they are given market exclusivity in low-income
developing countries, what is the rationale for including
these provisions?
Please describe the circumstances under which the three
additional years of marketing exclusivity described in
Article 15.10.2 would apply.
Neither Article 15.10.1 or 15.10.2 on marketing exclusivity
appear to allow for reliance on previously submitted data or
prior approval during the period of market exclusivity absent
consent of the first applicant. The Doha Declaration
reaffirmed the right of countries to use flexibilities under
the TRIPS Agreement, such as compulsory licenses. A
compulsory license allows someone other than the patent
holder to produce and sell a drug under patent. It is not
clear to us why the grant of a compulsory license would
override a grant of market exclusivity, as provided in
Articles 15.10.1 and 15.10.02. (We note that there is no
exception to protect the public.) Please describe how the
market exclusivity provisions in Article 15.10.1 and Article
15.10.2 relate to Morocco's ability to issue a compulsory
license.
Where a compulsory license has been issued, may a Party
automatically deem that the first applicant has consented to
reliance on the data or prior approval for the drug produced
under the compulsory license?
If the patent and test-data were owned by different
entities, does a compulsory license result in legal
``consent'' by both the patent holder and the data owner for
use of the patented material and the test data?
When the drug is off patent, and a Party wishes to permit
marketing for a second entrant, what mechanism exists in the
FTA to allow for an exception to the provisions on market
exclusivity?
Is a grant of market exclusivity pursuant to Articles
15.10.1 and 15.10.2 considered an ``investment'' with respect
to Chapter 10 of the agreement? If so, would an abridgement
of the period of market exclusivity constitute a compensable
expropriation under Chapter 10?
Article 10.6.5 of the FTA appears to clarify that any act
of patent infringement carried out by a Party in the issuance
of a compulsory license in accordance with the TRIPS does not
constitute a compensable expropriation. Issuance of a
compulsory license, however, is only one aspect of the
process of getting a drug to market. Does the clarification
in Article 10.6.5 also ensure that other measures taken by a
government to ensure that a drug on which a compulsory
license has been issued can be lawfully marketed (e.g., a
grant of marketing approval to a generic or second producer
before the period of marketing exclusivity has expired)
will not constitute compensable expropriations? If not, is
there another provision in the agreement that would ensure
that such measures do not constitute expropriations?
Article 15.10.3 requires that a patent term be extended
where there is a delay in the regulatory approval process.
The provision does not state whether delays attributable to
the applicant (e.g., failure to provide adequate data)
mitigate against extension. Article 15.9.8, the comparable
provision for extension of a patent term because of a delay
in the patent approval process, makes clear that delays
attributable to the patent applicant should not be considered
in determining whether there is a delay that gives rise to
the need for an extension. Why was similar language not
included in Article 15.10.3?
Is Morocco, or for that matter the United States, required
by the FTA to extend a patent term where there is a delay in
the regulatory approval that is attributable to the
applicant?
Bolar-Type Provisions That Limit Export
Article 15.9.6 of the U.S.-Morocco FTA appears to allow a
person other than a patent holder to make use of a patent in
order to generate data in support of an application for
marketing approval of a pharmaceutical product (e.g.,
approval from the FDA). However, Article 15.9.6 also states
that if exportation of the product using the patent is
allowed, exportation must be limited to ``purposes of meeting
marketing approval requirements.'' This provision appears to
preclude Morocco from exporting generic
[[Page H6575]]
versions of patented pharmaceutical products for any reason
other than use in obtaining marketing approval because that
is the only exception noted.
If that is the case, the provision would seem to curtail
Morocco's ability to act as an exporter of pharmaceutical
products to least-developed and other countries under the
Paragraph 6 Decision. Specifically, the Paragraph 6 Decision
allows countries to export drugs produced under a compulsory
license to least-developed countries or to countries that
lack pharmaceutical manufacturing capabilities. Were the
provisions to constrain Morocco's ability to export under the
Paragraph 6 Decision, the United States could be accused of
backtracking on commitments that have been made.
Please explain whether this Article prohibits Morocco from
allowing the export of generic versions of patented
pharmaceutical products for purposes other than ``meeting
market approval requirements.'' If it does not, please
explain in detail how you came to that conclusion.
If this provision does in fact limit Morocco's ability to
allow the export of generic versions of patented
pharmaceutical products, please explain how Morocco could
serve as an exporting country to help least-developed and
other countries address public health needs under the
Paragraph 6 Decision. (Exporters under the Paragraph 6
Decision are exporting to meet the health needs of an
importing country, not merely to obtain marketing approval.)
Does Article 15.9.6 allow export of a generic version of a
patented drug to get marketing approval in a third country
(i.e., other than the United States or Morocco)? (Article
15.9.6 states that ``the Party shall provide that the product
shall only be exported outside its territory for purposes of
meeting marketing approval requirements of that Party.'')
Side Letter to the Agreement
The Morocco FTA includes an exchange of letters dated June
15, 2004, between the Governments of Morocco and the United
States. The letters appear intended to clarify the
relationship between the intellectual property provisions of
the FTA and the ability of Morocco and the United States to
take measures to protect the public health.
The letters address two issues. First, the letters state
that the intellectual property provisions in the FTA ``do not
prevent the effective utilization'' of the Paragraph 6
Decision. Second, the letters state that if the TRIPS
Agreement is amended on issues related to promotion of access
to medicines, and that either the United States or Morocco
takes action in conformity with such amendments, both
countries will ``immediately consult in order to adapt [the
intellectual property provisions of the FTA] as appropriate
in light of the amendment.''
On the Paragraph 6 Decision, please explain how the
statement that the FTA does not ``prevent the effective
utilization'' is not merely rhetorical. Please be specific as
to why you believe the provisions in the FTA do not preclude
Morocco from acting as an importer or exporter of drugs under
the Paragraph 6 Decision, including how the FTA's provisions
related to market exclusivity can be waived if Morocco acts
in either capacity.
On the issue of consultation, do the letters mean that both
Parties agree to amend the FTA as soon as possible to reflect
access to medicines amendments to the TRIPS Agreement? Will
the United States refrain from enforcing provisions of the
FTA that contravene the TRIPS Agreement amendments while the
FTA is being amended? Is USTR willing to engage in an
exchange of letters with the Government of Morocco
memorializing such an understanding?
We appreciate your prompt response to these questions.
Sincerely,
Charles B. Rangel,
Ranking Democrat, Committee on Ways and Means.
Jim McDermott,
Member, Committee on Ways and Means.
Sander Levin
Ranking Democrat, Subcommittee on Trade, Committee on Ways
and Means.
Henry A. Waxman,
Ranking Democrat, Committee on Government Reform.
____
Executive Office of the President, Office of the United
States Trade Representative,
Washington, DC, July 19, 2004.
Hon. Sander M. Levin,
House of Representatives,
Washington, DC.
Dear Congressman Levin: Thank you for your letter of July
15, 2004, regarding certain provisions of the intellectual
property chapter of the U.S.-Morocco Free Trade Agreement
(FTA).
I have addressed each of your specific questions below. As
a general matter, for the reasons also set forth below, the
FTA does not conflict with the Doha Declaration on the TRIPS
Agreement and Public Health or otherwise adversely, affect
access to medicines in Morocco. The FTA does not require
Morocco to change its policies with respect to any of the
flexibilities noted in the Doha Declaration. Furthermore, we
believe that this FTA can advance Morocco's ability to
address public health problems, both by putting in place
incentives to develop and bring new medicines to market
quickly and by raising standards of living more broadly.
The experience of Jordan under the U.S.-Jordan FTA is
illuminating. The United States and Jordan signed the FTA in
2000, during the prior Administration, and we worked with
Congress to enact that agreement in 2001. The U.S.-Jordan FTA
contains a strong intellectual property chapter that covers,
for example, data protection, one of the issues highlighted
in your letter. Jordan has witnessed a substantial increase
in pharmaceutical investment, creating new jobs and
opportunities. In addition, Jordan has approved 32 new
innovative medicines since 2000--a substantial increase in
the rate of approval of innovative drugs, helping facilitate
Jordanian consumers' access to medicines. The Jordanian drug
industry has even begun to develop its own innovative
medicines. This is an example of how strong intellectual
property protection can bring substantial benefits to
developing and developed countries together.
Your specific questions with respect to the U.S.-Morocco
FTA are addressed below.
Parallel Importation
1. Does Article 15.9.4 of the Morocco FTA prevent Morocco
from allowing parallel imports of a patented pharmaceutical
product?
Article 15.9.4 of the FTA reflects current Moroccan law and
therefore does not require Morocco to do anything it does not
already do. The FTA also reflects existing U.S. law. Both
Morocco and the United States already provide patent owners
with an exclusive right to import patented products,
including pharmaceuticals but also all other types of
patented products. Many innovative industries and their
employees in the United States--from the high tech and
pharmaceuticals sectors to sectors covering chemicals and
agricultural inputs, and on to engineering and
manufacturing--benefit from this long-standing protection in
U.S. patent law.
2. Given that the Doha Declaration explicitly confirms the
right of each country to retain flexibility in allowing
parallel imports of drugs as one way of meeting the public
health needs of its citizens, please explain why the
provision was included given that TPA directs the
Administration to respect the Doha Declaration?
Providing patent owners with an exclusive import right is
consistent with Article 28.1 of the TRIPS Agreement, which
states that patent owners have the exclusive right to make,
use, sell, offer for sale, and import products covered by
their patents. U.S. law, developed through a long line of
Supreme Court and lower court cases, has recognized this
right for over a hundred years. The TRIPS Agreement more
precisely articulated the exclusive import right, and, when
implementing TRIPS in the Uruguay Round Agreements Act,
Congress amended the patent law by providing for such a right
expressly in the statute.
At the same time, however, the TRIPS Agreement also allows
countries to choose to permit ``international exhaustion''
without challenge under WTO dispute settlement. International
exhaustion would allow parallel imports. The Doha Declaration
affirms this approach, and states that ``[t]he effect of the
provisions in the TRIPS Agreement that are relevant to the
exhaustion of intellectual property rights is to leave each
member free to establish its own regime for such exhaustion
without challenge, subject to the MFN and national treatment
provisions of Articles 3 and 4.''
Importantly, neither the TRIPS Agreement nor the Doha
Declaration require WTO members to adopt an international
exhaustion rule; they merely recognize that countries may do
so without challenge. WTO members are free to exercise their
sovereign right to choose an alternative policy. As noted,
the United States does not permit parallel imports. Morocco
also decided in 2000, well before the FTA negotiations, not
to permit parallel imports. The fact that the FTA reflects
principles already present in both Parties' laws does not in
any way lessen our commitment to the Doha Declaration. In
fact, in previous FTA negotiations with developing countries
that do not have parallel import restrictions in their
domestic law (e.g., Central America, Chile, and Bahrain), the
final negotiated texts do not contain provisions on parallel
importation.
3. Which country sought inclusion of this provision?
This provision is a standard component of the U.S. draft
text, which USTR staff has presented to Congress for review
and comment on numerous occasions. Morocco readily accepted
the proposal, without objection, and noted during the
negotiations that Moroccan patent law, like U.S. law, already
provided patentees with an exclusive importation right.
4. If Morocco or the United States eliminated the exclusive
right of a patent holder to import a patented product, would
either be in violation of Article 15.9.4?
It would depend on the details of the particular
legislation. A change in U.S. law would, however, affect many
other innovative sectors that rely on patents besides the
pharmaceutical sector. Many U.S. technology, manufacturing,
and other innovative businesses--as well as Members of
Congress--urge us regularly to vigorously safeguard U.S.
patents and the jobs they help create.
market exclusivity
5. The Hatch-Waxman Act's provisions on market exclusivity
were part of a compromise necessary to ensure that the U.S.
[[Page H6576]]
regulatory structure was updated to facilitate the entry of
generic drugs into the U.S. market. Most developing countries
already have robust generic markets, in large part because
they already allow producers of generic versions of drugs to
obtain regulatory approval based on data submitted by first
applicants or based on prior approval. In light of that fact,
and given that innovative drug companies largely develop
drugs for developed country markets and conduct the necessary
tests to get marketing approval in those markets regardless
of whether they are given market exclusivity in low-income
developing countries, what is the rationale for including
these provisions?
In negotiating the U.S.-Morocco FTA and other recent FTAs,
USTR has been mindful of the guidance provided in the Trade
Act of 2002, which directs USTR to seek to ``ensur[e] that
the provisions of any multilateral or bilateral trade
agreement governing intellectual property rights that is
entered into by the United States reflect[s] a standard of
protection similar to that found in United States law.'' We
understand the rationale of this guidance is to help protect
and create high-paying jobs in leading American businesses.
As a developed economy, it is understandable that U.S.
workers will be increasingly employed in higher value (and
better paid) innovative and productive jobs. On the basis of
Congress' direction, the United States sought to include
provisions that reflect U.S. law, including with respect to
the protection of data.
The protection of clinical test data has long been a
component of trade agreements negotiated by U.S.
Administrations with both developed and developing countries.
Data protection provisions were included, for example, in
many past trade agreements, including the U.S.-Jordan FTA and
the U.S.-Vietnam Bilateral Trade Agreement--both negotiated
by the prior Administration after the passage of the law to
which you refer. Such provisions were included in NAFTA, too.
They are in all recent FTAs, including the U.S.-Singapore FTA
and the U.S.-Chile FTA. Data protection provisions have also
been included in many bilateral intellectual property
agreements.
The TRIPS Agreement itself requires protection of clinical
test data against unfair commercial use. While the United
States protects data to obtain approval for new chemical
entities for five years, other countries provide different
terms. The EU, for example, protects such data for 6-10
years.
Implicit in the question, however, appears to be an
assumption that data protection is disadvantageous for
developing countries like Morocco. Yet, protection of data
actually has the potential of facilitating and accelerating
access to medicines. As recognized in Chapter 15 of the FTA
(footnotes 12 and 13), Morocco does not currently approve
generic versions of medicines based on approvals granted in
other countries. As a result, today a generic producer
wishing to sell pharmaceuticals in Morocco may obtain
approval only if an innovative producer first obtains
approval in Morocco or if the generic producer invests the
significant money and time necessary to recreate the data
itself. After an innovative producer obtains approval in
Morocco, a generic producer may rely on such data to
obtain approval for its generic product.
Therefore, under existing Moroccan law, generic
manufacturers in Morocco cannot obtain marketing approval for
a generic drug until an innovator has first obtained approval
for the drug in Morocco. Without data protection, innovative
producers will be less likely to enter the Moroccan market in
the first place because, once they obtain approval, generic
producers may capture most of the market. The data
exclusivity provisions of the FTA can thus provide an
important incentive for innovators to enter the market, which
may in turn expand the potential universe of generic drugs in
Morocco. As noted above, this is the development we are
seeing in Jordan, to the benefit of Jordan consumers.
6. Please describe the circumstances under which the three
additional years of marketing exclusivity described in
Article 15.10.2 would apply.
The question seems to imply that the basic five year term
of protection for data submitted to obtain approval of new
chemical entities may be extended to eight years. This is not
correct. There is no circumstance in which the FTA requires
that an innovator receive a data protection period longer
than five years for new chemical entities.
The three year period of protection reflects a provision in
U.S. law, which relates to new information that is submitted
after a product is already on the market (for example,
because the innovator is seeking approval for a new use of an
existing product). In that situation, at least in cases where
the origination of this new data involves considerable
effort, the FTA requires that the person providing the new
data gets three years of protection for that new data
relating to that new use. This three year period only applies
to the new data for the new use; it is not added to the
exclusivity period for any data previously submitted.
For example, if a new chemical entity is given marketing
approval, the data supporting that approval is protected for
five years. After that time, generic producers may rely on
the data to obtain approval for a generic version of the drug
for the use supported by the original data. If a new use is
subsequently discovered for the chemical entity, and the
health authority approves the new use based on new data, then
the originator of the new data is entitled to three years of
protection for that data. During that time, however, generics
can continue to produce and market the drug for the original
use.
7. Neither Article 15.10.1 or 15.10.2 on marketing
exclusivity appear to allow for reliance on previously
submitted data or prior approval during the period of market
exclusivity absent consent of the first applicant. The Doha
Declaration reaffirmed the right of countries to use
flexibilities under the TRIPS agreement, such as compulsory
licenses. A compulsory license allows someone other than the
patent holder to produce and sell a drug under patent. It is
not clear to us why the grant of a compulsory license would
override a grant of market exclusivity, as provided in
Articles 15.10.1 and 15.10.2. (We note that there is no
exception to protect the public.) Please describe how the
market exclusivity provisions in Article 15.10.1 and Article
15.10.2 relate to Morocco's ability to issue a compulsory
license.
The Doha Declaration recognizes that the TRIPS Agreement
allows countries to issue compulsory licenses to address
public health problems. The U.S.-Morocco FTA is fully
consistent with this principle. It contains no provisions
with respect to compulsory licensing, leaving the
flexibilities available under WTO rules unchanged.
In the negotiation of the U.S.-Morocco FTA, both parties
recognized the importance of protecting public health. Your
questions pertain to whether provisions of Chapter 15 (which
is the Intellectual Property Rights chapter) might affect
this common interest. To address this type of concern, the
United States and Morocco agreed to a side letter on public
health in which both Parties stated their understanding that
``[t]he obligations of Chapter Fifteen of the Agreement do
not affect the ability of either Party to take necessary
measures to protect public health by promoting access to
medicines for all, in particular concerning cases such as
HIV/AIDS, tuberculosis, malaria, and other epidemics as well
as circumstances of extreme urgency or national emergency.''
The Parties also stated that ``Chapter Fifteen does not
prevent the effective utilization of the TRIPS/health
solution'' reached in the WTO last year to ensure that
developing countries that lack pharmaceutical manufacturing
capacity may import drugs. Therefore, if circumstances ever
arise in which a drug is produced under a compulsory license,
and it is necessary to approve that drug to protect public
health or effectively utilize the TRIPS/health solution, the
data protection provisions in the FTA would not stand in the
way.
8. Where a compulsory license has been issued, may a Party
automatically deem that the first applicant has consented to
reliance on the data or prior approval for the drug produced
under the compulsory license?
As explained above, if the measure described in the
question is necessary to protect public health, then, as
explained in the side letter, the FTA would not stand in the
way.
9. If the patent and test-data were owned by different
entities, does a compulsory license result in legal
``consent'' by both the patent holder and the data owner for
use of the patented material and the test data?
See previous response.
10. When the drug is off patent, and a Party wishes to
permit marketing for a second entrant, what mechanism exists
in the FTA to allow for an exception to the provisions on
market exclusivity?
A patent is designed to protect one type of intellectual
property work, i.e., an invention. Protection of data is
intended to protect a different type of work, i.e.,
undisclosed test data that required significant time and
effort to compile. The fact that one type of intellectual
property protection for a product has expired, should not
lead as a matter of course to the conclusion that all other
intellectual property rights attached to the same product
should also expire. The same is true in other areas of
intellectual property. For example, a single CD may encompass
several intellectual property rights related to the music,
the performer and the record company. These rights may expire
at different times. The fact that the copyright attached to
the sound recording has expired, should not mean that the
composer or performer loses the copyright it has. As
you know, this principle is important to a broad range of
U.S. creative and innovative industries, including the
entertainment sector, America's second largest export
business.
However, as indicated in the side letter, if a circumstance
arose, such as an epidemic or national emergency, that could
only be addressed by granting a second entrant marketing
approval notwithstanding the data protection rights of the
originator of the data, the FTA would not stand in the way.
11. Is a grant of market exclusivity pursuant to Articles
15.10.1 and 15.10.2 considered an ``investment'' with respect
to Chapter 10 of the Agreement? If so, would an abridgement
of the period of market exclusivity constitute a compensable
expropriation under Chapter 10?
The definition of an ``investment'' in the FTA includes,
inter alia, ``intellectual property rights.'' Whether an
abridgement of the data protection obligation gives rise to a
compensable expropriation of an ``investment'' under Chapter
Ten is a fact-specific issue that would have to be resolved
on the merits of a particular case. It is worth noting,
however, that Article 10.6.5 provides
[[Page H6577]]
that the expropriation provision of Chapter Ten does not
apply to the issuance of compulsory licenses or to the
limitation of intellectual property rights to the extent that
such action is consistent with the intellectual property
chapter (Chapter Fifteen). A determination concerning the
consistency of an action with Chapter Fifteen would be
informed by the side letter.
12. Article 10.6.5 of the FTA appears to clarify that any
act of patent infringement carried out by a Party in the
issuance of a compulsory license in accordance with the TRIPS
does not constitute a compensable expropriation. Issuance of
a compulsory license, however, is only one aspect of the
process of getting a drug to market. Does the clarification
in Article 10.6.5 also ensure that other measures taken by a
government to ensure that a drug on which a compulsory
license has been issued can be lawfully marketed (e.g., a
grant of marketing approval to a generic or second producer
before the period of marketing exclusivity has expired) will
not constitute compensable expropriations? If not, is there
another provision in the agreement that would ensure that
such measures do not constitute expropriations?
See response to Question 11.
13. Article 15.10.3 requires that a patent term be extended
where there is a delay in the regulatory approval process.
The provision does not state whether delays attributable to
the applicant (e.g., failure to provide adequate data)
mitigate against extension. Article 15.9., the comparable
provision for extension of a patent term because of a delay
in the patent approval process, makes clear that delays
attributable to the patent applicant should not be considered
in determining whether there is a delay that gives rise to
the need for an extension. Why was similar language not
included in Article 15.10.3?
The Parties did not find it necessary to specifically
address the issue of how to handle delays attributable to an
applicant for marketing approval in the context of data
protection. As with numerous other provisions, the Parties
retain the flexibility to address such details in their
implementation of the FTA, provided that they comply with the
basic obligation.
14. Is Morocco, or for that matter the United States,
required by the FTA to extend a patent term where there is a
delay in the regulatory approval that is attributable to the
applicant?
The FTA preserves flexibility for the Parties to address
the issue of delays attributable to an applicant for
marketing approval through their domestic laws and
regulations.
bolar provisions
15. Please explain whether this Article prohibits Morocco
from allowing the export of generic versions of patented
pharmaceutical products for purposes other than ``meeting
marketing approval requirements.'' If it does not, please
explain in detail how you came to that conclusion.
No, it does not. The Article dealing with the ``Bolar''
exception to patent rights only deals with one specific
exception. It does not occupy the field of possible
exceptions, and thus does not prevent Morocco from allowing
the export of generic versions of patented pharmaceutical
products for purposes other than ``meeting marketing approval
requirements'' when permitted by other exceptions. For
example, Morocco has the right to allow exports where
consistent with TRIPS Article 30 and WTO rules on compulsory
licensing. Morocco may, for example, allow export of generic
versions of patented drugs by issuing a compulsory license in
accordance with the TRIPS/health solution agreed last August
in the WTO.
16. If this provision does in fact limit Morocco's ability
to allow the export of generic versions of patented
pharmaceutical products, please explain how Morocco could
serve as an exporting country to help least-developed and
other countries address public health needs under the
Paragraph 6 Decision. (Exporters under the Paragraph 6
Decision are exporting to meet the health needs of an
importing country, not merely to obtain marketing approval).
As noted in the response to Question 15, the FTA does not
limit Morocco's ability to make use of the TRIPS/health
solution agreed last August to export drugs under a
compulsory license to developing countries that cannot
produce drugs for themselves.
17. Does Article 15.9.6 allow export of a generic version
of a patented drug to get marketing approval in a third
country (i.e., other than the United States or Morocco)?
(Article 15.9.6 states that ``the Party shall provide that
the product shall only be exported outside its territory for
purposes of meeting marketing approval requirements of that
Party.'')
Morocco can get marketing approval in a third country to
allow export of a generic version through the issuance of a
compulsory license for export, consistent with WTO rules.
Article 15.9.6 does not interfere with that result.
side letter
18. On the Paragraph 6 Decision, please explain how the
statement that the FTA does not ``prevent the effective
utilization'' is not merely rhetorical. Please be specific as
to why you believe the provisions in the FTA do not preclude
Morocco from acting as an importer or exporter of drugs under
the Paragraph 6 Decision, including how the FTA's
provisions related to market exclusivity can be waived if
Morocco acts in either capacity.
There are no provisions in the FTA related to compulsory
licensing, which means that it does not limit in any way
Morocco's ability to issue compulsory licenses in accordance
with WTO rules, including TRIPS Article 31 and the TRIPS/
health solution. With respect to other rules included in
Chapter 15, including data protection, the side letter states
that the FTA does not ``prevent the effective utilization of
the TRIPS/health solution.'' As stated in the side letter,
the letter constitutes a formal agreement between the
Parties. It is, thus, a significant part of the interpretive
context for this agreement and not merely rhetorical.
According to Article 31 of the Vienna Convention on the Law
of Treaties, which reflects customary rules of treaty
interpretation in international law, the terms of a treaty
must be interpreted ``in their context,'' and that
``context'' includes ``any agreement relating to the treaty
which was made between all the parties in connection with the
conclusion of the treaty.''
19. On the issue of consultation, do the letters mean that
both Parties agree to amend the FTA as soon as possible to
reflect access to medicines amendments to the TRIPS
Agreement? Will the United States refrain from enforcing
provisions of the FTA that contravene the TRIPS Agreement
amendments while the FTA is being amended? Is USTR willing to
engage in an exchange of letter with the Government of
Morocco memorializing such an understanding?
The United States would, of course, work with Morocco to
ensure that the FTA is adapted as appropriate if an amendment
to the TRIPS Agreement were adopted to ensure access to
medicines. The only amendment currently being contemplated
with respect to TRIPS involves translating the TRIPS/health
solution from last August into a formal amendment. The United
States has no intention of using dispute settlement to
challenge any country's actions that are in accordance with
that solution. In fact, Canada passed legislation recently
that would allow it to export drugs in accordance with the
TRIPS/health solution. The United States reached an agreement
with Canada just last Friday, July 16, to suspend parts of
NAFTA to ensure that Canada could implement the solution
without running afoul of NAFTA rules.
In closing, let me emphasize that we appreciate the
importance of the U.S. commitment to the Doha Declaration on
the TRIPS Agreement and Public Health and the global effort
to ensure access to medicines in developing countries to
address acute public health problems, such as AIDS, malaria
and tuberculosis. The United States played a leading role in
developing these provisions, including enabling poor
countries without domestic production capacity to import
drugs under compulsory licenses. We also successfully called
for giving Least Developed Countries an additional ten years,
from 2006 until 2016, to implement TRIPS rules related to
pharmaceuticals. These accomplishments offer a significant
solution to the conflicts we encountered on taking office in
2001.
At the same time, as Congress has directed us, the
Administration has worked on multiple fronts to strengthen
the value internationally of America's innovation economy.
These efforts have included stronger intellectual property
protection rules and enforcement so as to assist U.S.
businesses and workers, and encourage ongoing innovation that
benefits U.S. consumers.
Our FTAs are but one component of the Administration's
broader efforts to achieve these objectives, and complement
efforts undertaken in other fora. Our FTAs not only do not
conflict with the objectives expressed in the Doha
Declaration but reinforce those objectives and facilitate
efforts to address public health problems.
Sincerely,
John K. Veroneau,
General Counsel.
Mr. LINCOLN DIAZ-BALART of Florida. Mr. Speaker, I reserve the
balance of my time.
Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from
Virginia (Mr. Moran).
Mr. MORAN of Virginia. Mr. Speaker, I thank the gentlewoman from
Rochester, New York for yielding me this time.
I rise today in support of the Moroccan Free Trade Agreement because
it is an important agreement with a moderate Muslim country and it
represents a vital step towards establishing broader free trade in the
Middle East.
Former Clinton administration U.S. Trade Representative Mickey Kantor
said, ``Closer and mutually beneficial ties between Morocco and the
United States will bolster a country that has for several centuries
earned a reputation for moderation, tolerance, and stability. The
Moroccans have democratized their political structures. They recently
made historic reforms to improve women's rights, and codified new labor
rights and protections based upon key International Labor Organization
conventions.
Mr. Speaker, the Moroccan Free Trade Agreement is the first trade
pact to be negotiated with an Arab and Muslim country since September
11, and it
[[Page H6578]]
would permit Morocco to join Jordan in the ranks of countries that have
entered into an enhanced partnership with the United States.
{time} 1215
This agreement will enhance our foreign policy and diplomatic efforts
to bridge greater understanding and cooperation with moderate Arab
nations.
This FTA is going to ensure that U.S. businesses and workers have
greater access to the Moroccan market by further eliminating trade
barriers. It will deepen and expand bilateral commercial ties beyond
the average level of $1 billion in current annual two-way trade flows.
In fact, the United States enjoyed a surplus of $2 billion between 1999
and 2003. So they are buying more from us than we are buying from them.
This is creating more jobs in the United States.
More than 95 percent of bilateral trade in consumer and industrial
products will become duty free immediately upon entry into this
agreement, with all remaining tariffs to be eliminated within 9 years.
It is the best markets access package of any U.S. free trade agreement
with a developing country.
It is going to create new opportunities for U.S. banks, insurance,
securities and related services and telecommunications. Key U.S. export
sectors gain immediate duty-free access to Morocco, such as information
technology, machinery, construction equipment, and chemicals. Morocco
is going to accord substantial market access across its entire services
regime and adhere to strong and detailed disciplines on regulatory
transparency, a key factor.
Additionally, Morocco has agreed to strengthen its intellectual
property laws, and the agreement is going to help Morocco to further
expand its economic and labor reform efforts.
Mr. Speaker, this FTA will expand trade and bring greater economic
opportunities for U.S. workers, farmers and businesses, and is going to
promote economic development in other nations.
Through this type of economic engagement, we can forge stronger ties
with our allies around the world and promote democracy, free markets,
and improved labor standards. That is why I support this agreement. I
urge my very good friends, particularly on this side of the aisle, to
vote in favor of this implementing legislation.
Ms. SLAUGHTER. Mr. Speaker, I have no further requests for time, and
I yield back the balance of my time.
Mr. LINCOLN DIAZ-BALART of Florida. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, I think the gentleman from Virginia brought up some very
important points, and I think they are important to emphasize and not
only take note of. This agreement, in addition to the many, many
important aspects that it contains for the economy, obviously, of
Morocco, and the United States, is a very important agreement
politically; and it encourages the extraordinary progress that Morocco
has made in the area of labor rights, in the area of a free press, and
in the area of democratization.
Morocco has multiple political parties, espousing all conceivable
viewpoints. It has an elected parliament and an elected prime minister.
It has made commendable progress. It is a great friend and ally of the
United States.
For so many reasons, Mr. Speaker, it is important and appropriate for
this Congress to be moving forward today passing this implementing
legislation for the United States-Morocco Free Trade Agreement.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The SPEAKER pro tempore (Mr. Boozman). The question is on the
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Ms. SLAUGHTER. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The SPEAKER pro tempore. Pursuant to clauses 8 and 9 of rule XX, this
15-minute vote on adopting House Resolution 738 will be followed by 5-
minute votes, as ordered, on suspending the rules and passing H.R.
4175; and suspending the rules and adopting H. Res. 728.
The vote was taken by electronic device, and there were--yeas 345,
nays 76, not voting 13, as follows:
[Roll No. 407]
YEAS--345
Abercrombie
Ackerman
Aderholt
Akin
Allen
Andrews
Bachus
Baird
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Beauprez
Bell
Bereuter
Berkley
Berman
Biggert
Bilirakis
Bishop (GA)
Bishop (NY)
Bishop (UT)
Blackburn
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonner
Bono
Boozman
Boswell
Boyd
Bradley (NH)
Brady (TX)
Brown (SC)
Brown, Corrine
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Butterfield
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Capps
Cardin
Cardoza
Carson (OK)
Carter
Case
Castle
Chabot
Chandler
Chocola
Clay
Clyburn
Coble
Cole
Cooper
Cox
Crane
Crenshaw
Crowley
Cubin
Culberson
Cunningham
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeGette
DeLay
DeMint
Deutsch
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Dooley (CA)
Doolittle
Dreier
Duncan
Dunn
Edwards
Ehlers
Emanuel
Emerson
Engel
English
Eshoo
Etheridge
Everett
Farr
Fattah
Feeney
Ferguson
Flake
Foley
Forbes
Ford
Fossella
Frank (MA)
Franks (AZ)
Frelinghuysen
Frost
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gilchrest
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Gordon
Goss
Granger
Graves
Green (WI)
Gutierrez
Gutknecht
Hall
Harman
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Herseth
Hill
Hinojosa
Hobson
Hoeffel
Hoekstra
Holt
Honda
Hooley (OR)
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hyde
Inslee
Isakson
Israel
Issa
Istook
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kaptur
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kilpatrick
Kind
King (IA)
King (NY)
Kingston
Kline
Knollenberg
Kolbe
LaHood
Lampson
Langevin
Lantos
Larsen (WA)
Latham
LaTourette
Leach
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
LoBiondo
Lucas (KY)
Lucas (OK)
Lynch
Maloney
Manzullo
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCotter
McCrery
McDermott
McHugh
McInnis
McKeon
Meehan
Meek (FL)
Meeks (NY)
Menendez
Mica
Millender-McDonald
Miller (FL)
Miller (MI)
Miller, Gary
Miller, George
Moore
Moran (KS)
Moran (VA)
Murphy
Musgrave
Myrick
Neal (MA)
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Ortiz
Osborne
Ose
Otter
Oxley
Pearce
Pelosi
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Putnam
Radanovich
Ramstad
Rangel
Regula
Rehberg
Renzi
Reyes
Reynolds
Rodriguez
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Roybal-Allard
Royce
Ruppersberger
Rush
Ryan (WI)
Ryun (KS)
Sanchez, Loretta
Sandlin
Saxton
Schiff
Schrock
Scott (GA)
Scott (VA)
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simpson
Skelton
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Stearns
Stenholm
Sweeney
Tancredo
Tanner
Tauscher
Tauzin
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Tiahrt
Tiberi
Toomey
Towns
Turner (OH)
Turner (TX)
Upton
Van Hollen
Vitter
Walden (OR)
Walsh
Wamp
Watson
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Wynn
Young (AK)
Young (FL)
NAYS--76
Alexander
Baca
Baldwin
Becerra
Berry
Boucher
Brady (PA)
Brown (OH)
Capuano
Conyers
Costello
Cramer
Cummings
DeFazio
Delahunt
DeLauro
Doyle
Evans
Filner
Green (TX)
Grijalva
Hastings (FL)
Hinchey
Holden
Jackson (IL)
Kanjorski
Kildee
Kleczka
Larson (CT)
Lee
Lipinski
Lofgren
Markey
Marshall
McGovern
McIntyre
McNulty
Michaud
Miller (NC)
[[Page H6579]]
Mollohan
Murtha
Nadler
Napolitano
Oberstar
Obey
Olver
Owens
Pallone
Pascrell
Pastor
Payne
Peterson (MN)
Rahall
Rothman
Ryan (OH)
Sabo
Sanchez, Linda T.
Sanders
Schakowsky
Sherman
Slaughter
Solis
Spratt
Stark
Strickland
Stupak
Taylor (MS)
Tierney
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watt
Woolsey
Wu
NOT VOTING--13
Bass
Carson (IN)
Collins
Gephardt
Greenwood
Kirk
Kucinich
Lowey
Majette
Paul
Quinn
Simmons
Sullivan
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Boozman) (during the vote). Members are
advised there are 2 minutes remaining in this vote.
{time} 1244
Mrs. NAPOLITANO, Mr. BECERRA, Ms. BALDWIN, and Mr. McGOVERN changed
their vote from ``yea'' to ``nay.''
Mr. GUTIERREZ and Mr. WELDON of Florida changed their vote from
``nay'' to ``yea.''
So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________