In 2005, cancer patient groups in India used Indian intellectual property law to stop a patent application by Swiss company Novartis for its anti-cancer drug, Glivec. This allowed Indian companies to continue making generic versions at about $2,700 a year, as opposed to Novartis having a monopoly priced version for sale at about $27,000 a year.
Novartis recently appealed the decision in a direct challenge to India's right to use safeguards contained in trade rules agreed by the WTO in 2001 in the interests of public health.
What is Glivec?
Glivec (Gleevec in the US) is an important drug that means the difference between life and death for cancer patients suffering from leukemia (CML), stomach tumors, and other conditions. Glivec is a significant improvement over other forms of treatment and should be as widely available as possible, at affordable prices.
Why is Novartis enforcing its patent on Glivec in India and in other in developing countries?
Glivec is a key drug for Novartis worldwide. It's the company's second best selling drug with sales reaching $2.8 billion in 2005 and accounts for 9.6 per cent of Novartis's estimated share value. Research indicates that there are multiple diseases that respond to the drug. In only five years, Glivec is now approved in the US for seven different diseases. There is a danger that the company could apply for a new patent based on these "new uses" elsewhere, which would extend its monopoly and delay availability of affordable generic versions of Glivec for people who need it.
Novartis says that there is virtually no commercial market for Glivec in India and that it is taking the case in part to "align Indian IP laws with TRIPS", The World Trade Organization's agreement on intellectual property. This action is one that will affect India's right to produce not only generic versions of Glivec but also for other new medicines in the future.
What would happen if Novartis were successful in its appeal?
Not only would it increase the price of the drug it would also jeopardize India's generic export industry. India is the world's leading supplier of inexpensive generic medicines to developing countries with approximately 67 percent of its exports going to developing countries. As a result people needing cheaper versions of medicines in many developing countries would lose out.
Oxfam believes that generic competition reduces the price of many patented medicines and makes them much more affordable to poor people in developing countries. Lower prices via generic competition could ensure free or subsidized medicines for millions of poor people through increased public sector funding for health, through health insurance and because many poor people are willing to pay out of pocket for medicines because the health and well being of themselves and their family a top priority.
]]>Intellectual property is knowledge which societies have decided can be assigned specific property rights to either individuals, companies or organizations. It allows people, companies and organizations to own their creativity or innovation in the same way they can own physical property.
Intellectual property includes inventions, literary and artistic works, symbols, names, images, and designs used in commerce.
The owner or creator has the right to prevent others to use his property during a limited period of time.
A patent is a legal creation describing "ownership" of an invention. Patents are issued by individual governments and are meant to benefit both the inventor and the society at large. Patents provide the inventor with a temporary right to produce and sell their invention without the threat of competition. This monopoly results in higher prices which provide incentives for inventors.
A Trademark is ownership over product names or brand identity e.g. NIKE and PUMA. This allows for a distiction to be made between different traders of goods and services
Copyright is ownership over creative materials such as literature, art, music and films, sound recordings, software and multimedia. Copyrights usually provide the author or creator with lifetime ownership over their own materials.
These give ownership protection over designs for a product's appearance and can last up to 25 years.
Developing countries, taken as a whole, are net importers of technology and new inventions, most of which are supplied by the developed countries. Companies and organisations in developed countries own the overwhelming proportion of patent rights worldwide.
It is widely recognized that knowledge is essential for development, and that developing countries have much to gain if they are to fully exploit the many opportunities opened up by new technologies. However, increasingly restrictive intellectual property rights are limiting the benefits that new technologies can bring to developing countries.
Fact: Between 1991 and 2001, the net US surplus of royalties and fees (which mainly relate to IP transactions) increased from $14 billion to over $22 billion. In 1999, figures from the World Bank indicate a deficit for developing countries for which figures are available of $7.5 billion on royalties and license fees.
The challenge is for developing countries to use Intellectual property to their own benefit. Only under 2 percent of patent applications in the US in year 1999-2001 came from developing countries.
A reason for that is the lack of capacity for most developing countries to generate their own inventions. To build their capacity, they need to be able first to use other people's inventions, hence their need to have access to cheap technology to kick start their own development. The current IP system is too rigid to cater for these development priorities and needs to be reformed.
Another reason is that the current system does not help developing countries benefit from their own assets and resources. Their traditional knowledge in medicines, their genetic resources, or the names of high-quality products are often patented by foreign companies, which capture all the gains without having to return a fair share of their profits to the origin countries and populations.
A clear illustration of this problem is Ethiopia's Sidamo coffee, which is one of the best coffees in the world. Whilst earning coffee companies higher prices due to its quality and name, it still fails to produce enough returns for coffee farmers to make a decent living. The Ethiopian government wants to trademark this and other Ethiopian coffee names, to build its coffee industry and help its own farmers. However, this trademark is being opposed in the United States by the National Coffee Association of America, of which Starbucks is a member.
Fact: In 2001, less than 1 percent of US patents were granted to applicants from developing countries, nearly 60 percent of which were from seven of the more technologically advanced developing countries.
R&D expenditure is heavily concentrated in developed countries, and in a few of the more technologically advanced developing countries. Few developing countries have been able to develop a strong indigenous technological capability. This means that it is difficult either for them to develop their own technology, or to assimilate technology from developed countries.
Fact: In sub-Saharan Africa in 1998 (excluding South Africa), 35 patents were granted to residents compared to 741 for non-residents. By contrast in Korea, 35,900 patents were issued to residents, compared to 16,990 to non-residents. In the US, the corresponding figures were 80,292 and 67,228.
]]>Following a traditional coffee ceremony featuring some of Ethiopia's finest coffees—Harar, Sidamo, and Yirgacheffe—the farmers said they wanted the opportunity to make more money off the coffees they cultivate, which command such high prices among consumers.
While Starbucks charges as much as $26 a pound for Ethiopian specialty coffees, Ethiopian coffee farmers get only 5-10 percent of that price. For this reason, Ethiopia has asked Starbucks to sign a trademark agreement that would give Ethiopia the ability to control the use of its coffee names, occupy a stronger negotiating position with foreign buyers, and capture a larger share of the market.
"Just because I'm a farmer, don't think that I don't understand what's happening in the global market," said Tadesse Terro, who traveled from Yirgacheffe to speak out. "I do listen to the radio and I know how much my coffee retails for overseas. The money I earn for my hard work does not come close."
More than 200 people came to the Sheraton hotel in Addis Ababa to attend the coffee ceremony. Government officials and diplomats joined community activists and farmers. Each person signed a petition asking Starbucks to honor its commitment to Ethiopian coffee farmers by recognizing the country's ownership of its coffee names.
One farmer, 85-year-old Gemede Robe, left his Abaya district hometown for the first time to attend the event. Unable to read and write, he signed the Starbucks petition with his fingerprint.
Robe became the face behind Ethiopia's trademark initiative late last year when Oxfam began using his photograph to publicize the campaign.
"Like any other human being, we Ethiopians hold our names very dear," Robe said. "If given the opportunity to speak with people at the big company (Starbucks), I would ask them why they're resisting us owning our coffee names. I am sure they know, as the whole world does, that our coffees are some of the best in the world. But why are they refusing to give us the recognition we deserve?"
Oxfam is part of a broad coalition calling on Starbucks to sign a trademark agreement with Ethiopia. More than 89,000 people in 70 countries have already joined the campaign. Earlier in December, activists from New Zealand to Scotland to the US demonstrated outside of Starbucks stores. The coffee ceremony in Addis Ababa represented the culmination of these global actions.
]]>But lately that medicine has become harder to come by as pharmaceutical corporations have priced poor people out of the market. Five years after the World Trade Organization's members unanimously reaffirmed developing countries' rights to produce, export, and import affordable copies of patented drugs, rich country governments keep breaking their promises.
Countries like the US are forcing developing nations to accept free trade agreements that violate the spirit of the WTO's decision on medicine patents. The provisions contained in US-negotiated free trade agreements would restrict the availability of generic drugs; people who can't afford brand-name medicines for infectious diseases like HIV/AIDS or for chronic illnesses like diabetes or heart disease would have to go without.
This fall, Oxfam's partner, the Educational Network for Global and Grassroots Exchange, brought three Thai HIV/AIDS activists to New York, Washington DC, Pennsylvania, Texas, Illinois, Minnesota and California to speak out against the proposed US-Thailand Free Trade Agreement. The tour was part of Oxfam's campaign to change trade rules that favor rich countries over poor people and company profits over public health.
"Americans don't know much about the HIV/AIDS epidemic in Thailand or the negative impact that a US free trade agreement would have on the cheap drugs that the government makes," said Matthew Coghlan, Oxfam's Regional Trade Policy Officer in East Asia. "This tour gave the Thai speakers the chance to educate Americans about what's really at stake."
Boripat Donmon, or Pii Muu as he's known, has been living with HIV for 13 years. During that time, he has become an instrumental leader in the fight for greater access to HIV and AIDS medicines in Thailand. His organization, the Thai Network of People Living with HIV/AIDS, gathered 50,000 signatures from the Thai public to lobby the Thai government to revise its national health policies. With pressure from hundreds of other organizations mounting, the Thai government announced last year that it would include treatment for HIV and AIDS in the national health insurance plan, commonly known as the "30 Baht Scheme."
Since then, though, people like Pii Muu have been forced to stop treatment. As they become resistant to older drugs that are manufactured by the Thai government, they must take newer drugs still under patent to prolong their lives. But currently patent rules give brand-name companies exclusive rights to market their medicines for 20 years, which allows them to charge more than most sick Thais can afford.
"The situation will only worsen if the US-Thailand FTA is approved," Pii Muu said during a stop on the tour in New York City. US free trade agreements severely restrict the ability of developing countries to ensure availability of generic versions of patented medicines—the only proven way to lower prices. "Most Thais make $140 a month—way below what patented medicines cost," he continued. "I don't know how anyone will be able to afford them with an FTA."
Sang-Siri Teemanka, also known as Pii Tui, agreed. An organizer with Thailand's Aids Access Foundation, she has also spent much of her career campaigning to get the Thai national health system to offer affordable anti-retroviral medicines.
"The problem now in Thailand is that the basic treatment manufactured ... at the cheap price will become ineffective for some patients after just three to five years. They will need to change medicines, and the new drugs are patented by the giant foreign pharmaceutical companies," Pii Tui said. "These drugs are very expensive."
Negotiations for a free trade agreement with the US are a contentious issue in Thailand. In January 2006, thousands of people took to the streets in Chiang Mai, Thailand to protest their lack of involvement.
The Thai activists touring the US said they want their government to recognize the people's rights to shape the trade rules that would have real effects on their daily lives. Specifically, the Thai activists asked that the government educate the people about the US-Thailand FTA, consult with them when negotiating it, and invite them to participate in decision-making.
They also asked that Americans lobby the US government and the WTO to help poorer countries like Thailand assert their right to make available generic versions of the patented drugs.
"We want the US to understand that the FTA is not balanced," Pii Tui said. "Access to medicine is very important to Thailand. It is not like CDs or computer software. People's lives are at stake."
]]>While the Farm Bill does little to help poor farmers in the US, it actually harms rural communities around the world. After receiving massive subsidies, US cotton farms produce more than they otherwise would, and sell their surplus at less than the cost of production. These subsidies hurt African cotton farmers by reducing the world price of cotton and shrinking their share of the market. This situation is not only unfair; it violates international rules set by the World Trade Organization.
]]>Patented medicines continue to be priced out of reach for the world's poorest people. Trade rules remain a major barrier to accessing affordable versions of patented medicines (generic medicines).
The prevalance of debilitating and life-threatening diseases in poor countries is growing, but medicines are simply not available. Urgent action is needed.
]]>Launched by Red Tomato, one of Oxfam America's partners, in collaboration with two other organizations, Oké USA is a new, Massachusetts-based tropical fruit importer with a simple mission: To improve the lives of poor banana farmers and workers by making sure they get a fair price for their fruit.
"The banana industry is a pretty brutal industry," said Jonathan Rosenthal, Oké USA's chief executive officer. "In Ecuador, a typical banana worker earns a couple of dollars a day, and if you get sick or someone in your family gets sick, you're in trouble. If people don't have their basic needs met, it's hard to envision a better future."
But hope for that future is what Oké USA wants to help banana workers build, and fair trade is the engine that will drive it.
"Fair trade is a whole economic model based on direct trade, fair price, dignity, and collaboration," said Rosenthal. "With fair trade, small farmers are getting a higher price and they're getting it directly."
In a way, the birth of Oké USA completes the circle for Red Tomato, a non-profit marketing organization that helps small farmers in the northeast and minority farmers in the southeast gain brand loyalty and better prices for their produce through large supermarket chains. Its business model is based on principals that include fair prices for farmers and a commitment to ecological farming.
Michael Rozyne is the founder of Red Tomato. With Rosenthal and Rink Dickinson, he was also a founder of Equal Exchange, which pioneered the fair trade coffee industry in the US. Now, carrying the spirit of those two enterprises to a new level, Red Tomato and Equal Exchange have joined forces with AgroFair, a European-based fair trade company jointly owned by growers and NGOs, to start Oké USA.
"We aim to build a fair trade business that changes the terms of trade in bananas just as we did in coffee-challenging the cut-throat race to the bottom of the big banana companies," Rosenthal told supporters in an e-mail announcing the new venture.
At the head of that race are a handful of giant importers, some of whom own their own ships and banana plantations and who are striving to increase their profits by cutting production costs wherever they can. For banana workers and small growers, those cuts translate into shrinking wages and dangerous working conditions.
"Traditionally, workers get very low wages and are exposed to awful chemicals and have health problems," said Shayna Harris, an Oxfam America coffee organizer. "The banana industry is fraught with human rights abuses."
In Ecuador, the largest banana exporter in the world, the government has set the legal minimum price for bananas at $3.35 for a 40-pound box, said Jordan Bar Am, Oké USA's operations manager. But in reality, he added, some farmers get as little as 80 cents. By contrast, bananas sold by small-scale farmers on the fair trade market command $7.75 for the same 40-pound box.
"That's the price that's needed to cover the cost of production and allow farmers to invest in the futures of their businesses and communities, and to provide adequate health care and send their kids to schools," said Bar Am.
Oké USA is now forging relationships with small-scale banana farmers, such as those in Ecuador's El Guabo cooperative, to help them get their products directly to the American market. Besides higher prices, farmers also receive a fair trade premium that helps them strengthen their communities by investing in things like education, clean water, and housing.
"Oké USA is a little guy with a big mission going up against a big marketplace," said Jaeda Harmon, a program officer for Oxfam's US regional office. "Its hope is that by working with small farmers and non-governmental organizations, and promoting consumer awareness, they'll sell a quality product that will give the farmers a chance."
Oxfam America has helped the whole process along by providing a grant that laid the groundwork for Oké USA's launch, as well as giving Red Tomato a two-year general support grant that included exploration of the joint venture with AgroFair.
Now, the hard work has really started for Oké USA.
The company received its first shipment of 100,000 fair trade certified bananas-about 38,000 pounds-on August 17 in Boston. After parking them at a ripening facility for four days, Oké USA shipped the bananas throughout New England to about 70 different locations including co-op supermarkets, natural food stores, and college campuses. Since then, eight more shipments have reached Boston's shores and found their way into the bellies of Americans who, on average, each eat 33 pounds of bananas a year.
Regardless of how fast people consume them, the fruit is perishable-and that's just one of the mammoth challenges confronting Oké USA in this venture. Bananas are not like coffee: They can't sit on the shelf for weeks.
"With bananas, I'm bringing in 38,000 pounds and they can go bad in less than a week, so I've got to move them all the time," said Bar Am. "The perishability factor is huge."
Besides that, Oké USA is going head to head with the biggest banana companies in the country, and it doesn't have millions of dollars to spend on marketing. Educating consumers about the story behind fair trade bananas will be key-particularly as the retail prices for the fruit range from 69 cents to 99 cents a pound.
But once consumers are sold on the concept behind fair trade bananas, they might convince their local supermarkets to buy into the idea, too.
"Supermarkets are incredibly sensitive to consumer demand," said Bar Am. "If they find out it's popular, and there's a hook, they'll get behind it."
To help spread the word, Oké USA and Red Tomato sponsored a three-farmer tour of New England October 22 -28. Among the farmers were Sylvia Arevalo, a banana grower in Ecuador. Sylvia is a founding member of El Guabo cooperative, a pioneer in fair trade for producers. Sylvia raises both organic and conventional bananas, for which she receives a fair price that helps support her family and community.
The tour also featured Shirley Sherrod, Georgia director of the Federation of Southern Cooperatives, representing black family farmers in the southeastern US, and several New England fruit and vegetable growers. All spoke about their struggles to maintain family farming in a global economy. A commitment to ecological production methods, fair prices, and top quality produce are the common ground that connects not only Red Tomato and Oké USA, but also these farmers and others like them who depend on fair trade for their future.
]]>“I don't think you can come away from such a trip without some realization that our agriculture policy is shameful,” said Leo Tammi, a commercial sheep producer in Mount Sidney, Virginia. “We went to bear witness, and we've seen theft - we saw these livelihoods being stolen because of our government’s policy.”
Oxfam has been campaigning for the reform of US agriculture policies, which encourage overproduction of commodity crops, such as rice, cotton and soybeans. According to the international aid organization, the surplus is dumped on international markets at prices well below the cost of production, undermining local production, threatening the livelihood of millions of farmers and depriving developing countries of earnings and market share.
“Because of subsidies, the price of commodities has decreased to a point where the village receives no profit, preventing them from building a school, or have a health clinic, or even to invest in equipment that could improve their farming,” said Jim French, a rancher from Reno County, Kansas and an organizer with Oxfam America. “The people we met live always one drought or natural disaster away from famine and displacement.”
“The poverty struck me the most because it is so widespread,” said Ken Gallaway, a third-generation, medium-scale cotton and corn farmer from near Lubbock, Texas. “There's just no comparison between the living conditions in the US and in West Africa.”
“We have a lot of things in common with farmers around the world,” said Charlie Melander, a wheat farmer from Salina, Kansas. “Farmers in the villages we visited shared their concerns over weather, lack of rain, yields, production costs and profitability.”
“These folks are struggling and even as great as that struggle is, we were welcomed with open arms everywhere we went, which was a little surprising considering where we came from,” said Terry Steinhour, who grows corn, soybeans and cattle in Greenview, IL. “If every farmer in the US saw what we saw, it would change their opinion on subsidies.”
“I saw a glimmer of hope because they saw hope in us,” Dexter Randall a dairy farmer from North Troy, Vermont. "We may come from very diverse areas, but we all have one thing in common: the survival of the family farm, not just in the US but across the world.”
EDITOR’S NOTE: Tour participants and Oxfam spokesperson are available to speak to speak with journalist one-on-one. For more information, please call Laura Rusu at 202-496-3620 or 202-459-3739
]]>After the ICO’s May meetings finished in London, ICO members acknowledged this week that it was important for small-scale family coffee farmers, who produce of the majority of the world’s coffee, to make a decent living. However, the ICO failed to come up with specific proposals to solve the ongoing economic crisis facing 25 million of these producers.
“The ICO is talking about addressing issues of environmental and social responsibility – but small farmer representation within the ICO is the only way to effectively address the economic inequities faced by small-scale family coffee farmers and farm workers in the supply chain,” said Dagoberto Suazo, head of the La Central coffee cooperative and Honduran delegate to the ICO.
“Farmers’ voice in these debates is critical in creating true economic sustainability in this sector – ensuring farmers can cover the cost of their coffee production and meet the essential necessities of life such as providing food, education and basic healthcare for their families.”
The ICO first began discussing the future of its operating charter, the International Coffee Agreement (ICA), in 2005. This meeting was a chance to make real progress in agreeing on a new charter that would make solving the world coffee crisis a real priority. However, talks continue to move at a snail’s pace.
“We are asking that small-scale family coffee farmers and farm workers have equal representation in the ICO’s advisory forums,” said Seth Petchers, coffee lead for Oxfam’s Make Trade Fair campaign. “Corporate interests are represented and have dedicated forums for discussion within the ICO – so it’s only reasonable that the people who grow most of the world’s coffee also have a say in the process.”
The lack of progress at these ICO proceedings was further reflected by the organization’s refusal to allow Oxfam to attend the meeting via temporary observer status. While Oxfam was allowed to make a presentation to the council, there was no opportunity for the organization to engage in critical dialogue.
Oxfam, an international development organization, works all over the world with civil society organizations representing coffee farming communities and their concerns. Oxfam is in a unique position to propose tangible, constructive solutions based on its relationships with these communities and organizations representing small coffee farmers.
At this week’s meetings, several ICO delegations submitted statements that emphasized the need to work toward a more sustainable coffee sector, information sharing within the supply chain, and access to credit for farmers– all issues that impact the ability for small coffee farmers to make a decent living and support the urgency for small-scale coffee farmer and farm worker voice within the ICO. However, no commitments were made on these topics.
For more information, contact Helen DaSilva at +617-331-2984 or hdasilva@oxfamamerica.org. To learn about Oxfam’s recommendations for the renewal of the ICA, read the Grounds for Change report at www.oxfamamerica.org/ico.
]]>With the US looking to increase trade with Africa and Asia as well, Oxfam and its partners knew the negotiations around DR-CAFTA would set the stage for the US free trade agenda.
"In the US, this was a symbolic vote and symbolic debate. It was about much more than US trade with these Central American countries," Weinberg said. "For Oxfam and others, it was important to draw the line in the sand to say 'stop negotiating trade rules that fail poor people.' Our message to the US Congress and administration is 'get back to the negotiating table at the World Trade Organization to ensure a meaningful outcome that addresses key concerns for development.'"
The campaign operated on several levels. In Central America, civil society groups largely barred from democratic processes worked hard to open up avenues of debate with their government representatives negotiating the agreement. They also carried out grassroots education campaigns and mobilized people from across their countries to pressure their governments to stop DR-CAFTA.
At the same time, Oxfam sponsored delegations from all six Latin American countries that are party to the agreement.
Ten groups—made up of economists, small-scale farmers, generic drug company representatives, women's rights activists, environmentalists and former elected officials—came to Washington, DC, between 2003 and 2005 to speak directly with Congress members and their staff.
"It was an education for many in the US Congress, as well as a capacity building exercise for those who participated, because the people who came up learned a lot about how the US Congress and political system functions," Weinberg said.
At the same time, elected officials in the US learned about the reality on the ground in Central America, which provided a different story than the ones they constantly heard from Central American ministers and ambassadors. In one example, Oxfam America helped facilitate visits by rice farmers from Nicaragua and the Dominican Republic last April. They met with 20 different undecided members of Congress and their staff, and helped them hear directly from farming communities vulnerable to low-priced imports from the US. Congressman Sherrod Brown (D-OH) and his staff heard this message about rice, and issued a statement to his colleagues in Congress explaining the potential for unfair trade.
"While Central American countries will be forced to eliminate import tariffs on rice, the United States will continue to maintain generous subsidies for domestic rice producers. The US produces $850 million in rice each year, but subsidizes the industry to the tune of $1.3 billion; $450 million over the market price. These artificial supports lead to dumping on the international market, distorting trade. Huge agri-business reaps the profits, as 20 percent of US rice producers receive 85 percent of price support revenues," the statement read.
"Central American rice producers face an uncertain and bleak future with an imminent flood of unfair imports."
]]>Then there was the way DR-CAFTA was negotiated. The US insisted that the entire agreement be developed in just one year, and that the Central American countries negotiate as a bloc. This was an ambitious request, and asked a lot of countries which had little capacity to negotiate trade agreements with an economic superpower.
As DR-CAFTA was being negotiated, the countries in the region had few meaningful democratic traditions in place. The poorest and least politically connected members of society were unable to influence the negotiations. And with elite business interests dominating the input to trade ministries, DR-CAFTA was less likely to really help the poor farmers and others who really needed to experience the benefits of increased trade.
"Most of the region's organized poor were skeptical that a free trade agreement with the United States could in any way help improve their situation," said Thea Gelbspan, Oxfam America's Program Manager for Latin America. "DR-CAFTA ignored the rural poverty so many Central American farmers live with, and its claims to guarantee economic growth for the region weren't backed up by the policies it contains."
To address this concern, Oxfam America gave grant funding to a coalition of economic research and advocacy organizations working to inform the public about the details of the agreement, and seek meaningful participation by all members of society. Called "Iniciativa CID," the group included organizations in Nicaragua, El Salvador, Guatemala, and Honduras.
Members of Iniciativa CID carried out research projects to inform legislators about the concerns of farmers and low-wage workers, provided training to farmers and farm workers about the DR-CAFTA proposal, and helped bring together citizens and their elected representatives to discuss international trade and poverty.
"The rules of the game really need to be changed... as well as the content of the agreements," said Rene Rivera, an economist at El Salvador's National Foundation for Development.
]]>DR-CAFTA is a regional trade agreement between the US and Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and the Dominican Republic. If approved, the agreement would further open Central American economies to US exports and foreign investors. It would reduce local decision-making and fail to ensure international labor and environmental standards.
With Oxfam's support, representatives from El Salvador's FUNDE, Guatemala's CIDECA and Nicaragua's Centro Humboldt met with US Congresspeople and their staff.
Oxfam provides grants to the Central American partners, which lobby against DR-CAFTA and educate citizens about the consequences of the trade agreement, if ratified.
"Oxfam has allowed us to do a lot of research. And Oxfam has been instrumental in helping us come to the US to say, 'We really don't want CAFTA,' face-to-face," said Mario Rodriguez, 40, an economist specializing in intellectual property with CIDECA.
It's important for US citizens to lobby their Congressional representatives to make trade fair. But it also makes a big difference when Central American civil society representatives can speak directly to the US Congress to explain how their countries' development will be affected, said Stephanie Weinberg, Oxfam America policy advisor.
In addition to providing direct support to the Central American groups, Oxfam America also fosters connections between US farmers and farmers in other countries around policy debates like CAFTA. Working with US partners such as the National Family Farm Coalition, Oxfam has funded exchanges where American farmers from the National Family Farm Coalition meet with farmers in Mexico and Central America, and vice versa, with Mexican farmers touring US farms.
The exchanges help farmers from the North and South understand each other's situation and make tangible connections, farmer to farmer, about the impacts of agricultural and trade policies on their daily lives.
"My ability to explain to my fellow farmers why we should help didn't come naturally," said George Naylor, president of NFFC and a farmer from Iowa. "Meeting with farmers from other countries helped me understand."
After hearing the stories from the Central American and Mexican farmers he met, Naylor said he realized that CAFTA would further depress prices abroad and push more farmers off their land.
Any farmer can understand that threat.
"When everybody in the family ends up working off the farm, then what you used to think of as a 'family farm'—where everyone is involved in caring for the land and producing food—can't happen anymore," Naylor said.
]]>I am writing in regard to the imminent Congressional action on the US-Peru free trade agreement, titled the US-Peru Trade Promotion Agreement (PTPA). Oxfam America believes that trade can be an engine for development and poverty reduction, and we strongly support measures to improve trading opportunities that can reduce poverty. However, we also believe that trade agreements must take into account the economic and social disparities between trading partners and include rules that allow the poor to realize these important potential benefits. Unfortunately, as a recent Oxfam report indicates, the PTPA will cause greater hardship and could undermine development in Peru. For this reason, Oxfam is calling on Members of Congress to oppose this legislation.
The PTPA, as negotiated, will harm many thousands of Peru's small farmers who supply food to their domestic market, as they will be forced into an unfair competition with subsidized US agricultural exports. The agreement will limit access to affordable new medicines in Peru by unduly extending the monopoly rights of the international pharmaceutical industry. The PTPA will also restrict Peru's ability to regulate foreign investment to ensure it serves national development.
Agriculture
More than half of Peru's nearly 28 million inhabitants live in poverty, many of them in rural areas, and the PTPA will adversely affect the livelihoods of many of the poor if passed. Agriculture is the main source of jobs in rural areas, generating nearly a third of all employment nationally. The vast majority of Peru's agricultural production is for domestic consumption. The trade agreement makes permanent the export opportunities that Peru currently enjoys under US trade preference programs and will thereby benefit certain export sectors. Yet barely 8 per cent of Peruvian agricultural production is for export, only one third of which is destined for the US (coffee, as well as non-traditional products such as asparagus and artichokes).
On the other hand, the PTPA will fully eliminate tariff protection on basic crops, which the US International Trade Commission has estimated will lead to large increases in Peru's imports of US basic grains, such as wheat, rice and corn. This means that Peruvian farmers who supply their domestic market will be undercut by heavily subsidized, cheaper US imports that are dumped in Peru below their real cost of production. As a result, there is a risk that many Peruvian farmers who are no longer able to earn a living by producing basic grains will turn to coca cultivation, thereby undermining years of US foreign policy and drug eradication efforts.
It has been suggested that Peru's farmers could be compensated for the loss of their livelihoods. However, Peruvian agricultural leaders have stated that farmers would need close to $1 billion to compensate for their annual losses from the PTPA, nearly 30 times what the Peruvian government has committed to make available. This is also a far less effective way to promote development than providing full and effective safeguards for crops that are vital to livelihoods and food security.
Access to Medicines
The PTPA could lead to significant increases in medicine prices, another issue of major concern for poor people in Peru. Stringent, new intellectual property provisions in the PTPA will restrict generic competition and lead to higher prices for new medicines in Peru. Only half of all Peruvians have health insurance and about one-fifth of the population has no access to health care. Medicines account for one-quarter of all public health expenditures and 44 percent of household spending on health. People living in poverty are, for the most part, not insured and must either pay out of pocket or receive no treatment at all. Given these conditions, any increase in the price of medicines is likely to have significant negative consequences for the
The PTPA will unduly extend monopoly protections for the international pharmaceutical industry, which will mean that fewer Peruvians, particularly the poor, will be able to get the medicines they need. A study commissioned by the Ministry of Health in Peru has shown that provisions in the PTPA will increase the cost of new medicines, and the Health Minister has reported that an increase in public health care expenditures will likely be required in future years. Imposing new burdens on an already cash-strapped health care system will further exacerbate poverty and inequality in Peru. The primacy of public health over private patents has already been well-established at the World Trade Organization (WTO). Yet the PTPA ignores this by restricting the use of public health safeguards allowed under the WTO and requiring adoption of new intellectual property rules that exceed the WTO standards.
Investment
The rules on investment in the PTPA give foreign companies leeway to challenge investment regulations, such as laws to protect the environment and public health. This will undermine Peru's ability to ensure that foreign investment contributes to national development, rather than exacerbating poverty. For example, Peru's Law for the Promotion of the Agricultural Sector grants the farming industry certain tax benefits if at least 90 percent of its inputs are sourced nationally. Under the PTPA, this law could be challenged and potentially repealed. Likewise, efforts to regulate the operation of the mining industry to address its health and environmental effects could be challenged.
Conclusion
While the economic impact of the PTPA on the US is likely to be negligible, the economic and social costs to Peru will be high, especially among the poor. Peruvian agricultural exports to the US will expand little, as noted by the ITC, given that these products have already enjoyed duty-free access to the US market under Andean trade preference programs for the last 15 years. Contrary to promoting stability in Peru and the Andean region, the PTPA is likely to exacerbate the existing problems of poverty and inequality and undermine regional integration and development.
Although the PTPA has been actively promoted by Peru's outgoing president and approved by its lame-duck Congress, there is deep concern among much of Peru's population about agreement. Broad cross-sections of civil society in Peru have actively opposed or questioned the trade agreement. The PTPA was a significant campaign issue in the recent presidential elections, and the winner, incoming President Alan Garcia, campaigned on a promise to closely review the agreement's potential impact and renegotiate it if necessary.
Oxfam believes that in order for trade to truly be "win-win" for developed and developing countries, trade rules should be negotiated under the multilateral trading system at the WTO. The Doha Development Round was launched with the understanding that it would deliver on the promise of development for poor countries. A successful conclusion to these WTO negotiations that provides new opportunities for developing countries will also benefit the US by promoting more stable economies and increased purchasing power in the developing world.
Bilateral trade deals like the PTPA complicate the global trading system and divert efforts to achieve a more valuable global agreement at the WTO. Furthermore, the PTPA includes rules that weaken the ability of Peru to enact policies that reduce poverty and further national development.
For these reasons, and because of the harm it will cause to the poor in Peru, I urge you to vote no on the US-Peru free trade agreement.
Sincerely yours,
Raymond C. Offenheiser
President
I believe there are interests that we share that are very important to the work we do in Nicaragua—natural disaster preparedness work, extractive industries, and irrigation issues.
Oxfam also helps build campaign support, political understanding and meaningful participation.
We have firsthand information about what's going on with CAFTA. We are trying to provide that information to those people who don't have access to it.
We are influencing public opinion and pressuring the government to prevent the agreement from being ratified in the countries throughout Central America.
At the international level, we are trying to convince members of Congress who are undecided that CAFTA is not the thing to do.
CAFTA will have very serious consequences on the Central American environment. Even though there is a chapter on the environment in the agreement, it is not enough to mitigate the negative effects CAFTA will produce if approved.
The intellectual property rights provisions will allow exploitation of all the local environmental capital that Central America has. This chapter will just benefit big corporations at the expense of local companies and communities.
The big corporations will tap the genetic information in tropical forests and use it for their own needs. In this agreement, foreign investors will benefit to the detriment of local businesses in Central America.
Biodiversity is an area in which Central America is very rich. And those resources are at risk under CAFTA.
Another major problem for the environment is genetically modified organisms. US agriculture allows the use of these kinds of products without a problem. If CAFTA takes effect, increased trade will bring these products to Central America. Right now, these genetically engineered products don't exist in Central America. This would lead to contamination of the local resources.
We don't know what type of problems these new seeds will introduce. We don't know what consequences there will be.
After the agreement was negotiated, the nature of the activities changed. We moved from a phase where we constructed proposals to a second stage, which involved getting information to the people about what had been negotiated.
I believe that the US Congress is near a decision. It will be very tight, a very close call. So, this is a very important time. This is the time to influence the decision.
We still have to wait for the final result, but we have provided them with important information so they can make an informed decision.
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