WASHINGTON -- The United States and South Africa have reached an agreement aimed at resolving a looming trade dispute over the production of patented drugs to treat AIDS.
The U.S. trade representative, Charlene Barshefsky, announced Friday that South Africa had pledged to abide by World Trade Organization rules when it enacts a new law intended to make it easier to import and produce the drugs locally at lower costs.
The United States, in turn, pledged to drop its demands that South Africa revise parts of the law that had prompted a legal challenge by U.S. and international pharmaceutical companies. Their challenge had blocked the law.
Barshefsky also indicated the administration would step back from a review process that could have led to trade sanctions against South Africa.
Vice president involved
Although the dispute involved arcane, complex trade and patent practices, it generated considerable attention because advocates for acquired immune deficiency syndrome patients have staged noisy protests at several campaign appearances by Vice President Al Gore, including the speech in June in which he officially announced his candidacy.
Gore became a focus because of his meetings with South Africa's president, Thabo Mbeki, and the advocates blamed him for Barshefsky's tough trade stance against South Africa.
Protesters said Gore was the Clinton administration's point man in helping the pharmaceutical industry make money off AIDS drugs.
About 300 protesters gathered in Philadelphia in June to chant, "Gore's greed kills!"
"The vice president is pleased this issue has been resolved," a spokesman, Thomas M. Rosshirt, said. "He is eager to continue his work with Mbeki to confront the crisis of AIDS in Africa and around the world."
6 million infected
The law at the heart of the issue was passed in 1997 with the hopes of giving South Africa's AIDS patients access to less expensive versions of drugs to treat the AIDS virus, which has infected an estimated 6 million of the country's 44 million people.
The law would apply to all medicines, but the focus of the dispute has been on AIDS since AIDS drugs are so expensive that they are out of reach for most South Africans.
A coalition of U.S., European and other pharmaceutical companies have challenged the law in South African courts, saying it infringed on their pharmaceutical patents.
Imports and generic drugs
The most controversial parts of the law involved two provisions to lower the price of AIDS drugs. The first would allow the import of commercial drugs from countries where they are available at a lower cost, a practice known as parallel importing.
The second, called compulsory licensing, would allow the South African government to license local companies to make generic versions of the drugs.
The World Trade Organization allows both practices under certain conditions, but the pharmaceutical companies, backed by the administration, opposed them.
A U.S. trade official said Friday that the law was written too broadly and could allow abuses; the official said the administration was willing to back down from its position now that South Africa has pledged in a letter to strictly abide by the trade organization's conditions.
Eric L. Sawyer, a spokesman for Act-Up, the advocacy group that has been organizing the protests against Gore, welcomed the decision, calling it a concession by the administration that was "a positive step" toward making AIDS drugs more accessible.
"It shows Vice President Gore has been listening to us," he said.
The agreement does not resolve the ultimate status of the law, which has not taken effect pending the pharmaceutical companies' legal challenge.
Last week the companies announced they would suspend their challenge and seek a negotiated settlement. South Africa's health minister, Manto Tshabalala-Msimang, has said the country was considering redrafting the law.
"I am hopeful that this suspension, coupled with progress made between our two governments, will enable all interested parties to develop the best possible approach to addressing this serious situation, while protecting international property rights," Barshefsky said.