BRAZIL, US ADVANCE INTELLECTUAL PROPERTY BATTLE TO WTO

Following last week's dramatic decision to reverse a reported agreement between Brazil's government and US firm Abbott Laboratories, the stand-off appears to be spreading to bilateral trade talks at the World Trade Organisation (WTO).

On Friday, Brazilian and US negotiators temporarily suspended possible sanctions against the US over export subsidies, worth US$4bn per year, paid to cotton farmers. Brazil estimates its annual losses from the US subsidies -- expected to be terminated in the medium term -- at US$3bn, and has reportedly asked the WTO to suspend US intellectual property rights "of an equivalent value". Brazilian sources claim the US has failed to scale back the subsidies by the agreed deadline of July 1.

Local reports do not specifically link Brazil's retaliatory measure to patents held by US firms on ARVs, but instead suggest that intellectual property rights in a number of service industries such as IT could be affected. Alternatively, Brazil could opt to impose heavier tariffs on imports from the US. Meanwhile, progress over the compulsory licensing of patented pharmaceuticals could stagnate as Brazil's government adopts a more global view of its international trade position.