1. The Chairman recalled that, at the Council's previous meeting in June, he had concluded the discussion on this item by indicating that he would remain in close contact with delegations with a view to resuming consultations as soon as there were indications that it would lead to positive results. He had asked delegations to be ready to be called back, at short notice, for a special meeting of the Council in the event that progress could be achieved. He informed the Council that, in the light of consultations that he had held, he was now in a position to seek the Council's approval for recommendations that the Council could make to the General Council so as to resolve the matter.

2. The Chairman proposed that the Council approve the draft Decision on "Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health" contained in document JOB/(02)/217 and agree to forward it to the General Council for adoption. Furthermore, he proposed that the Council approve forwarding, along with the draft Decision, the text of the statement contained in document JOB(03)/177 to be made by the Chairman of the General Council prior to the adoption of the Decision.

4. The representative of the Philippines said that he had instructions to read a statement before the approval of the texts. In view of this, he wished to indicate that he had tried to make his statement before the Council had taken action on the matter. He stated that, while the Chairman's statement "represent[ed] several key shared understandings of Members", it did not represent all the understandings shared by the membership. The Decision did not reflect the shared understanding of Members that the undertaking assumed by eligible importing countries in the Decision to take reasonable measures within their means to prevent trade diversion of products imported under the system was strictly on a "best endeavour basis". This understanding had never been refuted by the membership in the various plenary sessions as well as in the numerous small-group negotiations that had been held on this issue. It was solely with this understanding that his delegation was agreeing to the Chairman's statement and the attached Decision. Without this shared understanding, his delegation would maintain its reservation against the adoption of the statement and the Decision.

5. With respect to the usage of the system, the understanding that the system should not be used as an "instrument to pursue industrial or commercial policy objectives" was understood by his delegation as not precluding the use of the system for purposes of protecting public health, even if industrial or commercial policy objectives were involved. A national health programme designed to provide affordable medicines for all, particularly the marginalized sectors of the population, and thus having the objective of lowering or at least offering lower prices for a broad range of medicines, did not make such a health programme and the use of the system an instrument to pursue industrial or commercial policy objectives. Hence, his delegation interpreted the understanding such that the system would not be used primarily as an instrument to pursue industrial or commercial policy objectives.

6. Indeed, the issuance of a compulsory licence for purposes of addressing a public health problem had a public interest component that was not necessarily exclusive of industrial or commercial policy objectives. The issuance of a compulsory licence had a socio-economic element in that it sought to offset the pernicious effects of monopoly rights granted to a patent holder. But as a compulsory licence was intended to curtail monopolistic or anti-competitive behaviour on the part of a patent holder, by definition, the system for compulsory licensing could be said to have an inherent industrial policy objective.

7. With respect to the element of safeguards against trade diversion being additionally required of exporting countries under the system, he said that the obligation to establish such safeguards through special packaging and/or colouring or shaping may be on the exporting countries' side. But, if it would increase the manufacturers' costs, it would not become operative under the terms of the Decision and in any case would not be passed on to the importing Member in need.

8. The obligation referred to in the statement to provide information on how a Member had made the self-determination establishing that it had insufficient or no manufacturing capacities in the pharmaceutical sector appeared to impose a new, additional burden that was not in the 16 December 2002 draft Decision. Nonetheless, the only reason his delegation shared this understanding was on the basis that neither the TRIPS Council nor any Member could reject a Member's notifications indicating its intent to use the system and providing information on its determination of manufacturing capacity. The sole prerogative for establishing insufficient manufacturing capacity was with the notifying Member. The conclusion that there was insufficient capacity was strictly up to the Member concerned. A Member could, therefore, provide as much or as little information as it deemed relevant for purposes of the understanding referred to in the statement, without needing to provide more information even if requested by another Member.

9. The Chairman asked whether he could take it that the Council was ready to transmit, as a TRIPS Council working document, the text of the Decision in document JOB(02)/2171 to the General Council for action.