U.S., Argentina to Sign Electronic Commerce Pact
Rio de Janeiro, Oct. 15 (Bloomberg) -- U.S. President Bill
Clinton will likely preside over the signing of an agreement
tomorrow that will pave the way for the sale of U.S. products
to Argentina over the Internet, Clinton aides said today.
Clinton administration officials are working out final
details of the accord with Argentine officials to standardize the
government regulations, terms, and local tax provisions that
apply to any electronic commerce over the Internet, Commerce
Secretary William Daley said today.
Argentina intends to sign on to a protocol Clinton
introduced in the U.S. in July that regulates electronic
commerce, Daley told reporters on a plane bound for Rio de
Janeiro. Clinton was in Rio today on the second leg of a three
country, week-long South American tour. The president traveled to
Argentina later today.
''We're hopeful we'll get some agreement, we're working out
the final details,'' Daley said. ''We hope to sign it tomorrow.''
The pact could be good news for any company that does work
with or on the Internet, from Seattle-based software maker
Microsoft Corp. to General Electric Co. which does millions of
dollars a year in procurement business electronically over the
World Wide Web.
''We're always encouraged when we see any sort of
agreements,'' said Sara Alexander, a spokeswoman for Microsoft
Corp.
Biggest Problem
Software piracy is the biggest problem the industry faces,
accounting for $11.2 billion in losses worldwide, Alexander said.
''It's a big problem everywhere,'' she said, adding that the
industry loses about 71 percent of potential revenue in Argentina
through piracy. Still, that is down nine percentage points from
the years before when the industry first started to take hold.
''You sort of see a pattern,'' Alexander said. When the
computer industry first starts to blossom in a country, software
theft is high because demand is high, then as more and more
people acquire computers and software from legitimate businesses,
piracy tends to fall, she said.
The U.S. was seeking an intellectual property rights
agreement with Argentina, something U.S. pharmaceutical companies
have pushing the Clinton administration to do for some time. But
a bill that would have installed significant regulations over the
stealing of patented and proprietary products died in the
Argentine legislature several months ago.
National elections in Argentina at the end of the month have
killed any hope of getting an agreement this year, Daley said.
U.S. pharmaceutical companies, especially Eli Lilly & Co.,
Upjohn Co., and Pfizer Inc. have complained about Argentine knock-
offs of their products and want some sort of intellectual
property rights agreement.
Powerful Industry
''The pharmaceutical industry in Argentina is very powerful
and was able to kill a good bill they had last spring,'' Daley
said. ''We're hoping after the elections there will be
legislation, and we'll see it resolved next year.''
The price of waiting is high.
Failure to sign a treaty means a continued bleeding of more
than $500 million dollar in sales for U.S. drug companies whose
products or data are now pirated freely, said Mark Grayson, a
spokesman for the Pharmaceutical Research and Manufacturers of
America, the leading industry trade group.
''Argentina has always been at the top of our list'' of
patent violators, Grayson said.
To make matters worse, ''faulty'' intellectual property law
Argentina recently passed has made the data from drug trials --
coveted blueprints for developing a medication -- virtually
unprotected, he said.
In some instances, Grayson said, pirated versions of brand
name drugs have become available in Argentina before the original
has even been approved by the Food and Drug Administration.
''They've ... legalized the piracy of pharmaceutical test
data,'' he said.
If intellectual property rights legislation were to pass
through the Argentine legislature, it could be a boon for the U.S
pharmaceutical industry and the region, Daley said. Brazil passed
a strong intellectual property rights agreement a year ago and
U.S. pharmaceutical companies now estimate they will pour some $6
billion into Brazil.
''We've been trying to explain that it is good for all of
us,'' Daley said. ''It's not the sort of issue we'd hound them on
constantly, but it is a serious problem that needs to be
addressed.''
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