explain me this pargphragh from A to Z

Immediately following the establishment of the WTO in 1995, the Jordanian Industrial Development Bank (IDB) published a study in which it warned against the possible impact of TRIPS on pharmaceuticals in Jordan. The study concluded that stronger protection for IPRs will cause local production to suffer in terms of both investment and output; employment level shall decrease due to destruction of local production; not only will imports of drugs increase but also exports will decline with negative effects on the balance of payments; prices of medicines in general shall increase remarkably due to the monopolistic nature of patentee's supply and the opportunities for R&D in finding new processes to manufacture patented final products shall be eliminated. It was not whether, but rather, when these implications will materialise71.

68 Swalha, Francesca (2003). Euro-Jordan association agreement: implementation on track-European diplomats, Jordan Times, October 20, Amman-Jordan; Whiteman, Richard (2001). Five Years of the EUs Euro-Mediterranean Partnership: Progress without partnership? Centre for the study of Democracy, London, University of Westminster; Kardoosh, Marwan (2002). Jordan-EU association agreement; a critical assessment', Jordan Times, July 11, Amman-Jordan; Fanek, Fahed (2003). QIZ- a useful addition to the industrial sector, Jordan Times, September 8, Amman-Jordan; Fanek, Fahed. (2003). US replacing Iraq as first trade partner, Jordan Times, October 6, Amman-Jordan.

69 International Monetary Fund. (2004). Jordan: Selected Issues and Statistical Appendix, Washington, IMF, Report No. 04/121, p. 24.

70 Farawati, Ola (2004). EU, Jordan try to salvage agreement, The Daily Star, January 15, Amman-Jordan. 71 Industrial Development Bank (IDB) (1995). Study for the development of the pharmaceutical industry in Jordan. Final Report draft, Amman, IDB.

While working on the impact of TRIPS on LDCs, some specialists estimated "the direct impact of" TRIPS to "begin to be felt in developing countries only by 2005", while the "full impact - that is, the complete displacement of 'pirates' [to] materialise only by 201572". Contrary to these expectations, the direct impact in Jordan has been felt prematurely and almost immediately. Due to their limited capital resources and weak R&D capacity, Jordanian firms have not been able to compete, and will be unlikely to compete with giant firms from industrialised countries in the short- and medium-term, through innovation and production of new medicines. They have thus abandoned the production of modern drugs. The new strategy is now called "branded-generic", meaning "we search for the formula on the internet and other sources and then we produce it. Some copy the formula literally but most modify it a little bit then produce it under a different name", as long as it is no longer protected73.

Jordanian pharmaceuticals have thus been relegated to the production of old drugs that graduate from the 20-year patent protection period. As the head of the Arab Union of the Manufacturers of Pharmaceuticals and Medical Appliances (AUPAM) commented: "The discontinuation of manufacturing up-to-date medicines... pushed the Jordanian drug industries back by at least 20 years... a period equivalent to the period of patent protection", causing it to "lag behind similar industries in the world74".

So far, not even a single multinational pharmaceutical firm has opted to serve the Jordanian market by establishing fully owned production facilities there. Trade, particularly exportation, and to a lesser extent licensing agreements (Table 3) has been their favourite approach. Drug imports into Jordan have increased steadily since the mid- 1990s, rising from US$ 58 million in 1990 to more than US$ 203 million in 200375. During the first eight months of 2003 alone, pharmaceutical imports already surpassed the 2002 total pharmaceutical imports by more than US$ 25 million, thus registering the highest growth rate for pharmaceutical imports since the mid-1990s76 .

Anecdotal evidence also suggests that the price of medicine in Jordan, which is largely demand inelastic, has risen sharply in recent years, particularly the prices of imported drugs and that which is produced locally but under international licensing agreements. The same source also suggested that the share of local firms in the domestic market has declined to 30 per cent in recent years, down from 45 per cent before 200077

In order to compensate for the loss of shares in the domestic market, local firms sought and have successfully managed to increase their exports to foreign markets. But Jordan is "not selling to European or North American countries. We are only selling to poor Arab and African countries that cannot afford to buy European and North American products. Most of the countries we export to are not members in the WTO, and therefore still provide protection for our products. Thats how we will survive during the coming five years, we are working very hard and we will keep on working very hard searching for

countries and markets that are not registered with the WTO"78. Exportation to Europe and US has been hampered by high health and safety standards set by the European Union and North America. As a local exporter stated:

"We cannot export to Europe or America because of their complex and high health and safety standards. This is despite the fact that we are the only Jordanian pharmaceutical firm with more than one patent registered under our name in Europe"79.

Earlier work has warned that signing agreements with industrialised countries alone will not automatically lead to an increase in the volume of exports from developing countries. Unless LDCs are capable of meeting and satisfying the high quality requirements of international markets, particularly of industrialised countries, their exports might actually suffer. Meeting such requirements is currently hampered in most LDCs, including Jordan, by lack of resources, marketing skills, technical know-how to enhance productivity and up-to-date knowledge of changing quality standards, and small- and medium-scale producers.