TWN Info Service on WTO and Trade Issues (Jun13/03)
5 June 2013
Third World Network  

Tripping Up
LDCs, TRIPS and justice

Dr Arjun Karki

I have been closely following the ongoing trade negotiations in Geneva between the least developed countries (LDCs) and developed countries, in relation to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) of the World Trade Organization (WTO). The negotiations are increasingly turning into a battle for justice for the LDCs which is very disturbing for me and my colleagues who have been defending the interests of the LDCs.

The ‘renewable transition period’ of TRIPS exemption granted to the LDCs is expiring on July 1. LDCs submitted a group request to the TRIPS Council in November 2012 for an unconditional ‘indefinite transition period’ until they graduate from the LDC status. Article 66.1 of the Agreement mandates all WTO Members to approve the LDCs’ request once it is submitted. However, this is turning out to be a bone of great contention between the LDCs and the developed countries with the latter offering a very impractical short transition period (5 to 7.5 years) as well as attaching the no-roll-back clause which prevents LDCs from reducing intellectual property (IP) protection, even for their development needs. The current trade battle is, therefore, of justice and the right to development of LDCs and its peoples.

The WTO TRIPS Agreement enacted on January 1, 2005 established universal minimum standards on patents, copyrights, trademarks and industrial designs, among others. The TRIPS rules call on WTO member countries to amend their domestic laws and regulations to introduce stronger levels of protection for intellectual property. In order to facilitate the implementation of the TRIPS Agreement, developing countries were given five years for compliance, i.e. until January 1, 2010. The LDCs defined by the United Nations (UN) on the basis of low income, weak human assets and economic vulnerability were however treated differently under Article 66, “recognizing the special needs and requirements of least-developed country Members, the economic, financial and administrative constraints that they continue to face and their need for flexibility to create a sound and viable technological base” as well as “recognizing the continuing needs of least-developed country Members for technical and financial cooperation so as to enable them to realize the cultural, social, technological and other developmental objectives of intellectual property protection.”

LDCs thus enjoy the flexibility of a renewable transition period until they graduate from the LDC status, before which they need not implement most TRIPS Agreement provisions. Article 66.1 states that “The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period.” On this basis, LDCs were given an initial transition period of 10 years which expired in 2005 and upon request, it was again extended for another 7.5 years which expires on 1 July 2013.

It is a given that the 49 LDCs spreading over Sub-Saharan Africa, the Caribbean and the Asia-Pacific are poor and vulnerable—more than 75 percent of around 900 million population in these countries live in poverty; one fourth are under-nourished; only 63 percent have access to improved water supply sources; only 36 percent use improved sanitation; and LDCs are at the bottom of all technological and innovation indices.

Out of the 49 LDCs, 17 are landlocked developing countries (LLDCs) and 10 are small island developing states (SIDS), while 20 are mountain countries where geographical and environmental constraints pose further hindrance to development. Even though LDC greenhouse gas emission per capita is a negligible 0.2 percent, they are at the receiving end of the climate change catastrophe. Increasing sea-level rise, desertification, glacial melting, floods, earthquakes, droughts, cyclones and heat stress are already resulting in frequent loss and damage while also increasing climate migrants. The number of people in LDCs affected by extreme events has almost doubled, rising from 100 million during 1970-1979 to 193 million over 2000-2010. And, talking about political climate, most LDCs are characterised by conflict, post-conflict and politically unstable situations, with 24 of them categorised as fragile states.

Given such a grim reality, LDCs have not been able to effectively benefit from the international trading system and transform their development landscape, with their share of global trade below 1 percent. LDCs thus need continued flexibility of policy space provided by the TRIPS exemption for further knowledge production and building of sound and viable technological base for development. For instance, the current exemption allows LDCs to easily access and produce the much-needed affordable medicines and medical products, educational materials and other essential public goods including climate-friendly technologies. On the flip side, expiry of this exemption and subsequent adoption of stronger IP standards by LDCs mean that they have to pay a much higher price to access essential products and technologies while also stifling their own productive and absorptive capacities. Hence, the TRIPS exemption is a matter of life and death for the LDCs and its peoples while it is solely business and profit for the developed countries backed by their powerful corporate lobby.

Additionally, the unconditional indefinite transition period of TRIPS exemption as requested by the LDCs is premised upon the fact that it takes decades to develop sound and viable technological base to benefit from stronger standards of IP protection. This fact is clearly reflected in the 2012 UN Secretary-General’s Report on the Implementation of the Istanbul Programme of Action for the LDCs for the Decade 2011-2020 which states that “Least developed countries did not fare well compared to other developing countries both in terms of resources allocated to science, technology and innovation and the magnitude of knowledge production... In addition, these countries were not able to exploit the existing flexibilities in intellectual property right regimes and the World Trade Organization... in order to gain access to essential technologies that are used to produce essential goods and services for their populations”.

The ongoing negotiations in Geneva which is building up towards a final decision by the forthcoming TRIPS Council meeting on June 11-12 must therefore deliver on the legal obligation of WTO members to grant LDCs their request which enables the realisation of the development objectives of intellectual property protection. It must be noted that the LDCs’ request is supported by the majority of developing countries, UN agencies such as the UNDP and UNAIDS, the Global Commission on HIV and the Law, the Computer and Communications Industry Association (CCIA) whose members include Microsoft, Google, eBay, Facebook and Yahoo!, the global academia and needless to say, by LDC and non-LDC civil society in the global North and South. Nepal in its capacity as the Chair of the LDCs in the WTO is providing strong leadership and should continue to stand firm to defend the interests of the LDC peoples, by rejecting any compromise on the duration and inclusion of the no-roll-back clause. The pressure should not be on the LDCs to give in as the developed countries are legally bound to grant LDCs’ request; the pressure should instead be on the developed countries to deliver on their legal obligation.

The key opposing bloc comprising the United States, the European Union, Japan, Canada, Australia, New Zealand and Switzerland are simply making a mockery of the much touted “policy coherence” on international development cooperation. It is sheer hypocrisy that these countries themselves blatantly copied, imitated and borrowed each other’s intellectual property for their technological advancement in the pre-IP era and now they are imposing the false notion that IP is essential for development, which basically guides their current opposition to LDCs’ request. Simply put, the current dispute is uncalled-for due to the legal obligation of WTO members to approve the request of the LDCs. Therefore, the so-called rules-based WTO should comply with its rules and prove its credibility to the international community.

The author is the International Coordinator of LDC Watch

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