TWN Info Service on Intellectual Property Issues (Jun21/09)
30 June 2021
Third World Network

LDCs obtain 13 year TRIPS transition period, but nothing on post-graduation
Published in SUNS #9376 dated 29 June 2021

Geneva, 28/30 Jun (D. Ravi Kanth) – The least-developed countries secured an extension of the TRIPS transition period for 13 years, exempting them from implementing most of the World Trade Organization’s TRIPS Agreement, until 1 July 2034.

The current transition period ends on 1 July 2021.

However, the LDCs have failed to secure the continuation of the transition period post-graduation, i.e. as they move into developing country status.

This is despite LDCs facing the worst social and economic crisis in 30 years as a result of the Covid-19 pandemic.

The 2021 Financing for Sustainable Development Report (FSDR) of the UN Inter-agency Task Force on Financing for Development has found that “COVID-19 could lead to a lost decade for development – one most pronounced in the Least Developed Countries (LDCs)”.

On 1 October 2020, Chad, on behalf of the LDC Group in the WTO (IP/C/W/668), sought an extension of the LDC transition period, for as long as a country remains an LDC, and an additional period of 12 years as a country graduates from its LDC status, to ensure smooth transition.

Under Article 66.1 of the WTO’s TRIPS Agreement, the poorest countries are exempted from implementing the obligations for protection and enforcement of intellectual property rights, due to their vulnerabilities and specific economic conditions since 2005.

So far, the exemption under Article 66.1 was extended twice from 2005 to 2013, and from 2013 to 1 July 2021.

The draft decision of the Council for TRIPS says: “Least developed country Members shall not be required to apply the provisions of the Agreement, other than Articles 3, 4 and 5, until 1 July 2034, or until such a date on which they cease to be a least developed country Member, whichever date is earlier.”

The Chair of the WTO’s TRIPS Council, Ambassador Dagfinn Sorli from Norway, will reconvene a formal TRIPS Council meeting on 29 June to adopt the proposed draft decision, circulated in document JOB/IP/46.

The operational elements of the proposed draft decision include:

1.1. Least developed country Members shall not be required to apply the provisions of the Agreement, other than Articles 3, 4 and 5, until 1 July 2034, or until such a date on which they cease to be a least developed country Member, whichever date is earlier.

1.2. Recognizing the progress that least developed country Members have already made towards implementing the TRIPS Agreement, including in accordance with paragraph 5 of IP/C/40, least developed country Members express their determination to preserve and continue the progress towards implementation of the TRIPS Agreement. Nothing in this decision shall prevent least developed country Members from making full use of the flexibilities provided by the Agreement to address their needs, including to create a sound and viable technological base and to overcome their capacity constraints supported by, among other steps, implementation of Article 66.2 by developed country Members.

1.3. This Decision is without prejudice to the Decision of the Council for TRIPS of 6 November 2015 on “Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for Least-Developed Country Members for Certain Obligations with respect to Pharmaceutical Products” (IP/C/73), and to the right of least developed country Members to seek further extensions of the period provided for in paragraph 1 of Article 66 of the Agreement.

According to sources, the LDCs came under intense pressure from some major developed countries as well as from the WTO DG’s office to drop their demand for a “post-graduation” element in their proposal for the extension under Article 66.1 of the TRIPS Agreement.

Earlier, the LDCs came under a bit of “arm-twisting” from the five major developed countries – the United States, the European Union, Switzerland, Japan, and the United Kingdom, sources said.

Due to the rapidly spreading COVID-19 pandemic, the LDCs are being placed in a much worse basket now than in the past, necessitating special treatment on several fronts from the US and the EU, said Nobel Laureate Joseph Stiglitz in a recent report.