US and EU demand TRIPS plus concession from poorest countries

Source: TWN IP Info

30th April,2013

WTO: US and EU demand TRIPS plus concession from poorest countries

Geneva, 30 April (Sangeeta Shashikant) ­ Developed countries, particularly
the United States and the European Union, have offered a poor and
impractical deal of an incredibly short extension of 5 years with
restrictive conditions to least developed countries that are entitled to
be exempted from implementing the WTO TRIPS Agreement.
Particularly problematic is their demand that the LDCs agree to a
³no-roll-back² clause, a TRIPS plus condition that will prevent LDCs from
rolling back  (i.e. providing a reduced degree of IP protection) their
current laws, even if they adversely impact their development concerns.

The US and EU are also insisting to include in the extension decision a
section on  need-assessment on IP, to facilitate implementation of TRIPS
standards.

According to sources, this deal was offered in informal consultations
between developed countries (US, EU and Japan) and the LDCs coordinated by
Australia. The last such consultation took place on Friday, 26 April.

Last November the LDCs exercised their legal rights under the TRIPS rules,
and submitted a request to the TRIPS Council requesting an unconditional
extension of the transition period for as long as a country remains an
LDC.  The current transition period expires on 1 July 2013.

Article 66.1 of the TRIPS Agreement grants LDCs a renewable exemption from
TRIPS obligations. The rationale is that LDCs need maximum flexibility to
develop a viable technological base and address their constraints, and
that the standard of TRIPS IP protection may be an obstacle in achieving
those objectives.

The LDC request has received massive support from developing countries (in
particular the Africa Group, the African, Caribbean and Pacific (ACP
group), India, China, Brazil); industry, civil society and academics from
all over the world.

Legally, the TRIPS Agreement (Article 66.1) mandates WTO members to
approve the LDC request, once it has been submitted. However despite the
unambiguous legal rights LDCs have under Article 66.1 of TRIPS, and the
explicit obligation on WTO members to grant the extension as requested,
the US and EU continue to deny the poorest segment of the international
community their legal rights.

According to sources, during the 26 April consultation, the LDCs stressed
that their request for an extension ­ for as long as a country remains an
LDC ­ is reasonable, predictable and practical and that they continue to
be against the inclusion of any conditionality in the extension decision.
LDCs that participated in the consultation also stressed that they were
open to elements that were ³reasonable, fair and legitimate² and that
elements that constrain LDCs must be avoided, sources say.

An LDC diplomat informed Third World Network that the US and EU demand to
include a no-rollback clause is antithetical to the spirit of Article
66.1, as defined in the preamble text of the TRIPS Agreement which states:
³Recognizing also the special needs of the least-developed country Members
in respect of maximum flexibility in the domestic implementation of laws
and regulations in order to enable them to create a sound and viable
technological base².

The- no-roll-back clause does the exact opposite by narrowing the policy
space of LDCs, and thus it alters the nature of rights LDCs have under the
TRIPS Agreement. The US and EU demand, if agreed to, would actually amount
to an amendment to Article 66.1, but without following proper WTO
procedures as required by Article X of the WTO Agreement, the diplomat
added.

[The previous extension decision adopted in 2005, improvidently included a
³no-roll-back² clause which states: ³Least-developed country Members will
ensure that any changes in their laws, regulations and practice made
during the additional transitional period do not result in a lesser degree
of consistency with the provisions of the TRIPS Agreement.² In the TRIPS
Agreement such a clause is found in Article 65(5) and is only applicable
to developing countries and not to LDCs.]

According to sources, during the consultation it was highlighted that just
because the no-rollback clause illegitimately existed in the previous
decision, it does not bind LDCs in accepting this clause in the 2013
Decision, adding that in 2005 LDCs delegations expressed
displeasure at the inclusion of the clause.

LDCs, according to sources, also argued that historically (prior to the
TRIPS Agreement), flexibility in the implementation of IP laws had enabled
both developed and developing countries to achieve the optimal balance
between private rights and addressing pressing development needs (e.g.
access to knowledge, developing a technological base), but the
³no-roll-back provision² precludes LDCs from designing IP laws that are
optimal for addressing their needs and to take measures to address the
severe conditions prevailing in LDCs.

LDCs stressed that by avoiding the no-roll-back clause, LDCs were not
proclaiming that their IP laws will be scrapped, LDCs are simply trying to
maintain the policy space that have been granted by TRIPS Agreement,
sources say.

On the issue of duration, a trade diplomat informed Third World Network
that developed countries are arguing that a 5-year extension was justified
as every extension decision was reduced by 2.5 years  (e.g. the original
transition period was 10 years, followed by an extension decision in 2005
for 7.5).  The diplomat said that the argument was based on erroneous
facts, adding that in 2005, LDCs had initially proposed 30 years, and this
was reduced to 15 years in a spirit of compromise. Even this duration was
then sliced into half by the developed countries, with LDCs only being
offered 7.5 years. LDCs are opposed to short time-frames (e.g. the 5 year
proposed by developed countries), as the previous short-time frames have
clearly been insufficient to develop suitable conditions for TRIPS
implementation, the diplomat added.

During the consultations the developed country partners also queried as to
why LDCs ‘consciously’ chose not to include the needs assessment
provisions in the extension decision.

LDCs cited practical experience as well as that legally the issue of
extension was not linked to the issue of technical assistance for TRIPS
compliance, which was a matter under Article 67 of the TRIPS Agreement.

The demands of the US and EU not only violate the provisions of the TRIPS
Agreement but also conflict with the WTO ³Decision on Measures in Favor of
Least-Developed Countries² agreed at the conclusion of the Uruguay Round.
In this decision, all WTO members agreed that ³The rules set out in the
various agreements and instruments and the transitional provisions in the
Uruguay Round should be applied in a flexible and supportive manner for
the least-developed countries².+

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