A European Parliament majority this week approved a free trade agreement with Korea with strong provisions on intellectual property rights protection, according to Robert Stury, rapporteur of the lead EP Committee on the dossier.

The FTA, linked here, and welcomed by the conservative, socialist and liberal parties, carries expectations of creating new trade in goods and services worth €19.1 billion for the EU and save EU exporters €1.6 billion a year. It is the first of a series of FTAs passed under the Lisbon Treaty with additional scrutiny from the EU Parliament.

Yet according to the Green Party, the Parliament failed in giving the FTA a broader check also with regard to broader social and environmental aspects. The Green Party and the European United Left/Nordic Green Left Party Group voted against the FTA. But the FTA will now come into effect on 1 July.

The Parliament rapporteur for the extensive dossier, Robert Sturdy (EPP), when pointing to the benefits for EU industry through the reduction of up to 98 percent of existing tariffs, also underlined the “strong IP protection” alongside with “a chapter on sustainability” of the FTA. On IP protection, the FTA contains the extension of patent rights for pharmaceuticals and data exclusivity, both provisions ardently fought over in the ongoing EU-India FTA negotiations.

The extension of patent rights for up to five years shall make up for time lost during the application phase. The data exclusivity provision prevents generic drug manufacturers from relying on data used by the patentee for market authorisation. Clinical test data generated by the patent holder, for example, therefore cannot be used for market authorisation of a generic drug using the same substance, obliging the generic drug users to reiterate the tests.

Green Party Member Yannick Jadot issued a release criticising the agreement, because of its intervention with the Korean carbon dioxide emission policy.

“Among the more odious provisions of the agreement, the EU succeeded in pushing Korea to massage its rules on car CO2 emissions to allow European carmakers to export more big gas-guzzling cars to Korea,” he said. “This arm-twisting by the EU, which has undermined the environmental integrity of Korea’s car emissions rules, is nothing short of scandalous. Worse, the EU is trying to spin this environmental loophole as allowing Europe’s car industry laggards to ‘compete fairly’ in the Korean market with smaller, cleaner and more efficient Korean cars.”

EU Commissioner Karel de Gucht on the other hand welcomed the CO2 compromise, as it will address some of the concerns of European carmakers. De Gucht also hastened to underline that the US-Korea FTA (Korus) signed recently would not lead to any disadvantages for the EU.

The Green Party also pointed to possible backdoor legislation on internet freedom because of excessive criminal liability provisions for online intellectual property infringements contained in the IP chapter. Green party member Jan Philipp Albrecht talking to Intellectual Property Watch said : “We can draw parallels to the debate about the Anti-Counterfeiting Trade Agreement.”

For ACTA, too, the criminal law parts are heavily under discussion with regard to their compatibility with the EU acquis, the existing EU law. A criminal law sanctions directive against IP infringements has failed in the EU, making criminal law IP enforcement a matter of EU member states. For example, the FTA also contains the crime of “aiding and abetting” copyright and trademark infringement on a commercial scale.

Reaching IP Protection Levels ACTA Couldn’t

The rapporteur for the Industry Committee of the Parliament, Daniel Caspary, told Intellectual Property Watch: “The FTA provisions are all in line with the EU acquis communautaire, according to the Commission. I welcome implementation of the acquis and certainly this is easier in a bilateral agreement than in a plurilateral negotiation like ACTA.” That some provisions that were part of the acquis were not implemented in ACTA, “does not mean that we are against these provisions in the acquis,” Caspary said.

Caspary’s point with regard to broader possible results in bilateral negotiations proves to be true in the IP chapter of the FTA. The EU-Korea FTA reaches the level of IP protection standards that ACTA was intended to reach: the scope of the IP chapter is far broader, including not only copyright, related rights and trademarks, but also designs, services marks, layout designs of integrated circuits (in chip production), geographical indications, plant varieties and the “protection of undisclosed information”.

A special section covers broadcasters’ right to prohibit re-broadcasting, fixation, and communication to the public of their TV broadcasts for a fee. Also included are stronger border measures, including searches and seizures upon request of rights holders.

The FTA also is similar to ACTA in another aspect, said Albrecht. Information about the provisions of the agreement was kept secret before the agreement was signed by the parties last year. While the committee in charge of the dossier, the Committee on International Trade, gets access in a private reading room, there is a clear gag order for them to speak about the issues. With a document as long and complex as the FTA this leaves not much chance for input by Parliament, not to speak of public scrutiny.

Concerns especially of the European car industry were well fought for by the Parliament, though. Parliament brought in since the time of the signature a so-called safeguard clause that will try to remedy situations in which EU companies lose due to the effects of the FTA. Dutch independent MEP Laurence Sassen criticised the safeguard clause as “protectionist reflex” in the face of free trade.

“Uncompetitive companies will be protected when they do not act competitively,” she said, “and EU citizens will pay the bill for this.” Some MEPs also tried to point that there certainly would be losers of the FTA.

How much the FTA will be a blueprint for other FTA negotiations – EU-India, EU-Canada and EU-Mercosur – remains to be seen. Trade Commissioner De Gucht said the EU still does “favour the multilateral process.” He initiated talks between seven countries in Davos in January and hopes for a breakthrough at the WTO in summer.

“But bilateral and multilateral negotiations are no enemies.” he said. “The opposite may hold true. Liberalisation fuels liberalisation.” The slow pace of multilateral negotiations was the motivation for the EU-Korea FTA, too.