At WTO, LDC Fight For Extension Of TRIPS Transition Continues

Over the past week or so, least-developed country (LDC) members of the World Trade Organization have held their own in a closed room with the world’s biggest economies as they worked out details of a request by the LDCs to extend the deadline by which they must enforce WTO intellectual property rules.

At issue is the built-in transition time for LDCs under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Currently, the transition is due to expire on 1 July 2013 (and 2016 for pharmaceutical products).

LDCs had previously extended the period in 2005, and most consider themselves to still not be ready. Therefore, they requested another extension, only this time they proposed that it be in place until a member is no longer classified as an LDC.

The issue was the subject of intensive consultations with the chair of the WTO Council on TRIPS, Panama Amb. Alfredo Suescum, over the past two weeks in a small room upstairs, which happens to be near the WTO IP Division. Consultations are expected to continue in the lead-up to the next meeting of the Council on TRIPs, on 11-12 June. Any decisions taken in the smaller consultations are subject to full consensus of the membership.

The going has been rough for the LDCs as their developing country colleagues were not allowed to participate, according to sources, and developed countries were not looking favourably upon details of the request. At one point in the week, an LDC negotiator leaving the room after hours of talks, said with weary pride that they had not given in yet.

TRIPS Art. 66.1 makes clear that LDCs will get an extension. It states: “In view of the special needs and requirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, such Members shall not be required to apply the provisions of this Agreement, other than Articles 3, 4 and 5, for a period of 10 years from the date of application as defined under paragraph 1 of Article 65. The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period.”

“Given the language of Article 66.1, we had thought it would be an easy decision based on the duly motivated request from LDCs. However, what we thought to be an easy process has not been so easy,” a representative of Nepal, speaking on behalf of LDCs, said in prepared remarks for a 22 May informal TRIPS Council meeting, open to any member.

It has been generally accepted for months that an extension would be agreed by all; it only remained to resolve details such as for how long. Developed countries have suggested 5 years, according to sources.

LDCs want it to apply for as long as a country remains an LDC, and they want it not to restrict them from making changes to previously adopted measures should they see fit. But developed countries, such as those of the European Union, feel that an expiration deadline would be more of an incentive for them to keep working toward TRIPS enforcement, and that there should not be any “rollback” permitted of existing measures, as was the case in the 2005 extension.

In its remarks to the 22 May meeting, Nepal said that the situation of LDCs has not changed significantly since the 2005 extension, particularly in meeting Art. 66.1. It said the requested extension is “reasonable, predictable and practical,” and that maximum flexibility is needed during the transition period. It also said a short-term timeframe would not help, as previous short-term deadlines have “clearly been insufficient to develop suitable conditions to benefit from IP systems.”

Nepal on behalf of the LDCs criticised the rollback proposal, saying that “even in 2005 almost all LDCs delegations who intervened expressed displeasure about the no roll back.” It added, “Negotiators of the TRIPS Agreement never intended for such a clause to be applicable to LDCs,” and if had it would have been mentioned expressly. It also said a rollback is “antithetical” to the spirit of Art. 66.1 as it would “narrow the policy space of LDCs.”

However, LDCs have suggested a compromise on rollback to include a clarification that “such a provision will not undermine the flexibility LDCs have been provided under TRIPS.” But this has been met with resistance, the delegate said.

At the 22 May informal TRIPS Council meeting, a squadron of larger developing countries showed support to the LDCs.

According to one source, Nepal for the LDC group, Morocco on behalf of the African Group, Saudi Arabia, Nigeria, China, Brazil, Bolivia, Mexico, India, Cuba and South Africa spoke in favour of the LDCs’ proposal.

India in prepared remarks at the 22 May consultation supported the LDC request, repeated its view from the March TRIPS Council meeting that “any artificial deadline would not help in creating a sound and viable technological base and that the decision to extend the transition period should not be circumscribed by any conditionalities like a ‘no roll back clause’ or TRIPS implementation.”

Developed countries, meanwhile, chose not to speak at the 22 May meeting, according to sources, except Norway, which suggested members show flexibility, the source said.

LDCs are given significant flexibility under TRIPS. South Africa, meanwhile, suggested that Australia’s tobacco plain packaging rule represents a roll-back, which led Australia to say no, it doesn’t, as they contend in the active WTO dispute case that the measure is in full compliant with TRIPS, the source said.

In a third area of discussion, it must be decided whether provisions for enhanced technical cooperation will be put in place again this time. This is a way of helping LDCs implement TRIPS, but it may not be continued this time.

In sum, Nepal on behalf of LDCs said, “Let us not send a message that it can be so difficult for WTO members to make a decision in favour of the most marginalized group of countries – a decision based on the precise language of Article 66.1.”

Groundswell of NGO Support

A large number of non-governmental groups from around the world rose in support of the LDCs in recent weeks.

A sharply worded letter was sent by two NGO groups on 20 May directly to TRIPS Council Chair Suescum, expressing “outrage” at the “manner in which informal consultations are being conducted on the issue.”

“We find the current process to be unfair and prejudicial to the interests of the LDCs, the poorest and most vulnerable segment of the international community.” They called it “outrageous” that, according to them, developing countries were prevented from participating in the consultations.

“Clearly the consultations have been designed so that the outcome will fail the LDCs,” the letter said. They also called it “unconscionable” that the chair was enabling the imposition of conditions on LDCs. The letter was signed by the “Our World Is Not For Sale” network and LDC Watch.

Also on 20 May, Electronic Information For Libraries (EIFL) sent a letter [pdf] of concern to Suescum.

A February letter [pdf] was signed by nearly 400 NGOs from every corner of the world, stating that Art. 66.1 “obliges the TRIPS Council to approve without conditions the duly motivated request submitted by the LDCs.”

“LDCs face ongoing resource and human constraints, widening technological gaps, and weak innovative capacities,” the letter said. “Overcoming these problems takes contextually specific strategies, policy flexibility, greater financial resources, but it also takes time – decades not years.”

“Failure by the TRIPS Council to grant LDCs an extension would be disastrous for LDC Members and their citizens,” particularly because they would be required to enforce all aspects of TRIPS immediately, especially painful before they have managed to grow their own local inventors, authors and creators to “leverage a domestic intellectual property system to their advantage.”

They went further to say that LDCs have been “misguided” into complying with the TRIPS agreement rather than taking steps in their best interest, which might include using flexibilities to TRIPS.