Influential EU Industry Group Urges Stronger IP Focus In Trade Relations

Greater emphasis should be placed on intellectual property issues in the European Union’s trade relations with developing countries, a leading employers group has recommended.

Almost 180 developing countries are eligible to export their goods to the EU at lower tariffs than apply to richer countries under the so-called Generalised System of Preferences (GSP). As these preferences will expire next year, the European Commission is assessing whether alterations to the entire scheme should be introduced before a new set of preferences comes into effect.

In a paper presented to the Commission this week, BusinessEurope, an alliance of corporations, has argued that a revised GSP should reflect the broader trade agenda which the EU is pursuing. That agenda was set out in the Commission’s 2006 policy document, titled Global Europe; it committed the EU to seeking that foreign countries introduce stringent standards on intellectual property as part of an effort to create more investment opportunities abroad for firms based in Europe.

BusinessEurope is now urging that countries participating in the GSP should have to comply with tougher IP rules in order to remain eligible for it.

Ileas Konteas, an advisor on IP issues to the lobby group, argued that it is appropriate to make demands of developing economies in this area as some of them have signed the World Trade Organisation’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.

Asked if corporations are seeking that the EU pursues an even more aggressive trade policy than it now does, he said: “I don’t think I would use the word ‘aggressive’. Some developing countries are already members of the TRIPS agreement. And being a member of TRIPS means you have obligations to raise protection standards [for intellectual property].”

According to BusinessEurope, IP issues should be brought within the scope of both GSP and a modified version of the scheme known as GSP Plus. Under GSP Plus countries identified as “vulnerable” can be granted additional reductions on trade tariffs than those applying to the basic GSP, provided they adhere to 27 international conventions. Sixteen countries, mostly in Latin America and Asia, are now covered by GSP Plus, although the European Commission announced in February that Sri Lanka could be suspended from the scheme later this year following a probe into its record on torture, child welfare and civil rights.

Karel de Gucht, the EU’s commissioner for trade, told a conference in Brussels on March 16 that while imports into the Union under the GSP system have been “steadily increasing” and were worth 68 billion euros in 2008, data assessing the effects of the global economic slowdown on such imports were not yet available.

De Gucht also queried whether it is correct to continue allowing countries that have registered robust economic growth to take part in the system. India, Brazil and Thailand are the three largest users of the system.

“The fundamental question for the review is whether the current GSP objectives remain valid and whether GSP preferences are still the best tool to approve them,” De Gucht said. “That implies asking the hard questions. Is it right that GSP continues to be available to traders who have in the meantime become major global players in international trade with very significant and wide-ranging exports to the EU?”

Marc Maes, a trade campaigner with the Belgian anti-poverty organisation 11.11.11, described BusinessEurope’s proposal of linking GSP Plus to IP protection as a “very strange idea”.

“Is BusinessEurope suggesting that countries who do not stick to the 27 conventions would get harsher IPR [intellectual property rights] limits slapped on them?” he asked. “GSP Plus is supposed to be an incentive, to offer something of value and to encourage countries to live up to certain standards. It is not a negative instrument.”

Barbara Specht from the group Women in Development Europe, who organised a protest against how EU trade policy is allegedly being driven by corporate profits this week, noted that developing countries have been resisting efforts to have tougher rules on IP enforcement introduced at WTO level. As a result, BusinessEurope’s staff are now looking at alternative ways of making developing countries comply with IP standards that have in the past only applied to more industrialised economies. “They are searching for any way to get what they want,” she said.