LDCs get eight more years of exemption from WTO - TRIPS rules

Original Publication Date: 
11 June, 2013

For Immediate Release June 11, 2013

Contact: Deborah James - djames(at)cepr(dot)net

Statement of Our World Is Not for Sale (OWINFS) network

Least Developed Countries (LDCs) Get 8 Years Extension of Trade-Related Intellectual Property Rules (TRIPS) Exemption, Developed Countries Snub WTO rules on Extension

Today the WTO-TRIPS Council adopted a decision granting LDCs an eight-year extension of the transition period, (deferring the time within which LDCs to implement the TRIPS Agreement), without the pernicious mandatory “no roll-back” clause (contained in the previous extension decision) which developed countries pushed hard to include.

The decision is an improvement over the previous extension decision and retains policy space for LDCs to address their technological and other development needs. However the decision does not go far enough to deliver LDCs’ original demands of (unconditional extension for as long as a country remains a LDC) due to the outrageous negotiating tactics of the developed countries particularly the US and the EU and their blatant disregard of Article 66.1 of the TRIPS Agreement which legally obliges all WTO members to grant LDCs the requested extension.

OWINFS congratulates the LDCs on their perseverance to obtain an better outcome than the previous extension decision and condemns the unconsionable anti-development stance of developed countries particularly the US and EU throughout the negotiation process, to undermine the valid legal rights of the poorest nations.

LDCs are the most vulnerable segment of the international community with more than half of the population living on less than $1.25 (PPP) per day; adult literacy rate on average at 60.7%, with gross enrolment in tertiary education under 7%; less than two people per 100 have personal computers, while about five out of 100 have access to the worldwide network. The productive capacities are extremely limited. Obviously LDCs do not have the basic prerequisites to benefit from TRIPS rules. And in recognition of the adverse developmental impact of the TRIPS Agreement particularly on developing a viable technological base, Article 66.1 of the TRIPS Agreement allows LDCs a renewable exemption from TRIPS rules, which “shall” be granted by the TRIPS Council on receiving a “duly motivated request” by LDCs.

In view of the dire conditions prevailing in their countries, on 5 November 2012, Haiti on behalf of the LDC Group submitted a duly motivated request to the WTO-TRIPS Council for an unconditional extension of the transition period, until a Member ceases to be a LDC (IP/C/W/583). The existing transition period granted in 2005 expires at the end of this month.

The LDC request received widespread support from developing countries,[1] civil society[2], industry[3], academics[4], UN agencies[5], Members of the US Congress[6], EU parliamentarians[7].

Incredibly instead of according LDCs’ their duly motivated request as required by Article 66.1, it was opposed by developed countries (US, EU, Canada, Australia, Switzerland, New Zealand, and Japan). The continued opposition led to intensive closed-door, non-transparent negotiations in Geneva between rich and powerful countries that opposed the LDCs’ original request and LDCs - the poorest and most vulnerable nations.

On duration, developed countries demanded a short time-frame, with the US proposing as low as 5 years. As a result the final agreed outcome was only 8 years. This duration is of significance in that it increased (and did not decrease) the duration of the transition period. The previous extension decision was for 7.5 years. However the 8 year duration remains insufficient considering the formidable challenges facing LDCs. The decision does however acknowledge the right of LDCs to seek further extensions.

During the negotiations, immense pressure was put by developed countries (particularly the US and the EU) on LDCs to accept the inclusion of an obligatory “no roll-back” clause, contained in paragraph 5 of the previous extension decision (IP/C/40). Such a clause is TRIPS-plus, and prevents LDCs from undoing existing IP protections (which may be the result of colonial-era IP laws or ill-advised IP reforms), even if adverse to their development needs.

Fortunately, due to the resistance of LDCs, the final decision accepted at the TRIPS Council, does not include the obligatory no-rollback. It only makes a reference to para 5 of IP/C/40, with LDC members expressing their “determination to preserve and continue the progress towards implementation of the TRIPS Agreement.” Further it clarifies that “[n]othing 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
" which in this case would include the flexibility under Article 66.1 to rollback existing levels of TRIPS compliance. Thus, the new extension decision retains LDCs’ policy space to undo existing IP protections.

OWINFS remains concerned with the non-transparent negotiation process facilitated by the Chair of the TRIPS Council, Ambassador Suescum of Panama, often in a way that was prejudicial to the LDCs. For e.g. he allowed non-WTO-compliant negotiations only to accomodate developed countries’ demands, (detailed above), and excluded allies of LDCs’ from the negotiations. On May 20, OWINFS & LDC Watch as well as other NGOs sent a letter criticizing the negotiation process. This led to the Chair occasionally convening informal briefings for other WTO members, although negotiations continued in a non-transparent manner between developed countries and the LDCs.

OWINFS reiterates our commitment to transforming the global trade system into one that benefits people, particularly the poorest, and preserves the environment. OWINFS members participated actively, along with the Third World Network, LDC Watch, and other NGOs in advocating for the original LDC proposal. Many of the 376 civil society organizations (representing millions of people) that were signatories to a civil society letter of 21 February letter[8], demanding that WTO members immediately grant the extension as requested by the LDCs, without conditionalities, are members of OWINFS.

Finally OWINFS encourages LDCs to maximise use of this hard-won transition period by initiating reforms to facilitate access to affordable essential goods (e.g. technologies, educational materials etc.) for development. LDCs must stop buying into the propaganda of IP maximalists (e.g. WIPO) that IP works for development, when in fact theoretical and empirical evidence suggests otherwise.

End Notes:

[1] See http://www.twnside.org.sg/title2/intellectual_property/info.service/2013... and here.

[2] See Civil Society Letter at http://www.ip-watch.org/weblog/wp-content/uploads/2013/02/CSO-Letter-Sup... and See Statement of Electronic Information for Libraries (EIFL) at http://www.eifl.net/eifl-statement-support-lcd-trips-waiver.

[3] See statement by Computer & Communications Industry Association (CCIA) at http://www.ccianet.org/?sid=5&artid=363&evtflg=False

[4] See Global Academics Letter to WTO Members on TRIPS Extension at http://infojustice.org/archives/29370

[5] See http://www.unaids.org/en/resources/presscentre/pressreleaseandstatementa... and http://www.unaids.org/en/media/unaids/contentassets/documents/unaidspubl...

[6] See http://www.scribd.com/doc/141688395/LDC-IPR-Waiver-Letter-to-USTR-5-14-13

[7] See http://www.scribd.com/doc/142741593/LDC-Letter-to-Commissioner-de-Gucht-...

[8] See Civil Society Letter at http://www.ip-watch.org/weblog/wp-content/uploads/2013/02/CSO-Letter-Sup... and See Statement of Electronic Information for Libraries (EIFL) at http://www.eifl.net/eifl-statement-support-lcd-trips-waiver.