Tuesday, May 28, 2013

International Development: TRIPS Hang Over LDC Like A Sword Of Damocles

TRIPS and international development
By Jaya Ramachandran | IDN-InDepth NewsAnalysis

BERLIN (IDN) - A modern-day Damocles' sword is hanging over 49 of the world's poorest and most vulnerable courtiers spanning across Asia-Pacific, Sub-Saharan Africa and the Caribbean. Unless the U.S. and the 27-nation European Union change their minds, the least developed countries (LDCs) will be forced to abide by the Trade-related Aspects of Intellectual Property Rights (TRIPS) – much to their detriment.

With this in view, LDC Watch non-governmental organisation have urged the EU Trade Policy Committee "to fully support approval of Haiti’s request" on behalf of the LDCs to the TRIPS Council – of the World Trade Organisation (WTO) – seeking an unconditional deferment of the implementation of TRIPS obligations until the countries of the group graduate from the LDC status. The existing transition period ends on 1 July 1, 2013.

In a letter to the Committee, LDC Watch international coordinator Arjun Karki points out that WTO TRIPS Agreement allows LDCs a renewable transition period in recognition of the special needs and requirements of LDCs and the need to create a sound and viable technological base and to overcome economic and financial constraints. And legally Article 66.1 of the WTO-TRIPS Agreement mandates all WTO members to approve the LDC request, once it has been submitted.

"The TRIPS Agreement, like all WTO agreements, is built on a foundation of 'special and differential treatment' for developing countries and, especially, for LDCs, in recognition of their vulnerability and constraints," says Karki, adding: At the conclusion of the Uruguay Round, in a Decision on Measures in favour of LDCs, WTO members agreed that the WTO rules “should be applied in a flexible and supportive manner for the least-developed countries”.

"It is apparent that the WTO legally obliges the TRIPS Council to grant the extension as requested by the LDCs or at the very least to formulate an extension on terms that are favorable and supportive of the needs of LDCs," argues Karki.

The LDC request has received massive support from all segments of society. At the March 5-6 TRIPS Council meeting in Geneva, developing countries strongly supported the request. Many civil society groups (representing millions), industry, academics, UN agencies have also firmly supported the approval of an unconditional extension of the transition period for as long as a country remains a LDC.

Despite the overwhelming support received, EU representatives in Geneva continue to be opposed to the extension request submitted by the LDC Group. Instead, the EU jointly with the U.S. are offering LDCs a poor and impractical deal of an incredibly short extension (for example, five years) that is subject to restrictive conditions. Particularly problematic, says Karki, is the “no-roll-back” clause that would force LDCs to maintain current levels of IPRs (intellectual property rights) protections, even if such protection is adverse to their circumstances and needs.

Important reasons

The LDC Watch pleads for an unconditional extension of the LDC’s transition period until they cease to be LDCs for the following reasons:

- LDCs are the poorest, most vulnerable and marginalized segment of the international community. The challenges, (some of which have been highlighted above) facing LDCs are colossal and formidable. They lack the capacities that are prerequisite to benefit from TRIPS standards of IPRs protection.

The requested transition period will enable LDCs to develop their IPR systems gradually in line with their economic and technological development and to address challenges such as bridging the knowledge and technology gap by facilitating access to affordable educational materials and technology. Further LDCs will be able to invest their scarce resources towards pressing development needs rather than on implementing TRIPS-compliant IPR systems, which are not only costly but may adversely impact development.

- LDCs are very much in need of quality, low-cost medical products and technologies in LDCs. However it is also well-known that such access may be affected by TRIPS rules, as such rules drive up their prices. The proposed LDC request is critical to facilitate access to affordable medical technologies required in LDCs.

- The time-frame proposed by LDCs i.e. that the transition period should apply until a country graduates from the LDC status is reasonable and practical since developing a viable technological base and overcoming constraints such as highlighted above takes decades. A shorter extension (e.g. 5 years or 10 years) is simply inadequate for LDCs.

- The condition of “no-roll-back clause” being imposed on LDCs is aimed at narrowing LDC’s policy space by cementing colonial era IPR rules and ill-advised IPR reforms. It directly conflicts the intent and spirit of Article 66.1 that LDCs should have maximum flexibility and policy space including the option of undoing existing IPR protections should such protection be adverse to its needs. Accordingly the “no-roll-back” condition is illegitimate under the TRIPS Agreement as it alters the nature of rights that LDCs are entitled to under the TRIPS Agreement during the transition period.

- Pursuant to Article 66.1 of the TRIPS Agreement, there is a legal obligation on all Members of the WTO to accord LDC members the requested extension, once a duly motivated request is submitted to the TRIPS Council by the LDCs.

This point of view is also backed by the Brussels-based Eurostep, a network of autonomous European non-governmental development organisations working towards peace, justice and equality in a world free of poverty. Its director Simon Stocker said: "I fully support the position being taken by LDC Watch, and would urge EU member states to accede to the LDC's position. Not to do so will only hurt the EU and further tarnish its image around the world."

Eurostep advocates changes in Europe's policies and practice based on the perspectives drawn from direct experiences of an active involvement of its members and their partners in development in over 100 countries across the world. LDC Watch is an important partner of Eurostep.


In fact the LDC Watch and the Our World Is Not For Sale (OWINFS) have charged the developed nations and incumbent chair of the TRIPS Council of “unjust and unethical treatment”. The large number of supporters of LDC demand have not been invited to participate in the ongoing consultations,” says a statement issued by the LDC Watch and the OWINFS. “Instead, the consultations have been limited to the LDC Group and developed countries like the US, the European Union, Japan, New Zealand, Canada, Australia, Switzerland, in particular, including the Council Chair.

“Alfredo Suescum, who is the current chair of the Council on TRIPS of the World Trade Organization (WTO), is, therefore, depriving LDCs of their allies, while attempting to overwhelm the negotiating capacity of the poorest members of the WTO by placing them in an unfair position where they have to face the united might of the developed countries.”

Adverse impact on EAC

According to Uganda's daily, the New Vision, The United States, European Union, and Australia are aggressively trying to pressure LDCs to keep in place the “no roll-back” provision that prevents LDCs from changing their existing laws, even if they were adopted from the colonial era or new laws that have proven bad for development.

The precarious events have put four of the five East African Community (EAC) partner states – Uganda, Tanzania, Burundi and Rwanda – classified as Least Developed Countries at a high risk of having access to medicine, food, and seeds, writes Patrick Jaramogi.

Under the TRIPS Agreement, the four EAC states apart from Kenya that is under the developing countries category are not obliged to implement the TRIPS agreement until July 2013 and until 2016 for the IPRs relating to pharmaceutical.

The agreement gives them rights to seek further extension of these transitions deadlines, restrict IPR protection and under certain circumstances issue licenses for import or production of an IPR protected commodity without authority from the Intellectual Property Rights Holder.

Civil society organisations (CSOs) contend that for these reasons, technologically advanced countries such as the U.S., EU, and others consider TRIPS agreement too weak to serve their interests,” Primah Kwagala and Intellectual Property Lawyer with Center for Health Human Rights and Development (CEHURD) told the New Vision.

LDC criteria

A country is classified as a LDC on the basis of three criteria – low income, human assets weakness, economic vulnerability – applied by the Committee for Development Policy (CDP), a subsidiary body of the UN Economic and Social Council (ECOSOC).

This Committee also recommends graduation of a country from its LDC status. In any case, generally on most aspects the conditions prevailing in LDCs are terribly poor.

For example, more than half of the population lives on less than $1.25 (PPP) per day; adult literacy rate in LDCs is on average at 60.7%, with gross enrolment in tertiary education at about 6.6% while primary school dropout rate at 40.9 % of the population; only 1.7 per 100 people have personal computers, while about 5 out of 100 have access to the worldwide network; more than half of the LDC population do not have access to electricity, water or sanitation facilities.

The productive capacities in LDCs are also extremely limited and they tend to be at the bottom of all innovation/technology indices. [IDN-InDepthNews – May 25, 2013]

2013 IDN-InDepthNews | Analysis That Matters