PHM-Exch> South Centre Welcomes WTO’s LDC/TRIPS Decision

[Claudio Schuftan]

From: South Centre <south at southcentre.org>

South Centre Welcomes WTO Decision on LDCs and TRIPs

*South Centre welcomes further extension of LDCs’ transition period in
implementing TRIPS Agreement.*


The South Centre welcomes the decision of the TRIPS Council of WTO on 11
June 2013 to allow Least Developed Countries to delay implementation of the
TRIPS Agreement until 1 July 2021. At the end of this period, LDCs can
request further extension.

The TRIPS Agreement (Art. 66.1) states that in view of the special needs
and requirements of LDCs, their economic, financial and administrative
constraints, and their need for flexibility to create a viable
technological base, LDCs shall not be required to apply the provisions of
the agreement, for a period that can be extended by the TRIPS Council, upon
duly motivated request by an LDC.

The terms of the 11 June 2013 decision this time are better than the terms
in the previous extension, granted in 2005.  This is mainly due to the
determination and skill of the LDC Group, led by Nepal, during the long
negotiations lasting for months, which the LDC Group engaged in with the
major developed country members of the WTO.  Developing countries were
fully supportive of the LDC Group request, as were many civil society
groups around the world.  However, the LDC Group’s request was
unfortunately not acceptable to many of the developed country members of
the WTO.

The new extension period is for eight years, starting on 1 July 2013.  This
is longer than the seven and a half years transition period provided in the
2005 decision.  It is thus an improvement, though very slight.  It is also
significantly below what the LDC Group had asked for in its formal proposal
IP/C/W/583, in which the Group had requested that the transition period
should last so long as the country remains an LDC.   This request was
justified, especially since the relevant part of the TRIPS Agreement
(Article 66.1) states that the TRIPS Council *shall *grant LDCs further
extension of the transition period, upon due request. In the view of the
South Centre, LDCs have a low level of economic and social development and
thus require time to develop a viable technological base and to experiment
with domestic IP legislation before being obliged to implement the TRIPS
Agreement.  The economic condition of LDCs as a group has not improved in
the past several years, especially because of the global financial crisis
of 2007-09 and the global economic slowdown.

The 11 June 2013 decision has also removed the condition introduced in the
earlier 2005 decision that LDCs cannot roll-back the level of
implementation of the TRIPS agreement that they have already undertaken in
their national legislation. Under this condition, an LDC would not be able
to experiment with IP-legal reforms that are suitable to their development
context. For example, if a LDC introduces a TRIPS-compliant obligation on
IP-protection, it would no longer be able to reduce that scope of
protection, regardless of the fact that the LDC is not required to
implement the TRIPS Agreement.  This binding condition actually denied the
policy space given to LDCs in the TRIPS Agreement to refrain from
implementing the Agreement during the transition period.

This time, the LDC Group rightly insisted that any reference to a “no
roll-back” binding commitment could not be included in the new decision.
The LDC Group position was fully justified.  However, some developed
country members insisted on retaining the no roll-back commitment.  As a
compromise to the requests of developed countries*, *the new decision
contains a sentence equivalent to a “best endeavour”, i.e. that LDCs
express their determination to preserve and continue the progress towards
implementation of the TRIPS Agreement". This is not a binding commitment on
LDCs and in no way can this be understood, in accordance with the
interpretation principles applied in WTO, as preventing LDCs from rolling
back IP legislation as required to meet their particular needs.

This gain in policy space is reinforced by the sentence immediately
following, that   “Nothing in this decision shall prevent least developed
country Members from making full use of the flexibilities provided by the
Agreement to address their needs....” In our view, this includes the
flexibilities contained in Article 66.1 of the TRIPS Agreement (to not
apply provisions of the TRIPS Agreement, other than Articles 3, 4 and 5),
which has now been extended.

We also welcome paragraph 3 of the Decision, that LDCs have the right to
seek further extensions of the transition period.  This reaffirms the
clause in Article 66.1 that the Council shall grant further extensions of
the transition period upon due request by LDCs.

The 11 June 2013 decision provides assurance that LDCs retain their policy
space and continue to have the full flexibilities intended by Article 66.1
to overcome their capacity constraints and develop a sound and viable
technological base.

The best outcome would have been that the LDC Group’s request had been
fully agreed to by the TRIPS Council. Nonetheless, given the circumstances,
the 11 June 2013 decision to extend the transition period is to be welcomed
as it is a gain for the LDCs.

The 11 June 2013 decision also states that this decision is without
prejudice to the Council’s previous 27 June 2002 decision on "Extension of
the Transition Period under Article 66.1 of the TRIPS Agreement for LDC
Members for Certain Obligations with respect to Pharmaceutical Products"
(IP/C/25). By way of the 2002 decision, LDCs are not required to provide
protection to patents or test data in relation to pharmaceutical products,
until 1 January 2016.  Thus, LDCs should continue to make use of the policy
space provided by the 2002 Decision.

LDCs should now receive full support from UN agencies, the WTO, WHO and
WIPO, in the spirit of the Development Agenda, to make effective use of the
transition period to build their technological base through technology
transfer and capacity building, whilst making full use of the flexibilities
afforded to the LDCs, including the further extension provided by the TRIPS
Council on 11 June 2013.

Before the expiry of the transition periods, LDCs should again assess their
situation and may request extension in 2016, with respect to pharmaceutical
products, and in 2021 in respect to all provisions of the TRIPS Agreement.

-------------------------------

This Statement by the South Centre is jointly authored by Martin Khor
(Executive Director), Carlos Correa (Special Advisor, Trade and
Intellectual Property Issues), German Velasquez (Special Advisor, Health
and Development), Viviana Munoz Tellez (Manager, Innovation and Access to
Knowledge Programme) and Nirmalya Syam (Programme Officer, IAKP).
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