In this context, the Policy Brief, Negotiation Trade, Innovation and Intellectual Property: Lessons from the CARIFORUM EPA Experience from a Negotiator’s Perspective, by Malcolm Spence - Senior Coordinator, Caribbean Regional Negotiating Machinery- provides a background on the negotiations between CARIFORUM States and the European Commission (EC) on innovation and intellectual property rights (IPRs) in the framework of their recently concluded Economic Partnership Agreement (EPA). It analyses the main provisions reached and points to some lessons learned which could be of relevance for other sub-regions negotiating an EPA with the European Union (EU).

In particular, the inclusion of a specific section on “Innovation” within a chapter on “Innovation and Intellectual Property” is a distinctive feature of the agreement sought by CARIFORUM, which it believes represents “a small but important step in changing the paradigm in which the subject of IP is dealt with in trade negotiations.”

The author shows how the EPA negotiations provided an opportunity for CARIFORUM States to encourage partnerships with the European Union (EU) that could give momentum to the development of national and regional innovation systems.

In the section on IPRs, references are made to the development priorities of CARIFORUM States and their levels of development, reflecting the need for achieving an appropriate balance between the scope of IP protection and the level of development of the region.

This Policy Brief was commissioned under the UNCTAD - ICTSD Programme on IPRs and Sustainable Development. It is also available at http://www.iprsonline.org/

Climate change policies aimed at controlling emissions of greenhouse gases (GHG) are leading to realignment in the production and consumption of goods and services around the world. As Annex I Parties to the Kyoto Protocol are taking up various measures ranging from energy-efficiency standards, carbon cap-and-trade programmes and carbon taxes, concerns have been raised that industries in these countries will find themselves at a disadvantageous position vis-à-vis countries where such mandatory measures may not be implemented. There is growing fear that this may lead to “carbon leakage” and industrial relocation from OECD to non-OECD countries, especially for energy-intensive industries, such as steel, cement and chemicals targeted by climate policies. As a major emerging economy not bound by mandatory GHG reduction obligations, China is at the centre of some of these concerns.

In the context of international trade, some countries are worried that by implementing stringent climate change policies they will have to compete with exports from countries where costs of production may be lowered as a result of the absence of mandatory emissions reduction obligations on producers. These concerns have prompted calls within industry as well as by politicians for the introduction of measures, including trade measures, to offset competitive imbalances and level the playing field vis-à-vis “climate free riders”. Rhetoric over the use of border tax adjustments and measures with similar effects has particularly been prominent in this regard.

China is poised to weigh heavily on the process and outcome of these debates through its domestic policies and modalities of its participation in the crafting of multilateral regulatory frameworks. In that context, a number of opportunities and challenges for sustainable development arise for China and the international community at large.

This collection of papers is meant to bring together views and perspectives from a wide range of experts and analysts both within China and internationally to contribute to the debate on issues in the trade– climate change relationship that may impact on global competitiveness, with a particular focus on the role of China. Chapter 1 provides an overview of issues in the WTO-Kyoto Protocol relationship that pertain to competitiveness. It situates the debate on the impact of climate change measures undertaken by Annex I countries on competitiveness, discusses approaches being considered in response to such competitiveness concerns and highlights some of the key questions of particular concern to China.

The second chapter presents current policies related to climate change in China and examines key elements of the recently adopted National Climate Change Programme, including challenges that China is likely to face in its implementation. The paper also discusses most likely scenarios regarding China’s role in a future climate change regime (post-Kyoto) and the implications for global efforts to tackle climate change.

Chapter 3 provides an analysis of the effects of climate change measures adopted in OECD countries on international trade and competitiveness. The chapter presents initial empirical evidence obtained on the impact of carbon taxes and energy efficiency standards on international trade flows and competitiveness. It addresses the question of whether or not “carbon leakage” is occurring and whether China is benefiting from industrial relocation from OECD countries in energy-intensive industries. The chapter finally examines to what extent climate change policies are driving positive developments in global competitiveness.

Concerns over competitiveness were invoked by the US to justify its non-ratification of the Kyoto Protocol. Such concerns have recently been common in many Kyoto Protocol Annex I countries. This has led to a debate over the need for measures such as border tax adjustments to enable industry in countries subjected to mandatory emissions reduction obligations to insure that conditions are equal vis-à-vis countries that have not accepted similar obligations. In that context, Chapter 4 discusses initiatives being considered in the EU and the US, which may have important implications for China.

As its exports to OECD countries expand, China is bound to comply with increasingly stringent energy efficiency and other climate related standards. Moreover, Chinese exports of certain products such as energy efficient light bulbs have been subjected to anti-dumping measures in the EU. Chapter 5 examines the impact of these measures on China’s exports of electric and electronic goods and discusses how industry within China is responding to trade and climate-related policy measures. Finally, the chapter discusses how these measures may be acting as drivers for improvement in resource and energy efficiency and competitiveness in China.

Technological development is a central aspect of climate change mitigation. Access to advanced technologies, including transfer of technology, will enable developing countries to enhance their capacity to reduce their emissions of greenhouse gases and “leap-frog” in their process of development. Chapter 6 examines the question of whether or not there will be barriers related to intellectual property for developing countries to access clean energy technologies. It does so by analysing the industry structure and intellectual property implications in three clean energy sectors –
solar photovoltaic, biofuels and wind energy technologies.

This paper is part of ICTSD’s Trade and Sustainable Energy series, published under its programme on Trade, Climate Change and Sustainable Energy. The programme aims to generate policy-oriented and solutions-focused knowledge on key issues at the interface between the multilateral trading system and various regimes and initiatives promoting the transition to a sustainable energy future.

Dryland regions are among the world’s most vulnerable ecosystems. This vulnerability is further exacerbated by human activities such as unsustainable land use. Land degradation takes many forms, including depletion of soil nutrients, salinisation, agrochemical pollution, soil erosion, plant degradation (resulting mainly from inappropriate agricultural practices), overgrazing and deforestation. All of these types of degradation cause declines in the productive capacity of the land, eventually reducing yields. Land degradation is perhaps the most threatening ecosystem change directly affecting the livelihoods of people living in arid areas. The degradation of ecosystem services in drylands could threaten future improvements in human well-being and even reverse gains in some regions.

Drylands provide critical ecosystem services on which humanity relies for food, shelter and livelihoods. They offer a variety of land use options from hunting and gathering to pastoralism, from ranching to farming and from cultivation to the provision of dryland ecosystem services including tourism. Many of our major food crops, such as wheat, barley, sorghum, millet and cotton as well as animal species such as horses, sheep, goats, cows, camels and lamas originated in drylands. Medicinal plants in these regions also supply essential products for our health. One third of plant-based drugs in the United States are derived from dryland biodiversity.

Despite this potential, international trade has not been able to fully support social and economic development, increase income generation or significantly improve livelihoods in drylands. Major dryland commodities such as cotton face a number of distortions in international markets arising from tariffs, subsidies and other trade barriers, while niche products such as medicinal plants, face nontariff barriers. Moreover, dryland developing countries generally lack supply-side capacities including investment, marketing and market access tools to be able to derive meaningful benefits from trade. While trade flows at the national, regional and international levels can act as incentives to foster economic growth and sustainable land management, they can also lead to changes in land ownership and use with systemic results on both the fertility of land and the populations who live on it. International trade regimes and related government policies, macroeconomic reforms and a focus on raising agricultural production for exports can affect, directly or indirectly, the resilience of dryland ecosystems.

These factors can lead to inefficient and wasteful use of land and water resources, inappropriate crop intensification – especially under monocropping systems – expansion of agriculture to marginal lands and the use of farm machinery and agronomic practices that are not suitable for local soil and water conditions.

While a range of agricultural crops are grown under intensive production systems, countries could explore opportunities for diversifying trade into products which may allow them to promote a more sustainable use of natural resources, as well as looking at ways to improve the environmental and social impacts of those products which are currently traded in large quantities.

Emerging markets for natural products, such as aloe or gum arabic are creating many new opportunities. However, gains from these opportunities still remain very limited because of the lack of basic infrastructure, investment capital, research and development and an adequate policy framework that regulates these markets at national, regional and international levels. Building an enabling environment that would allow these markets to grow, would create incentives for increasing investment in the sustainable use and management of land and natural resources, including by the private sector and local communities.

Reforming the current distortions in global agricultural trade, especially those related to agricultural subsidies, is crucial to address problems in the relationship between land degradation and trade. Certain types of agricultural subsidies, for example those directly linked to production, are believed to have a harmful impact on sustainable development – including on sustainable land use. Tariff escalation is also known to prevent the development of industries focusing on processed products which are often less land-intensive than agriculture.

The international trade regime offers a number of opportunities that could contribute positively to sustainable land management. In particular, the process of trade liberalisation and trade rule-making under the World Trade Organization (WTO) including in the areas of special products, environmental goods and services (EGS), full duty-free and quota-free market access for least-developed countries (LDCs) and the reform of production and trade distorting subsidies, could provide opportunities for promoting investment in sustainable land management.

This publication aims to provide a wide range of perspectives from various stakeholders on how trade policies and processes could contribute to advancing the objectives of sustainable land management and sustainable development in dryland regions of the world. It is also meant to provide an intellectual input into the ongoing process towards the ten-year strategic plan and framework to enhance the implementation of the United Nations Convention to Combat Desertification (2008-2018). We hope that readers will find these papers stimulating reading and that they will inspire further reflection and debate.

Chinese Version