Bridges Trade BioRes • Volume 1 • Number 1 • 22nd November 2001
FAO International Undertaking Finally Adopted
FAO International Undertaking Finally Adopted
After seven years of difficult negotiations, the revised International Undertaking (IU) — now International Treaty (IT) — on Plant Genetic Resources for Food and Agriculture (PGRFA) was finally adopted by the Conference of the UN Food and Agriculture Organization (FAO) on 3 November, making it the first binding international instrument dealing specifically with the conservation and sustainable use of PGRFA. It remains to be seen, however, how the IT’s provisions will influence discussions at the WTO and which countries will actually ratify the Treaty.
Negotiations on the revision of the IU to harmonise it with the UN Convention on Biodiversity (CBD) have been underway since 1994. In its original form as a non-binding agreement, dating from 1983, the IU was based on the principle that PGRFA should be "preserved [...] and freely available for use, for the benefit of present and future generations" as part of the common "heritage of mankind." To date, 113 countries have adhered to the IU, the most notable exceptions being Brazil, Canada, China, Japan, Malaysia and the US.
Recognising both the sovereign rights and the inter-dependence of countries over their PGRFA, the IT establishes a Multilateral Sytem that aims to facilitate access and benefit-sharing (ABS). ABS is to be regulated principally by means of a standard material transfer agreement (MTA), which will apply also to transfers to third parties and to all subsequent transfers.
Agreement on IPRs despite US and Japan opposition
An Open-Ended Working Group met from 30 October to 1 November in Rome, Italy, alongside the FAO Council to finalise the issues that had remained unresolved at June’s Sixth Extraordinary Session of the Commission on PGRFA (see BRIDGES Weekly, 3 July 2001). One of the most contentious points on the agenda related to Article 12.3(d) of the text, ie whether "genetic parts and components" received from the Multilateral System (MS) should be patentable.
After long and heated debates, delegates decided to keep the original text — minus the brackets — which stipulates that "recipients shall not claim any intellectual property or other rights that limit the facilitated access to the plant genetic resources for food and agriculture, or their genetic parts and components, in the form received form the Multilateral System". Such an undertaking is to be provided in the standard MTA adopted to regulate the facilitated access. Both Japan and the US opposed this formulation and consequently abstained from the final vote on the adoption of the IU. The US in their statement during the Final Plenary noted that it would be unable to ratify the agreement due to the restrictions it places on innovations. Some observers have questioned the usefulness of the Agreement if the US — as one of the key countries involved in plant breeding and genetic engineering — is not bound to the Treaty’s provisions.
[What exactly is the issue here? In some legal jurisdictions, it is possible to patent DNA sequences and chemical substances that have been isolated from plant material without any structural modification. Therefore a patent holder could restrict - subject to possible research exemptions - use of the protected sequence or compound by others, and even access if the patent covered the method of isolation. To some developed countries, allowing such patents is necessary to encourage innovation and disclosure of the 'invention'. But to many developing countries (and even some developed countries), they legitimise misappropriation of resources to which they have sovereign rights, and are contrary to the spirit of an international agreement that emphasises exchange rather than appropriation.]
Canada, and Japan also expressed concerns regarding the consistency between the IT and existing intellectual property rights (IPR) regimes, such as the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPs) and in particular Article 27.3(b) which requires Members to grant patents on micro-organisms and non biological and microbiological processes, and to establish some kind of intellectual property protection for plant varieties. Some observers noted that the IT might provide an important precedent for the unresolved discussions on the review of Article 27.3(b) at the WTO.
Another IPR-related area concerns the IT provisions on benefit sharing which provide for monetary contributions derived from the commercialisation of products developed from PGRFA accessed under the MS. The payment is mandatory when the commercialisation of the product restricts the product’s availability for use in further research and breeding, and voluntary when the product is freely available for such purposes. While the IT does not explicitly discriminate between IPR holders - who are by definition conferred exclusive rights under TRIPs - and others, some observers speculate that it does so in practice due to the different rules for products available for further research and breeding and those that are not. Depending on how governments incorporate the IT ’s provisions into their IPR regulations, the possibility might arise that they could be challenged on the basis that in doing so, they contravene their TRIPs obligations under Articles 27.1 and 29 by imposing additional conditions for IPR protection.
Other resolved issues
Trade concerns were also raised in the context of Article 19.4(d) on financial resources for national activities for conserving and sustainably using PGRFA. In particular, delegates discussed a proposal by Australia to include a reference to avoiding subsidies in the text. Several countries opposed the reference, including Thailand which argued that subsidies should be discussed at the WTO. The EU pointed out that this language would introduce trade issues inconsistent with the rest of the text. In the final text, the Article simply states that the provision of financial resources should not be used to ends inconsistent with the treaty, in particular in areas related to international trade in commodities.
Delegates furthermore agreed on the text of Article 4, which deals with the IT’s relationship to other international agreements. The final text affirms the mutual supportiveness of relevant international treaties and the absence of hierarchies between them, thus leaving the relationship as ambiguous as in many other international negotiations, such as the Cartagena Protocol on Biosafety (see BRIDGES Weekly, 8 February 2000). Thus, which agreement would prevail in the case of a dispute remains unclear.
Regarding Annex I of the IT, which lists crops for inclusion in the MS, delegates retained the list of 35 crop genera and 29 forages already agreed to in June despite efforts by the EU to expand the list. Some observers pointed out the paradox that a small list, as proposed by many developing countries, would actually leave a large number of crops, which are not included in the MS, available for patenting. Others also questioned whether the list, be it short or long, could actually be itself be sufficient to ensure food security, considering that the agreement will not affect the international agricultural trading system with its distortions, subsidies and other barriers to market access for developing countries.
The IT is now open for signature and will enter into force 90 days after ratification by at least 40 signatories, provided that at least 20 of the 40 signatories are Members of the FAO.
Additional Resources
For further information on the IU’s trade implications, see BRIDGES Year 5, No. 6 (July-August 2001), p. 11. Documents of the meeting are available online. For daily coverage, see IISD Linkages.
ICTSD Internal Files; ENB, Vol. 9 No. 213, 5 November 2001.