Bridges Weekly Trade News DigestVolume 17Number 21 • 13th June 2013

Poorest WTO Countries Granted New TRIPS Extension


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WTO members have agreed to extend the transition period for least developed countries (LDCs) to implement the organisation’s rules on intellectual property rights until July 2021, which was previously due to end next month. The news, announced on Tuesday, follows intensive discussions that kicked off earlier this year.

The decision comes as WTO members continue to work feverishly toward concluding a set of deliverables in time for their upcoming ministerial conference at year’s end in Bali, Indonesia. While many have warned in recent months that preparations for Bali are not moving at the necessary pace, the success of this extension effort has been welcomed by some as a sign that members can still negotiate constructively.

“The agreement reached by members makes very clear that we can come together and get things done,” said WTO Director-General Pascal Lamy in response to the news. “This is the spirit that we need to see in full display over the coming months in order to produce a meaningful outcome at the Bali Ministerial Conference in December.”

Previous extensions

When the WTO was established in 1995, the organisation’s poorest members were initially given until 1 January 2006 to implement the obligations contained in the WTO’s Trade-Related Aspects of Intellectual Property (TRIPS) Agreement.

In 2002, the LDC transition period was extended until January 2016 for pharmaceutical patents, with a later 2005 decision extending the period for all intellectual property rights until July 2013.

In light of the impending July 2013 deadline, Haiti submitted a request last November on behalf of the LDC Group to extend the transition period further - specifically, until a given member graduates from being a least developed country.

“The situation of LDCs has not changed significantly since the last extension decision in 2005… [and they] have not been able to develop their productive capacities and have not beneficially integrated with the world economy,” the proposal explained.

While members had generally agreed on the principle of granting LDCs additional time, they spent the last several months negotiating the actual terms of the extension. Developed countries had argued that the proposal submitted by Haiti amounted in reality to an indefinite extension, which could have implied that intellectual property is not a relevant issue for LDCs.

Sources familiar with the discussions say that members broadly welcomed Tuesday’s decision, though some - such as India - still said that the original request for extending the deadline until an LDC is no longer “least developed” should have been accepted. Others, meanwhile, urged that this spirit of compromise be carried over to other discussions at the global trade body.

Least developed countries, for their part, praised the overall result, noting that it would give them “greater incentives and capacity” for participating in TRIPS provisions as LDCs take on a larger role in global trade.

LDCs will be able to seek further extensions after the 2021 deadline. The decision does not affect the current terms for pharmaceuticals, with that deadline remaining at 2016.

“Non-rollback” clause excluded

One of the main issues that had divided members in their recent consultations was whether to include the current “non-rollback” clause under the terms of the new extension. During the latest transition period, this provision had required LDCs to ensure that changes they made in their laws or regulations do not lead to a lesser degree of consistency with the TRIPS Agreement. The controversial measure was ultimately omitted from Tuesday’s final text.

LDCs have argued that the “non-rollback” clause is an undue restriction of their policy space and contrary to the letter and spirit of the extension, as stipulated in the TRIPS Agreement. Under the new wording, LDC members have expressed “their determination to preserve and continue the progress towards implementation of the TRIPS Agreement.”

However, the decision notes that nothing in the new extension should prevent LDCs from using the flexibilities inherent in TRIPS to address their needs, such as developing a technological base and overcoming capacity constraints.

Reactions

The prospect of extending the LDC transition period has been backed in recent months by a range of stakeholders, among them scholars, intergovernmental institutions, government representatives, and civil society organisations.

However, the terms of the actual decision - particularly the agreement to extend the period by only eight years, rather than indefinitely - were criticised by some, with Aziz ur Rehman, an intellectual property advisor for Médecins Sans Frontières’ Access Campaign, calling it “a half-hearted compromise.”

Developed countries should instead have permitted a “longer and more complete” extension, he explained, while urging LDCs to take advantage of the opportunity afforded by the exclusion of the “no rollback” clause.

Others warned that giving LDCs less than a decade of additional time would limit their opportunities to test out which domestic intellectual property laws might be in their best interests. “The opportunity to experiment will be burdened with uncertainty about the longer term future,” Knowledge Ecology International, a Geneva-based NGO, said.

ICTSD reporting.

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