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[e-drug] A historical note on inclusion of TRIPs into the GATT/WTO

E-DRUG: A historical note on inclusion of TRIPs into the GATT/WTO
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submitted by Riaz Tayob 
SEATINI
South Africa
Riaz K Tayob <riaz.

*Nov 28, 1988*

*FREEDOM FOR TRADERS, PROTECTION FOR MANUFACTURERS.*

By Surendra J. Patel

GENEVA, NOVEMBER 25 (IFDA)--- The Uruguay round of negotiations on 
Trade-Related aspects of Intellectual Property Rights has been going on 
since 1987 in GATT. The acronym for them, appropriately but perhaps 
unwittingly, is TRIPS ... 

Why are these negotiations taking place in 
GATT, which had previously played only a peripheral role in this area? 
Why abandon other, more universal, more relevant and more competent 
fora, such as the United Nations, UNCTAD, and WIPO, where these issues 
have been under far-reaching negotiations for the last 25 years? Why are 
developed countries now so strikingly silent about all the commitments 
they solemnly made during negotiations in the above fora? Why have 
developed countries made such a complete turn-around in their 
submissions in GATT? Why this great reversal ...? 

The answers to these questions affect the very strategic bases of the future 
development of 
the third world countries... The mandate for the GATT negotiations on 
TRIPS were carefully negotiated ... the U.S. and Japan insisted on its 
inclusion, the European community was hesitant for a while. The 
developing countries clearly opposed from the very beginning any 
negotiations in GATT on intellectual property... The balance between 
these two views was found in a weak operational directive at the end of 
the first paragraph (of the TRIPS mandate). It restricts negotiations 
merely to a clarification of existing GATT provisions. New rules and 
disciplines which may be elaborated in this area were qualified by the 
additional phrase, as appropriate... 

Despite all these qualifications and safeguards, the developed countries insist 
that the GATT 
negotiations should deal with all trade-related aspects of intellectual 
property rights ... these proposals are far-reaching in character ... 
they go well beyond the marginal concern of the GATT in the past with 
TRIPS... There is now an impasse in GATT on the interpretation of the 
very mandate of the Uruguay round... The developed countries want all 
trade-related issues on the intellectual property system to be 
negotiated in GATT. The developing countries have insisted that these 
negotiations be limited only. 

To the issues within GATT competence for 
example, counterfeiting of goods. The developed countries have placed 
themselves in an embarrassing position. They want to move in two 
mutually conflicting directions. On the one hand they want 
liberalisation of trade in goods, even in services ... at the same time 
they want to impose and enforce their mirror-image of an intellectual 
property system, which constrains and binds the world production and 
trading system to a further consolidation of the already highly 
privileged monopolistic interests of their enterprises. 

Thus on the same platform, they plead for freedom for their traders and 
protection for 
their manufacturers... The third world countries have refused to be 
tripped. The GATT mandate, they maintain, is strictly for trade in 
counterfeit goods. That too, is to be confined only to what is relevant 
to GATT. The refusal of the third world is not a sudden I eruption of 
obstinacy on the part of a few countries. It has a long and painful 
past. The participation of developing countries in the shaping as well 
as in the operation of the patent system has been only peripheral. Their 
patent laws were imposed by colonial masters to reserve these new 
markets only for the metropolitan manufacturers. 

To legitimise this reservation the Paris convention was established in 1893 
upon the 
insistence of the advanced industrial countries. Since independence, the 
developing countries have come to recognise how poorly placed they are 
in the snapshot of the world industrial property system. The world stock 
of patents granted runs to some 3.5 million. Of these, nations of the 
third world hold only 30,000 ... all others are held by foreigners, 
mainly the transnational corporations of five major developed market 
economy countries. Not even five percent of patents granted by 
developing countries are used in production processes in these 
countries. The system plainly operates to protect the interests of 
outside monopolies. Of all the relationships between the developed and 
developing countries, the patent system is the most unequal and the most 
iniquitous... 

Nearly all the patents granted by the developing countries 
to foreigners have been used to secure mere import monopolies. The 
import costs have been exorbitant. prices have been discriminatory. 
Attempts to use the patents in furthering production have been thwarted 
by weak provisions on compulsory licensing, and abusive and restrictive 
practices imposed upon them in technology agreements and arrangements. 
In consequence, their own national laws have created and the 
international conventions have legitimised the highly perverse situation 
under which the patent system plainly operates for them as a reverse 
system of preferences, reserving their own national markets for 
foreigners. 

Once this perception dawned, action followed quickly. 
National laws were revised in all the major developing countries. 
Several subjects and processes of critical significance to national 
development were excluded from patentability. Patent application from 
foreigners began to be rigorously examined. Inordinately high duration 
for patent rights and licences were reduced. Laws on compulsory 
licensing were tightened. Foreign patent holders were not allowed to 
hide behind the patent monopoly to import goods, which could be 
domestically manufactured. Patents were revoked if they were not used in 
domestic production. Abusive practices began to be monitored and 
regulated. These changes set the stage for revising the Paris 
convention, particularly its article 5 which ... equates imports with 
use. 

The entire system came under revision. Diplomatic negotiations 
began in WIPO to revise the Paris convention with a view to making it an 
effective instrument for the development of the third world. 

Negotiations on establishing a wholly new instrument, an international 
code of conduct on transfer of technology began in UNCTAD in response to 
the vigorous initiatives of the group of 77. The developed countries too 
joined in these processes. They committed themselves to the revision of 
the Paris convention and the establishment of the UNCTAD code the 
commitments were taken seriously by all concerned. This should not be 
forgotten - even by developed countries... Then came the crises. The 
world economy slowed down, the third world's exports fell. foreign debt 
mounted. agriculture faltered. economic growth in several countries 
fell. Pressure on the balance of payments became severe. Social tensions 
mounted. Developing countries became more vulnerable. In the developed 
countries, new administrations, conservative in outlook, came to power. 

The vulnerability of the third world began to be exploited. The 
negotiations on the UNCTAD code were stalled. Those on the revision of 
the Paris convention were blocked. The global round was abandoned. 
Commitments were forgotten. Confrontation replaced cooperation. The 
retreat had begun. That is the background to the impasse on the 
interpretation of the mandate ... despite this deadlock, the developed 
countries went ahead and presented their proposals on TRIPS. These 
proposals mark a great reversal. 

Instead of extending the scope of 
exclusions, the developed countries asked for a reduction. Instead of 
reducing the duration, they wanted an extension. Instead of opening wide 
the window of golden opportunity towards new technologies, they wanted 
it to be closed tight. Instead of putting more teeth into compulsory 
licensing, they wanted to weaken, even abolish it. Instead of 
prohibiting abusive practices, they wanted to provide grounds for 
perpetuating them. Instead of expanding flexibility of national laws in 
the third world, they wanted these laws to be carbon copies of their own 
laws. Instead of revising the Paris convention in the interests of 
developing countries, they wanted a new agreement in GATT promoting, 
protecting and enforcing their interests. 

The king, it now appears, has taken off his clothes. 
This reversal is not just a modest change of the 
directions pursued in the past. It is a complete reversal. It is a 
reversal of past commitments by the developed countries to assist in 
promoting the development of the third world. The clock is not simply 
being put back. It is to be remade to move only backward. This is the 
background to the impasse in GATT, to the refusal of developing 
countries to modify the mandate of the Uruguay round on TRIPS, to the 
recent for through conclusion of the south commission that "this 
unbalanced and inequitable approach can never command the willing 
support of the developing countries ... its acceptance would severely 
inhibit technical change and act as a major barrier to the development 
of the third world"... 

There was a history before these negotiations. To 
omit it, to close one's eyes to it, to distort it, to rewrite it -- that 
is not the way to achieve understanding among sovereign countries. A 
viable framework for the future will have to take into account the past 
concerns, the past initiatives, the past commitments ... the current 
impasse poses severe choices before the negotiating parties: either a 
greater gallstone in GATT ... or proceeding as if nothing had happened. 
A positive approach will require building upon what has been built 
before. That will call for completing the ongoing negotiations in WIPO 
and UNCTAD. (Their) successful conclusion ... will provide an 
electrifying spark to improve world understanding ... the treads can 
then be picked up in GATT. The negotiations can then proceed in what is 
germane to GATT competence -- counterfeiting of goods... 

It may well be that the good deeds may not be done ... the stronger may believe 
in 
asserting their strength. That could lead to more pressing, more 
pushing, more arm-twisting, and more tripping of the weaker states -- 
one by one. Witness the pressures exerted on the Republic of Korea, 
Taiwan province of China, Singapore, Mexico, and several other states. 
The imposition of trade sanctions by the United States against Brazil 
... illustrates the relentless pursuit of the negative approach. Instead 
of trade liberalisation, there is now trade war. Talk free trade, start 
trade wars. 

The scene brings to mind the 1939 meeting in the league of 
nations which was talking on harmonisation of traffic signs in Europe on 
the same day on which nazi armies had violated all traffic signs and 
crossed into Poland. Where would be then the objective of more 
liberalisation of trade, more freedom of competition, in shambles. Where 
would be the commitments solemnly given in all earlier negotiations? In 
the dustbin of history. These commitments include even those embodied 
... in the general principles governing negotiations on the Uruguay 
round ... "developed countries do not expect ... shall therefore not 
seek, neither shall less-developed Contracting Parties be required to 
make concessions that are inconsistent with the latter's development, 
financial and trade needs". How hollow do they sound now? The very 
posing of these questions contain their answers.

 (The author was the Director of UNCTAD's Technology Division until his 
retirement. 
He is now senior adviser to UNO/WIDER, Helsinki. The above is excerpted from 
his 
study, published by the Commonwealth Secretariat. Copies are available 
from Marlborough House, Pall Mall, London Sway 5hx, U.K.).



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