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Least Developed Countries and the TRIPS Agreement: Arguments for a Shift to Voluntary Compliance

Document Cited authorities 1 Cited in Related
Vincent
Published date01 October 2012
Pages423-447
AuthorOmolo Joseph Agutu
DOI10.3366/ajicl.2012.0044
Date01 October 2012
BACKGROUND

Following years of intense lobbying, disagreements and a circus of back and forth arguments, intellectual property rights eventually found their way into the legal framework regulating global trade.1

See generally D. Gervais (ed.), The TRIPS Agreement: Drafting History and Analysis, 3rd edn, Sweet and Maxwell (2008).

This followed the conclusion of the Uruguay Round of Multilateral Trade Negotiations, which resulted in the Final Act and annexes that included the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) as Annex C.2

Ibid., p. 28.

 Although there were protracted contests in the course of the negotiations over the TRIPS Agreement between developing and developed countries,3

UNCTAD-ICTSD, Resource Book on TRIPS and Development, Cambridge University Press (2005). These disagreements are usually characterised as ‘North–South’ issues.

 the forum also witnessed disagreements amongst the developed countries themselves.4

Gervais, The TRIPS Agreement, supra note 1, at 25. Disagreements among developed counties are sometimes labelled as ‘North–North’ issues and during the Uruguay Round some of these issues included the imposition of a private copying levy and the creation of exclusive long-term rental rights on sound recordings.

During the Uruguay negotiations, rifts started to emerge at a very early stage between developed and developing countries on the inclusion of intellectual property in the then General Agreement on Tariffs and Trade framework. Developed countries, keen to expand markets for their enterprises, argued for a comprehensive agreement embodied within the World Trade Organization (WTO) system (‘the new system’).5

Ibid., p. 14.

On the other hand, developing countries, conscious of their underdeveloped structures and their need for more flexibility in dealing with aspects of their economies that are affected by the generation, appropriation and use of information, opposed such a scheme.6

Ibid., p. 11.

 Some countries opposed to the inclusion of intellectual property rights in the ‘new system’ argued that inclusion of intellectual property in the WTO system would be superfluous and would amount to unnecessary duplication of mandates as such were already sufficiently covered by the World Intellectual Property Organization (WIPO).7

Ibid., p. 17.

Against this backdrop of divergence in interests, the TRIPS Agreement only managed to come out as a compromise, which aspect is manifested in various ways. It strove to accommodate the concerns of both developed countries (major owners of intellectual property rights) and developing countries (net importers of technology). Further, the Agreement sought to strike a balance between owners of intellectual property rights (IPRs) and the users.

Beyond the generic categorisation of countries within the WTO as ‘developed’ and ‘developing’,8

The WTO System does not define the terms ‘developed’ and ‘developing’ countries and leaves it to the members to classify themselves as they wish subject to objections from other members. See ‘Understanding the WTO; the Organisation’, available at http://www.wto.org/english/thewto_e/whatis_e/tif_e/org7_e.htm (accessed 24 March 2012).

the TRIPS Agreement went further to recognise the special circumstances of Least Developed Countries (LDCs). Specifically, it diagnosed these as economic, financial and administrative constraints and the need for these countries to enjoy flexibility in creating a ‘sound and viable technological base’.9

TRIPS Agreement, article 66(2).

 With this diagnosis, the TRIPS Agreement set up a special transition mechanism built on three main themes: popular acceptance of the agreement; fairness to the least developed countries; and flexibility in implementation as embodied in articles 66 and 67 of the Agreement (this is in addition to the other flexibilities applicable to developing countries generally). These thematic tenets are also discernible from the preamble to the TRIPS Agreement and its provisions on objectives10

Ibid., article 7.

 and principles.11

Ibid., article 8.

LDCs have until 1 July 2013 to comply with the TRIPS Agreement.12

‘Extension of the Transition Period under Article 66(1) for Least Developed Country Members’, Decision of the Council for TRIPS of 29 November 2005, document IP/C/40 of November 30, 2005, available at http://docsonline.wto.org/GEN_highLightParent.asp?qu=%28+%40meta%5FSymbol+IP%FC%2A+and+%40meta%5FTypes+%28decision+and+not+draft%29+and+not+%40meta%5FSerial%5FNum+%2800%2D4311+or+00%2D5079%29+%29+&doc=D%3A%2FDDFDOCUMENTS%2FT%2FIP%2FC%2F40%2EDOC%2EHTM&curdoc=3&popTitle=IP%2FC%2F40 (accessed 12 December 2010). This is the general compliance date for LDCs. However, with regard to pharmaceutical products, LDCs are exempted from complying with sections 5 and 7 of Part II of TRIPS before 1 January 2016. See the Decision of the Council for TRIPS on the ‘Extension of the Transition Period under Article 66(1) of the TRIPS Agreement for Least Developed Country Members for Certain Obligations with Respect to Pharmaceutical Products’, IP/C/25 of 27 June 2002, available at http://docsonline.wto.org/GEN_catalogViewAllBottom.asp?ct=DDFEnglish%2CDDFFrench%2CDDFSpanish&c2=@meta_Serial_Num&q2=02-3664&c3=@meta_Symbol&q3=%22IP%FCC%FC25%22&c1=@meta_Language&q1=E. (accessed 12 December 2011).

As this deadline approaches, this paper endeavours to reconsider the place of LDCs under the TRIPS from both a historical and a progressive perspective. From a historical standpoint, it reviews the trajectory of the emergence of the TRIPS together with its inbuilt mechanisms for safeguarding the interests of LDCs.13

These include article 66 on extension of transition period and technology transfer and article 67 on technical and financial assistance.

 Progressively, this paper assesses the efficacy of these provisions to see the extent to which they have aided and continue to aid LDCs in building a ‘sound and viable technological base’ in a fair and flexible manner

In conclusion, this paper notes that, from the very outset, the TRIPS Agreement was built on a flawed foundation in relation to the interests of LDCs. The agreement imposed an arbitrary transition period; made participation in the WTO system conditional on its acceptance as a whole (exclusions noted); and imposed concrete obligations on LDCs, but only promised aspirational benefits of dubious authenticity. The negotiating history of the TRIPS indicates a hurriedly cobbled together support structure with no clear guidelines on effective monitoring and enforcement as regards transfer of technology and financial and technical cooperation. Additionally, subsequent development in the implementation and enforcement of the agreement has shown how wide the gap is between the three-pronged thematic approaches and the genuine commitment to, and concern for the plight of, LDCs by other members of the WTO. Based on this conclusion, this paper calls for a reconsideration of the position of LDCs under the TRIPS and strongly urges the WTO system to consider exempting LDCs from obligations to comply with the TRIPS until such a time that they cease being LDCs or voluntarily opt to implement it.

 WHO ARE THE LDCS?

At the periphery of global relations there sits a group of 48 countries under the inauspicious tag of Least Developed Countries.14

Currently, the countries designated as Least Developed Countries are: Angola, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, São Tomé and Príncipe, Senegal, Sierra Leone, Somalia, Sudan, Togo, Uganda, United Republic of Tanzania, Zambia, Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Lao People's Democratic Republic, Nepal, Samoa, Solomon Islands, Timor-Leste, Tuvalu, Vanuatu, Yemen and Haiti. Details about these countries are available at the United Nations Office of the High Representative for Least Developed Countries website at http://www.unohrlls.org/en/ldc/related/62/ (accessed 4 March 2012).

These countries are characterised as the ‘poorest and weakest segment of the international community’, whose efforts to improve the quality of life of their people are hampered by extreme poverty, structural weaknesses of their economies and a lack of capacities related to growth.15

United Nations Office of the High Representative for Least Developed Countries, ‘About Least Developed Countries’, available at http://www.unohrlls.org/en/ldc/25/ (accessed 8 March 2012).

 These countries are identified based on three criteria: low-income;16

This is based on a three-year average estimate of the gross national income (GNI) per capita. According to the latest triennial review by the Committee for Development Policy in 2009, a country would be included in the list of Least Developed Countries if it showed an average of less than $905 and would only graduate from the list with an average above $1086. See United Nations Office of the High Representative for Least Developed Countries, ‘Criteria for Identification of LDCs’, available at http://www.unohrlls.org/en/ldc/related/59/ (accessed 3 December 2011).

 human capital status;17

This involves a composite Human Assets Index based on indicators of: (1) nutrition – percentage of population undernourished; (2) health – mortality rate for children aged five years or under; (3) education – the gross secondary school enrolment ratio; and (4) adult literacy rate. See ibid.

 and economic vulnerability.18

This involves a composite Economic Vulnerability Index based on indicators of: (1) population size; (2) remoteness; (3) merchandise export concentration; (4) share of agriculture, forestry and fisheries in gross domestic product; (5) homelessness owing to natural disasters; (6) instability of agricultural production; and (7)...

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