Info Service on WTO and Trade Issues (Jun18/08)
14 June 2018
Third World Network
Trump calls WTO a disaster, but wants new disciplines on innovation
Published in SUNS #8697 dated 8 June 2018
Geneva, 7 Jun (D. Ravi Kanth) - Even as the United States President
Donald Trump continues to abuse the World Trade Organization as a
"disaster", his officials along with those of other developed
countries are pushing for new disciplines for "innovation"
while blocking progress for affordable access to medicines based on
the United Nations High-Level Panel on Access to Medicines, trade
negotiators told SUNS.
On Wednesday (6 June), the US President Donald Trump described the
WTO as a "disaster", and suggested that the US will only
pursue "fair trade deals".
Trump's National Economic Council director Mr. Larry Kudlow said "international
multilateral organizations are not going to determine American policy,"
according to Washington Trade Daily of 7 June.
"The US is still involved with the WTO, but the global trade
body "has become completely ineffectual," Mr Kudlow stated,"
according to WTD.
"And even when it makes decisions, even in the rare moments when
it makes decisions, important countries don't even abide by them,"
Mr Kudlow said.
Despite such damning attacks on the WTO by the political head of the
world's largest economy and his team of officials in the White House,
the US along with its allies from the developed and some developing
countries called for incentivizing "innovation" on a multilateral
framework as part of the IPR disciplines.
At the TRIPS Council meeting on 5 June, along with the European Union,
Japan, Canada, Australia, Switzerland, Korea, and Chinese Taipei among
others, the US made a strong case for incentivizing innovation.
Surprisingly, the EU, Japan, Canada, Australia, and Switzerland among
others who want to salvage the WTO and multilateral trading system
from the escalating US illegal actions are ready to align their positions
with Washington's on IP issues, said a trade envoy who asked not to
"Worse still, they joined hands with the US to oppose the UN
High-Level Panel report for strengthening flexibilities in the TRIPS
agreement for addressing major public health challenges," the
Brazil chose to adopt an ambivalent position on these two issues -
incentivizing innovation as demanded by the US and its allies, and
promoting public health through competition law and policy as proposed
by China and South Africa, said a participant who took part in the
During the TRIPS Council meeting which lasted for two days (5-6 June),
the US along with its allies vehemently opposed a proposal sponsored
by China and South Africa and later co-sponsored by India and Brazil
on "Intellectual Property and the Public Interest: Promoting
Public Health through Competition Law an d Policy."
The US also severely opposed several other issues raised by the developing
South Africa, which enumerated the salient features of the joint proposal
with China, India and Brazil, underscored the need for considering
the UN's HLP report that seeks to achieve Goal 3 of the SDGs.
Last year, the UN's high-level panel made significant recommendations
on how to avail of and strengthen the flexibilities in the TRIPS agreement
for ensuring accessible medicines at affordable prices.
"The TRIPS Agreement strikes an appropriate balance between the
interests of right holders and users. Article 7 of the TRIPS Agreement
recognizes that the protection of intellectual property should contribute
to the promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of users and
producers of technological knowledge and in a manner conducive to
social and economic welfare and to a balance of rights and obligations,"
China and South Africa argued in their proposal circulated on May
The TRIPS agreement has also emphasized that "the principles
of IP protection are based on underlying public policy objectives".
Besides, there is an urgent need for "formulating or amending
their laws an d regulations, adopt measures necessary to protect public
health and nutrition, and to promote the public interest in sectors
of vital importance to their socio-economic and technological development,
provided that such measures are consistent with the provisions of
this [TRIPS] Agreement," China and South Africa said.
The two countries called on the WTO members to avail of "TRIPS
flexibilitie s that provide transition periods for LDCs (extended
by the WTO until 1 January 2033), differing IP exhaustion regimes,
refining the criteria for grant of a patent (patentability criteria),
pre-grant and post-grant opposition procedures, as well as exceptions
and limitations to patent rights once granted, including regulatory
review exception ("Bolar" exception) to facilitate market
entry of generics , compulsory licences and government use. Despite
such flexibility, many least developed and developing countries cannot
implement competition regimes due to the lack of capacity to use competition
law to achieve public health objectives."
South Africa pointed out that "Competition law" is not fully
discussed with in the WTO's TRIPS Agreement.
In their proposal, South Africa and China stated that "the fundamental
objective of competition law is to protect the integrity of competitive
markets against abusive conduct, and to protect consumers from the
effects of such conduct."
"Even though the TRIPS Agreement sets minimum norms for standards
of IP protection that significantly limit Members' discretion on a
large number of IP rights issues, it is not the case with competition
law," South Africa and China maintained in their proposal.
The proposal also suggested that "members are free to design
competition laws in such a way as to take account of their domestic
interests and needs, including taking account of their respective
levels of development, subject only to the natural limits defined
by the territorial limits of such laws."
Further, various provisions of the TRIPS Agreement, according to China
and South Africa, "are relevant to competition law including
Article 6, Article 31(k) and Article 40."
As such, these provisions leave broad discretion to Members in how
they apply competition law in respect of the acquisition and exercise
of IP rights, South Africa and China maintained.
In sharp response to the proposal, the US, which had earlier opposed
the UN report, said the proposal on public interest fails to account
fully the benefits of protecting IP.
The US also said the China-South Africa proposal will have negative
effects by discouraging members from protecting and implementing IP
regimes. It argued that IP and competition law are distinct disciplines
implemented and overseen by different administrative authorities.
It maintained that the TRIPS Council is not the appropriate forum
for discussing competition law and policy issues.
The EU also criticized the joint proposal by developing countries,
cautioning about the use of competition policy as a TRIPS flexibility.
The EU, according to participants present at the meeting, said the
UN High- Level Panel was wrong to assume that there is "policy
incoherence between the justifiable rights of inventors, international
human rights law, trade rules and public health."
The EU questioned several other findings of the UN report, especially
about "refining the criteria for grant of a patent, patentability
Despite the UN Panel being co-chaired by former Swiss President Ruth
Dreifuss, Switzerland said that the panel's deliberations were not
driven by members. Switzerland argued that member states did not endorse
the panel's recommendations.
In sharp contrast, the US and its allies put up a united front for
incentivizing innovation. The US spoke about the critical role of
innovation in different creative areas, particularly in music industry
which provides a robust copyright protection and contributes to bringing
people closer together and generating greater cultural awareness.
Australia suggested the role played by Reach&Match, a trademark
innovating educational kit that empowers children with disabilities
and children in mainstream education to learn together in an inclusive
The EU said digitalization is critical for addressing the challenges
faced in terms of health care while Japan argued that efficient IP
systems can support and promote innovation in various important areas.
Switzerland spoke about the broad repercussion in technological areas
such as the Solar Impulse project.
South Africa, however, cautioned the proponents on incentivizing innovation
on grounds that the relationship between IPR and economic development
is complex and difficult to quantify.
It maintained that the attempt to quantify the impact of the IPRs
depends on many variables that are determined by their respective
Given the disparities in access to Information and Communication Technologies
and uneven levels of progress in the pace of innovation among countries,
incentivizing innovation will not generate positive benefits for confronting
global challenges such as climate change, South Africa maintained.
India said the strength of IP rules should be calibrated to the levels
of development in respective countries.
The TRIPS Council meeting also witnessed a widening North-South divide
on other issues such as the review of the provisions of Article 27.3
(b), the relationship between the TRIPS Agreement and the Convention
on Biological Diversity, protection of traditional knowledge and folklore,
and non-violation and situation complaints.
In short, while the US President continues to pile criticism on the
WTO as a "disaster", the US is able to keep its alliance
with other major industrialized and some developing countries intact
by blocking progress for addressing life-and-death issues concerning
access to affordable medicines.