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TWN Info Service on Intellectual Property Issues (Oct20/11)
22 October 2020
Third World Network


LDCs call for extension of transition period to implement TRIPS
Published in SUNS #9216 dated 22 October 2020

Washington DC, 21 Oct (D. Ravi Kanth) – In their fight against the COVID-19 pandemic, the poorest countries have called for an extension of the transition period for 12 years, starting from 1 July 2021, to implement the World Trade Organization’s TRIPS Agreement.

At the WTO’s TRIPS Council meeting on 16 October, Chad, on behalf of the least-developed countries (LDC) group, presented a strong proposal as to why the poorest countries would need an extension of the transition period of 12 years under Article 66.1 of the TRIPS Agreement, people present at the meeting told the SUNS.

Chad said that the current extension for not implementing the TRIPS provisions, barring Articles 3, 4, and 5 (dealing with national treatment, most-favoured nation treatment, and multilateral agreements on acquisition or maintenance of protection), will expire on 1 July 2021.

According to Chad, “the poorest and weakest segment of the international community, characterized by constraints such as low per capita income, low level of human development, economic and structural handicaps to growth,” face an existential crisis due to the COVID-19 pandemic.

The COVID-19 pandemic, which has already reached more than 40 million confirmed cases with over 1.1 million deaths around the world, has undoubtedly “exacerbated the challenges that the LDCs continue to face.”

The LDC proposal and the joint proposal by South Africa, India, Kenya, and Eswatini (formerly Swaziland) seeking a waiver from implementing the TRIPS provisions on copyrights, trademarks, patents, and industrial designs dominated the TRIPS Council meeting on 16 October, said participants, who asked not to be quoted.

The two proposals were largely supported by developing and least-developed countries.

The joint proposal by South Africa, India, Kenya, and Eswatini laid out a comprehensive case in seeking a waiver from the TRIPS provisions concerning copyrights, trademarks, patents, and industrial designs (see SUNS #2014 dated 20 October 2020).

The developed countries led by the United States along with the European Union, Japan, Switzerland, and Norway among others adopted ambiguous positions towards the two proposals, said a participant, who asked not to be quoted.

While the US, the EU, Switzerland, Japan, and Norway maintained that they are willing to discuss the LDC extension proposal next year, they rejected the joint proposal by South Africa, India, Kenya, and Eswatini, the participant said.

The LDCs asked the chair of the TRIPS Council, Ambassador Xolelwa Mlumbi-Peter from South Africa, to keep the item on the agenda for further consultations.

South Africa, India, Kenya, and Eswatini also requested that their proposal be kept on the agenda for further discussions before the WTO General Council meeting in December, the participant added.

Nevertheless, the two proposals, which are essentially aimed at addressing the COVID-19 pandemic and the resulting heath, economic, and developmental crisis, have exposed the apparent “double-standards and stonewalling tactics” adopted by the developed countries at the meeting, the participant said.

On the LDC proposal, Chad said that the continued lockdowns and slump in global demand has “particularly impacted LDCs that are dependent on export of finished goods” in areas such as textiles and clothing, leather products, and agricultural items.

Even the LDCs that are expected to be graduated from their current LDC status such as Bangladesh, are now being impacted severely by the COVID-19 pandemic.

“Against this backdrop,” said Chad, “overcoming our economic, financial and administrative constraints and our need for flexibility to create a viable technological base, is essential.”

In its intervention at the TRIPS Council meeting, Bangladesh further elaborated on the LDC proposal (IP/C/ W/668) that sought “extension of transition under TRIPS Article 66.1 as long as Member remains in the LDC category and for a period of twelve years after the entry into force of a decision of the United Nations General Assembly to exclude the Member from the least-developed country category.”

“And nothing in the TRIPS Article 66.1 limits the scope of the request that can be made by LDCs,” Bangladesh emphasized.

Under Article 66.1 of the TRIPS Agreement, the LDCs, due to their economic, financial and administrative constraints and the need for flexibility to create a viable technological base, shall not be required to apply the provisions of the TRIPS Agreement other than Articles 3, 4, and 5 for a period of 10 years.

The LDCs secured the first extension for not implementing the TRIPS provisions on 29 November 2005, when it was extended until 1 July 2013, and a further extension was approved by the WTO members until 1 July 2021.

Bangladesh informed members that due to “the current grim scenario of socio-economic development in the LDCs, it is not possible to assess when LDCs will be able to overcome their economic, financial and administrative constraints.”

Therefore, the LDCs “will need flexibilities as long as they are under these severe uncertainties and as long as they are unable to create a viable technological base,” Bangladesh argued.

It said that, remaining in the LDC category, the poorest countries will be in continuous need of the transition period for exemptions as provided under TRIPS Article 66.1 for a longer duration, Bangladesh said.

Bangladesh said that the preamble in the TRIPS Agreement recognized the special needs of the LDCs and their requirements for maximum flexibility.

According to Bangladesh, “the maximum flexibility in TRIPS implementation is vital for the LDCs.”

The LDCs, which have small delegations, will find it difficult “to come to the TRIPS Council after every fixed duration to request and negotiate this extension of transition with their limited capacities,” Bangladesh said.

“Therefore, the transition period should remain in force for as long as a country remains a least developed country,” Bangladesh argued.

Explaining that the “LDCs continue to face many difficulties in reaching their development goals, even as the period for implementing the Istanbul Programme of Action (IPoA) for the LDCs for the Decade 2011-2020, comes to an end,” Bangladesh said that “one of the main targets of IPoA was to meet the graduation criteria by half of LDCs by 2020.”

It drew attention to the three criteria for LDC graduation under the United Nations procedures, which include (1) income criterion, based on a three-year average estimate of GNI per capita; (2) Human Assets Index (HAI); and (3) Economic Vulnerability Index (EVI).

Bangladesh said that “to reach eligibility for graduation, a country must reach threshold levels for graduation in two consecutive triennial reviews for at least two of the three criteria, or its GNI per capita must exceed at least twice the threshold level.”

So far, only three countries have graduated during this decade, while 12 countries have already met the graduation criteria and are on the path to graduation, Bangladesh said, suggesting that 15 countries have already met at least one criterion for graduation.

Although the graduation from LDC status has taken a new momentum, LDCs need special attention of the members on the future course after graduation, Bangladesh said.

Citing the 2016 UNCTAD LDC report, which suggested that “the process of development beyond graduation merits much greater attention, even during the pre-graduation period – that graduation itself should not be the primary focus of LDCs and their development partners, but should rather be viewed as one milestone in LDCs,” Bangladesh said that “graduation does not represent a solution to all the graduating country’s development challenges.”

Effectively, “the challenges of the post-graduation period are a continuation of those that characterized the pre-graduation period”, Bangladesh said.

It argued that the international community maintains similar views on post-graduation challenges, citing the UN General Assembly resolutions 59/209 of 2004 and 67/221 of 2012 that “called upon the WTO Members to allow graduated LDCs the existing S&D treatment and exemptions available to LDCs for some additional years to help support their transition for smooth and sustainable graduation.”

Bangladesh called for a “positive response to this call (from the international community),” emphasizing that it “is particularly important for TRIPS Agreement as LDC graduation criteria does not specifically address their economic, financial and administrative constraints.”

The implementation of the TRIPS Agreement requires, among other things, “adequate financial resources, administrative capacity, judicial capacity, legal regime, and border measures, which may not be available soon after graduation,” Bangladesh said.

Therefore, the LDC group, said Bangladesh, “proposes that an LDC Member after exclusion from the list of LDCs as per decision of the UN General Assembly should be provided a transition period for 12 years for implementing the TRIPS Agreement.”

Approval of the LDC demand, according to Bangladesh, “will genuinely respond to the call that Members recognized at the UN General Assembly.”

In the absence of approval from the developed countries, Bangladesh, on behalf of the LDCs, requested the TRIPS Council to keep its item on the agenda for the next meetings of the Council until the issue is resolved.

In the meantime, said Bangladesh, “the LDCs will engage bilaterally with Members concerned,” suggesting that the chair of the TRIPS Council facilitate the consultations.

 


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