TWN Info Service on WTO and Trade Issues (May13/09)
28 May 2013
Third World Network  

Dear friends and colleagues

The following article by Brook K. Baker first appeared in IP-Health Digest Vol. 37 Issue No. 9.  Professor Brook K. Baker is with Northeastern University School of Law's Program on Human Rights and the Global Economy, and is Honorary Research Fellow, University of KwaZulu Natal, Durban, South Africa.

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Third World Network

Bad faith negotiation tactics in LDC extension request
Published in SUNS #7590 dated 24 May 2013
 
Boston, 23 May (Brook K. Baker*) -- Least developed country Members of the WTO have offered a properly motivated request for an unconditional extension of the transition period within which they must become fully compliant with the TRIPS Agreement. Their request is elegantly simple and straightforward and is entirely consistent with the requirements of Article 66.1 of the TRIPS Agreement.
 
First, they request an extension that is not burdened by a unauthorized standstill/no-rollback provision that requires them to maintain existing levels of compliance with TRIPS standards. Such a clause was improvidently granted in 2005 when LDC Members sought their first full extension of the LDC transition period. At that time, rich countries insisted LDCs lock-in IP standards imposed by past colonial powers or adopted pursuant to the warped technical assistance offered by WIPO and other technical agencies. In essence, LDCs were coerced or tricked into adopting a standstill provision that had only been authorized by TRIPS Article 65.5 with respect to non-LDC developing country Members in terms of their shorter and non-extentible transition periods.
 
LDC Members are rejecting that approach this time, wishing to maintain the policy space they may need to undo implementation, application, and enforcement of IP rights if and when they conclude that that is in their national interests to do so, taking into account their weak technological and institutional capacities.
 
Given strong evidence that heightened intellectual property rights and enforcement mechanisms are not associated with technological advancement, foreign direct investment, or development more broadly, LDCs are making a very wise choice to regain freedom to undue IP shackles that have mainly benefitted IP rightholders from rich countries and that have resulted in unaffordable prices for many essential public goods including medicines, educational resources, and green technologies.
 
Second, LDCs request an extension that lasts as long as a particular LDC Member remains an LDC. Again they have offered a compelling rationale. Their individual and collective conditions remain substantially unchanged - they have fallen even further behind in terms of their technological base and they have yet to overcome crushing capacity constraints that negatively impact their economic and social development. Short extensions, even when tacked together, do not provide sufficient time to overcome inherited, structural deficits. In addition, the high cost of IP-protected monopoly priced goods drains scarce foreign currency reserves and undermines key government investments in infrastructure, capacity-building, and social services. The path to more sustainable development for LDCs is long and hard, and they should have the security of an exception from IP mandates should they feel that such a choice is in their best interests.
 
The US and EU are playing an unprincipled cat-and-mouse game as the expiration of the existing transition period draws near (June 30, 2013). Formally, the US and EU say that they do not yet have official policies on the LDC extension request. Nonetheless, they are meeting with LDCs almost every week trying to talk them out of what the LDCs are entitled to - an automatic extension upon proper request. In essence, the EU and US are trying to force LDCs to bid against themselves: "Why can't you accept a standstill clause - you did before;" "Why do you need a longer rather than a shorter extension;" "If you want to weaken the no-rollback clause, you have to shorten your extension request."
 
Instead of going on the record with their unreasonable demands, powerful US and EU negotiators in Geneva are using one of the classic bad faith tactics - they are trying to bully LDCs into submission with the unauthorized threat of a veto - one they don't actually have under Article 66.1, which states that extensions "shall" be granted.
 
Behind the scenes, the US and EU are also trying to get the WTO secretariat to do some of their dirty work. They are trying to create a dynamic where the LDCs are constantly having to re-defend the fully defended request they have already submitted. The US and EU are trying to orchestrate it so that it seems that the LDCs are also saying "no", being unreasonable - when in fact the unreasonable demands and behind-the-scenes bullying of the US and EU are never exposed and aired in public.
 
If the US and EU believe that LDCs are not entitled to extensions when requested and properly motivated, they should be forced to cite support for that position. If the US and EU think that a standstill clause is required, they should either point to textual authority in TRIPS that supports that position or seek an amendment to TRIPS to impose one.
 
If they think that LDCs must be satisfied with short, serial extensions, they should be required to prove how short extensions actually advance technological and development capacity. But, the US and EU are not honest enough to use good faith tactics. They would rather hide behind a smoke screen of deniability and use back-room, strong-arm tactics and time pressures to engineer a capitulation that will be recast as a benevolent, consensual agreement.
 
Let's hope that the LDCs will remain firm and continue to demand the unconditional extension that is their right.
 
(* Professor Brook K. Baker is with Northeastern University School of Law's Program on Human Rights and the Global Economy, and is Honorary Research Fellow, University of KwaZulu Natal, Durban, South Africa. This article first appeared in IP-Health Digest Vol. 37 Issue No. 9 and is reproduced here with the author's kind permission.) +