TRIPS versus biodiversity: What to do with the 1999 review of Article 27.3(b) May 1999 |
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Introduction This paper summarises GRAINs view of what should be done with the World Trade Organisations Trade Related Intellectual Property Rights (TRIPS) Article 27.3(b) during its 1999 Review. Article 27 is one of the most contentious principles underpinning the new multilateral trade system. Its subparagraph 3(b) is particularly threatening, requiring all WTO member states to grant legal monopolies on the very basis of food security: crop biodiversity. The implications for farmers, scientists, consumers on the one hand and a few transnational corporations aiming to control the world's food supply on the other are immense. For this reason, the review agenda of TRIPS is an important and immediate concern for many developing countries. GRAIN collaborates with a broad range of scientists, governments, civil society groups, farmers organisations and popular movements in different parts of the world. The ideas articulated below come from many people working and strategising together to create a much more conducive basis for local communities to enjoy their fullest rights and powers to live and work with biological diversity. TRIPS is a new obstacle in this path because it usurps the rights of these communities. It also undermines the promises of the Convention on Biological Diversity. TRIPS Article 27.3(b), which requires all WTO countries to provide some kind of intellectual property right (IPR) on plant varieties, is up for review in 1999. In 2000, the entire TRIPS Agreement will be reviewed. In the meantime, a whole new round of trade negotiations which could result in further changes to TRIPS could commence before 2000. What can be attained or safeguarded through this process? In terms of the 1999 review, GRAIN sees three broad scenarios developing countries can fight for. The way TRIPS stands at the moment, the only way to fully ensure a fair deal for communities and people in developing countries is to remove biodiversity from TRIPS altogether. Since achieving this ambitious goal may take more time than the 1999 review allows, the most practical fall-back option is to secure a five-year suspension of the implementation of Article 27.3(b) so that developing countries, which are facing enormous difficulties with TRIPS, may sort out the solutions more appropriately. In any case, developing countries must at least ensure that there is no strengthening of the TRIPS Agreement, as some developed countries are pushing for. It is important to stress that these are not mutually exclusive options and they should be fought for simultaneously. The basis and consequences of these three options are discussed in more detail below. 1) BIODIVERSITY OUT OF TRIPS Remove biodiversity from the legal jurisdiction of WTO by providing broader exclusions under TRIPS. Background: TRIPS requires member states to provide patent protection for all fields of technology. Articles 27.2 and 27.3 outline which inventions member states may exclude from patent protection and under what conditions. The exceptions to the rules are in these two articles: the objective here is to expand them. Article 27.3(b) currently requires all member states to provide intellectual property protection either patents or an effective sui generis system or both for plant varieties. No definition of "effective sui generis system" is given, yet developing countries must put such systems in place by the end of 1999 if they choose this as an alternative to patenting and if they wish to avoid punitive trade sanctions. Most developing countries are contemplating the sui generis route to compliance, instead of patenting. A number of influential bodies, including the WTO itself, are pushing for a narrowing of the sui generis option to one legislative model provided by the Union for the Protection of Plant Varieties or UPOV (see Option 2 below). This is unfair and uncalled for. UPOV is not mentioned in the TRIPS Agreement when other relevant IPR treaties are. Independent legal and economic experts have reiterated in many fora and publications that UPOV's offerings should not be swallowed as an effective sui generis system for TRIPS (Leskien & Flitner, 1997; Lesser, 1999) and that there is ample scope for manoeuvre, flexibility and national discretion in interpreting the sui generis option (South Centre, 1997). There are grave problems associated with intellectual property protection of plant varieties, particularly the UPOV Convention itself (Gaia & GRAIN, 1998b). The major ones are summarised below.
There is also fundamental conflict between TRIPS and the Convention of Biological Diversity (CBD, Gaia & GRAIN, 1998a). The major points of contention are that:
These are conflicts at the level of substantive provisions, not mere operating principles. And it is clearly TRIPS which undermines the implementation of CBD. Parliaments, governments, heads of state and trade negotiators increasingly recognise this. Annex 1 provides a snapshot of documented instances where political leaders have called for the primacy of CBD over TRIPS in the past year alone. It is important to remember that TRIPS was not negotiated as a discrete treaty. It was drawn up by a small group of GATT negotiators and became part of a take-it-or-leave-it package toward the end of the Uruguay Round. Therefore, governments were not able to say yes or no to TRIPS specifically in consideration of their obligations to CBD. The industry argues that intellectual property protection is necessary, indeed a "prerequisite", for investment and innovation. Any review of the literature will indicate that this is not so. There is no cause-effect link between strong intellectual property right (IPR) regimes and increased investment. If one looks at foreign direct investment (FDI) flows as mapped by UNCTAD, for example, there is no correlation between FDI inflows and the availability of strong IPR protection. FDI flows are highly concentrated in a few countries and 60% of them amount to capital flows within the same corporation via mergers and acquisitions. China attracts a full third of all FDI going to the developing world, yet her scorecard does not shine for protecting US or European intellectual property! Germany is consistingly running a negative FDI balance sheet (more investment leaves the country than arrives) these years, not because Germany offers a bad climate for IPR enforcement. In reality, and despite a lot of effort, economists have not managed to isolate IPRs from other factors of economic development in order to say with confidence what they lead to other than monopoly pricing, market distortions and a range of abusive business practices. For these reasons, it is widely accepted among economists that arguments about strong IPR laws stimulating investment are simply not well founded (Abbot, 1998). Even the World Bank has recently reported that the relationship between IPR and trade flows is ambiguous in general and insignificant in high technology sectors specifically (Fink and Primo Braga, 1999). As to innovation, much of it goes on in absence of IPR as illustrated by the whole history of plant breeding, health care and even recent decades of biotechnological R&D. Most importantly, there are many tools to stimulate innovation, which are more in the public interest and which do not foster dangerous monopolies,4 but governments are being encouraged to overlook them. On the broader scale, there is a large body of opinion held by academia, politicians, and civil society groups all over the world, that IPRs should not be regulated under the World Trade Organisation at all.5 Refining the jurisdiction of TRIPS would be part of a more fundamental reassessment of whether trade policy instruments governing market access should determine national intellectual property regimes. Meaning of the proposal: This is the most clear cut position being voiced for the review agenda: to remove the legal obligation embedded in WTO's trade regime for countries to apply IPRs (patent or sui generis system) toward any form of biodiversity. Both the patent and sui generis systems under TRIPS imply private and exclusive monopolies. Implementation of such regimes, under the guise of incentives for R&D, should be optional, not obligatory For many grassroots groups in the South, and for GRAIN, this is a non-negotiable position. Providing incentives for innovation with biodiversity or "sustainable use" in environmental jargon is not a trade issue. It is about strengthening capacities and rights at the local and national levels, rather than forcing people to rely on technology packages from outside. In practical terms, it means that the 1999 review will need to amend Article 27.3(b) to provide member states with the option of excluding all biological diversity-related inventions from their IPR laws. "Biodiversity-related" includes inventions based on traditional knowledge which do not necessarily involve biological resources per se. This exemption will also require changes to Article 27.2 in the 2000 review of the whole TRIPS Agreement, since this article requires the patenting of micro-organisms. This option calls for an expansion of what may be excluded from TRIPS. Many Southern groups supporting this position are not calling for a new obligation on countries that currently provide IPR on life forms to prohibit this. The idea, rather, is to use the review to adjust TRIPS to the needs of developing countries and reconcile it with the Convention on Biological Diversity (CBD). With a full exemption for biodiversity in TRIPS, countries would have greater scope to implement the conservation and sustainable use objectives of CBD and devise more appropriate incentives for exploitation of biodiversity. They would also be able to incorporate benefit-sharing provisions in their IPR regimes, as the European Parliament fought hard for but lost in the final vote last year on the EU directive on patenting biotechnological inventions. 2) FIVE-YEAR SUSPENSION OF ARTICLE 27.3(b) Implementation of TRIPS Article 27.3(b) should be suspended in 1999, allowing both developing and least developed countries an additional five years to develop legislation which both satisfies current obligations and better serves the needs of the countries and their people. Background: The TRIPS Agreement allows member states to fulfil their obligations to protect IPR over plant varieties through an "effective sui generis system". However, it fails to describe or define such a system. UPOVs plant variety protection system, developed by industrialised countries for industrial agriculture, is often cited as a sui generis system appropriate to TRIPS. Indeed, UPOV members are lobbying for the insertion of a reference to UPOV in TRIPS as the model sui generis legislation (UPOV, 1998). If that were not enough, the World Intellectual Property Organisation and the WTO have teamed up with UPOV to carry out a series of joint seminars aimed at convincing developing countries to adopt UPOV-type legislation or join the Union as compliance with TRIPS Article 27.3(b). One seminar was held in Geneva for all developing countries in February while another was conducted for Asia-Pacific in Bangkok in March. In early May, a similar exercise targeted anglophone Africa. The pressure being drilled into the minds of African authorities is particularly phenomenal and scandalous. In February 1999, UPOV succeeded in making eleven of some of the poorest countries in Africa actually believe that they had to join UPOV to fulfill their TRIPS obligations.6 These eleven countries which are members of the French-speaking African Organisation of Intellectual Property or OAPI have least-developed country (LDC) status with WTO. As LDC members of WTO, they do not have to implement TRIPS 27.3(b) until 1 January 2006. Yet, somehow, they were led to believe that they should discard the seven years still ahead of them to work out the most appropriate solution for their farmers and simply fall in line with the industrialised countries' highly rigid sui generis regime. This unnecessary move clashes head-on with the work under way at the Organisation for African Unity to develop sui generis systems that ensure the protection and development of community rights in Africa (OAU/STRC, 1998). Even if the "sui generis system" is left more open to interpretation, member states of the WTO will not know what "effective" means until a dispute panel is tasked with passing judgement on the matter. While no disputes have arisen so far, WTO authorities expect such disputes to take off against developing countries after 2000 (Otten, 1998). In the meantime, numerous legal experts and industry associations have ventured their own views on the matter. For Leskien and Flitner (1997), an effective sui generis system under TRIPS 27.3b would be one that simply provides a remuneration to the breeder of a plant variety. For CIOPORA (1998), the international breeders association for asexually-reproduced plants, an effective sui generis right under TRIPS is one that provides... the same protection as a patent. These ambiguities are making the task of member states to implement the provision extremely difficult. Plant variety protection laws are in effect in perhaps 20 or so developing countries. Drafts are being drawn up or debated in others. Countries are behind schedule in meeting the deadline of TRIPS Article 27.3(b) and have voiced the need for an extension of the timeframe. This need is being voiced in the context of at least two problems: The first is the growing uncertainty about the nature of the review itself. Developed countries are deliberately trying to narrow the review down to a discussion of implementation only. This is a tactic to defer any renegotiation of TRIPS from its proper venue a well-focused review that is part of the WTO's built-in agenda to the more controversial agenda of a new round of trade talks. The new round, a full scale negotiation of multiple trade agreements, is expected to be launched at the Third Ministerial Conference in Seattle, November 1999. Developed countries would prefer to discuss the substance of TRIPS at this venue because they can more easily steer the South into making concessions on IPR for improved market access when more than Article 27.3(b) is on the negotiating table. Developing countries have argued in both formal and informal sessions of the TRIPS Council that the 1999 review must focus on the provision of the Article, as stated in the Article itself. The Association of Southeast Asian Nations (ASEAN) has been most formal in tabling this demand (TRIPS Council Secretariat, 1998). The second problem that is emerging as we move deeper into 1999 is that developing countries are being deliberately pressured to adopt legislation with no time for public discussion. This is causing consternation among civil society groups and farmers organisations. Why? Because the basis of national agriculture seed supply is being reframed under a new legal system that will very profoundly affect not only markets but the very fabric of R&D at the national level. In a country like Pakistan, where the government is being forced to do something by the year's end that will spare it another trade dispute with the US, the authorities expect that the PVP Act which they have put up for adoption will result in foreign companies being "persuaded" to supply their market (Ahmad et al, 1999). How then can Pakistan develop its independent scientific research capacities? How can an appropriate national breeding force, that works in cooperation with farmers' agendas, develop? It clearly will not develop, because multinational corporations and research institutes have their own agendas. The rush to escape punishment from more powerful trading partners is causing governments to disregard more democratic policy-making processes and is already inspiring tremendous resistance from the people who will be most affected. A moratorium on the timeframe of implementation of Article 27.3(b) could diffuse some of these tensions and, more importantly, should allow for more democratic and intelligent handling of a far-reaching policy shift in world agriculture. Meaning of the proposal: Suspending the implementation of Article 27.3(b) for five years for both developing and least developed countries might not require any amendment to the Article, but might affect Article 65 of TRIPS on transition periods. The benefits of suspending implementation would include the following:
3) RESISTING THE STRENGTHENING OF TRIPS Any proposal to strengthen the IPR obligations of developing countries under TRIPS should be fiercely resisted. Background: We know from historical accounts of the Uruguay Round of GATT negotiations that the United States has always pushed for TRIPS to require the fullest patent protection possible worldwide. This means the least exclusions from what can be monopolised at the national level. Developing countries opposed the introduction of any IPRs into GATT. They lost. The Europeans then fought for an exclusion related to plant varieties which are not patentable in Europe. They won. The result was Article 27.3(b) which allows for a sui generis "alternative" to patenting. Despite TRIPS, the US imposes "TRIPS-plus" standards of IPR protection on many countries through bilateral investment treaties, bilateral research cooperation agreements and Section 301 of its own 1974 Trade Act. Many industry associations in the US are not satisfied with the protection that TRIPS currently offers to "their" intellectual property. For these reasons, the US government is intent on strengthening TRIPS towards greater rights for US business concerns. Other developed countries support the US position. As hosts of the WTO's Third Ministerial Conference later this year, the US has already announced in the WTO General Council its expectation that the conference will include in its agenda "eliminating the exclusion from patentability of plants and animals and incorporating key provisions of the UPOV agreement regarding plant variety protection" (United States, 1998). The US agenda presents the worst case scenario for agricultural biodiversity in developing countries. Consequently, the least that should be done during the TRIPS review is to resist every building block of that legal construction. This is feasible in the context of a discrete review of TRIPS by the TRIPS Council, where consensus rules. It would not be so feasible if the entire discussion is deferred to the new round of trade negotiations, where virtually anything goes. Meaning of the proposal: If the worst case scenario were to materialise, the strengthening of TRIPS could mean several things, including:
Industrial sectors in the developed countries are intent on seeing this scenario unfold so that they may expand their commercial control of the world's biodiversity. For that reason alone, developing countries should absolutely resist the strengthening of WTO members' obligations under TRIPS. Any move on the part of the industrialised countries to introduce UPOV, to narrow down or delete the still open sui generis option or even to do away with Article 27.3(b) will only push the South deeper into the corner of ceding their rights to benefit from the valuable biodiversity that their communities are still maintaining and developing. Resisting this pressure is a sine qua non of any further negotiation over TRIPS, where the real objective is to disentangle biodiversity from the multilateral trade regime.
Annex 1 POLITICAL APPEALS FOR THE PRIMACY OF CBD OVER TRIPS in chronological order, over the past year
Compiled by GRAIN, April 1999
1. For example, Japan prohibits
farmers from saving planting material of 23 genera and species under its
implementation of UPOV (Otomo, 1999). The US restricts seed saving to
the amount of seed needed to replant a crop, beyond which it is now unlawful
(van Wijk, 1996). In the European Union, farmers can only save seed of
certain crops and must pay a recurrent royalty each time, except for small
farmers. a.
Strengthening Africa in World Trade, Report
of the first SEATINI Workshop, Harare.
References: * Abbott, Frederick M (1998). "The enduring enigma of TRIPS: A challenge for the world economic system." Journal of International Economic Law, Vol. 1, No. 4, Oxford University Press, December. * Ahmad, Syed Irfan, Muhammad Ibrahim and Mian Muhammad Wajid (1999). "National Experience and Plan to Implement Sui generis Systems in Pakistan." Paper presented at the UPOV-WIPO-WTO Joint Regional Workshop on "The Protection of Plant Varieties under Article 27.3(b) of the TRIPS Agreement." Bangkok, 18-19 March 1999. * CIOPORA (1998). Position Paper of CIOPORA Regarding Article 27.3 of the TRIPS Agreement. International Community of Breeders of Asexually Reproduced Ornamental and Fruit Tree Varieties, Geneva, October. * FAO (1998). The state of the world's plant genetic resources. UN Food and Agriculture Organisation, Rome. See Chapters 1.5.2 and Annex 2. * Fink, Carsten and Carlos A Primo Braga (1999). How Stronger Protection of Intellectual Property Rights Affects International Trade Flows. Working Papers - International Economics, World Bank, February. URL: http://www.worldbank.org/html/dec/Publications/Workpapers/wps2000series/wps2051/wps2051.pdf * Gaia Foundation and GRAIN (1998a). "TRIPS versus CBD. Conflicts between the WTO regime of intellectual property rights and sustainable biodiversity management." Global Trade and Biodiversity in Conflict, No. 1, London/Barcelona, April. URL: http://www.grain.org/publications/gtbc/issue1.htm * Gaia Foundation and GRAIN (1998b). "Ten reasons not to join UPOV." Global Trade and Biodiversity in Conflict, No. 2, London/Barcelona, May. URL: http://www.grain.org/publications/gtbc/issue2.htm * Leskien, Dan and Michel Flitner (1997). "Intellectual Property Rights and Plant Genetic Resources: Options for a Sui Generis System." Issues in Plant Genetic Resources, No. 6. International Plant Genetic Resources Institute, Rome, June. * Lesser, William (1999). "The Elements of an Effective Sui Generis System for the Protection of Plant Varieties." Paper presented at the UPOV-WIPO-WTO Joint Regional Workshop on "The Protection of Plant Varieties under Article 27.3(b) of the TRIPS Agreement." Bangkok, 18-19 March 1999. * OAU/STRC (1998). Draft Model Law on Community Rights and Access to Genetic Resources. Science, Technology and Research Commission of the Organisation for African Unity, Addis Ababa, March. Available online at URL: http://users.ox.ac.uk/~wgtrr/OAU-decl.htm * Otten, Adrian (1998). "Implementation of the TRIPS Agreement and prospects for its further development." Journal of International Economic Law, Vol. 1, No. 4, Oxford University Press, December. * Otomo, Tetsuya (1999). "The Japanese Experience in Implementing a Sui Generis System." Paper presented at the UPOV-WIPO-WTO Joint Regional Workshop on "The Protection of Plant Varieties under Article 27.3(b) of the TRIPS Agreement." Bangkok, 18-19 March 1999. * Pray, Carl and Robert Tripp (1998). "Industrial Policy Issues: Participation, Prices and Property Rights." Maize Seed Industries in Developing Countries, Morris M L (ed), Lynne Rienner / CIMMYT, Boulder. * Rural Advancement Foundation International and Heritage Seed Curators Aurstralia (1998). Plant Breeders Wrongs. Report released September 16, 1998. URL: http://www.rafi.org * South Centre (1997). The TRIPs Agreement: A Guide for the South. The Uruguay Round agreement on Trade-Related Intellectual Property Rights. Geneva, November. URL: http://www.southcentre.org/publications/trips/toc.htm * TRIPS Council Secretariat (1998), personal communication, 9 December. * United States Government (1998). "Preparations for the 1999 Ministerial Conference: General Council Discussion on Mandated Negotiations and the Built-In Agenda. Communication from the United States", WT/GC/W/115, 19 November 1998, WTO, Geneva. URL: http://www.wto.org/ddf/ep/C4/C4652e.doc * UPOV (1998). "The Fifteenth Extraordinary Session of the Council." Plant Variety Protection, No. 84, Union for the Protection of New Varieties of Plants, Geneva, April. * van Wijk, Jeroen (1996). "How does stronger protection of intellectual property rights affect seed supply? Early evidence of impact." Natural Resource Perspective, Number 13, November 1996. Overseas Development Institute, London. URL: http://www.oneworld.org/odi/nrp/13.html
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TRIPS versus biodiversity: What to do with the 1999 review of Article 27.3(b)
by GRAIN | 25 May 1999Author: GRAIN
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