TITLE: European Union to Lose US$79 Billion if New U.N. Regulatory System Created AUTHOR: Pacific Research Institute for Public Policy PUBLICATION: press release via PR Newswire DATE: 25 May 2005 URL: http://www.mysan.de/article113706.html NOTE: This follows right on the heels of a report from the Australian APEC Study Centre, flagged earlier on BIO-IPR, which also tried to argue that private contracts and unfettered property rights defined by national law are better than putting conditions on the grant of patents over biodiversity and traditional knowledge under international law. PRI News Release | 25 May 2005 EUROPEAN UNION TO LOSE US$79 BILLION IF NEW U.N. REGULATORY SYSTEM CREATED A newly released study by the California-based Pacific Research Institute for Public Policy (PRI) reveals startling economic impacts for the European Union if a proposed international regime to govern access- and benefit-sharing (ABS) of genetic resources takes effect. The creation of a patent-based ABS regime will be discussed by world diplomats and policy experts in Geneva on June 6-10 at a meeting of the World Intellectual Property Organization (WIPO). BRUSSELS, Belgium, May 25, PRNewswire -- A newly released study by the California-based Pacific Research Institute for Public Policy (PRI) reveals startling economic impacts for the European Union if a proposed international regime to govern access- and benefit-sharing (ABS) of genetic resources takes effect. The creation of a patent-based ABS regime will be discussed by world diplomats and policy experts in Geneva on June 6-10 at a meeting of the World Intellectual Property Organization (WIPO). "Analytically, the new ABS regime would be equivalent to a long-run tax on biotechnological and pharmaceutical research," said study co-author Benjamin Zycher, a Senior Fellow at PRI. "Naturally, such a measure would have significant economic consequences." In the EU alone, Zycher's findings predict a loss of US$79 billion. The ABS regime has been proposed by representatives of nations in the 17-member Like Minded Mega-diverse Countries (LMMC) who argue that the international patent system needs to be further regulated to prevent biopiracy and to reach the goals of the U.N. Convention on Biological Diversity (CBD), adopted by the 1992 Earth Summit in Rio de Janeiro. The 17 countries, led by Brazil, would also like to see further redistribution of the profits created when genetic resources are turned into modern medicine by pharmaceutical and biotech companies located primarily in the Western world. "The mega-diverse countries claim that patent regulations are necessary to protect the world's biodiversity," said Zycher. "The fact is that the new ABS regime would undermine the current contract-based system that will protect research and development much more successfully." Under current international law, governed by the WIPO and the World Trade Organization (WTO), biotech companies are free to make contracts with individual countries, obtaining the right to use genetic resources from such biodiverse areas as the Brazilian rain forest, and to use these resources in their product development. The LMMC proposal would limit the freedom to make contracts by making it more difficult to protect patents and by imposing unpredictable obligations on biotech companies to share their future profits. The PRI study predicts that the proposed ABS regime will have significant economic impacts on countries in the developed world. Using a careful methodology that transforms biotechnological and pharmaceutical research and development into capital stocks, the detailed study finds that the cumulative loss to the EU15 countries would be US$79 billion between now and year 2025. By comparison the United States stands to lose much less -- US$21.6 billion. "The bottom line is that the best way to protect the world's biodiversity is to give research-based biotech companies negotiated property rights to invest in bio-diverse areas," said the study's other co-author Timothy A. Wolfe. "Without property rights and contracts enforced under law, the Brazilian rain forest will be left in the hands of lumberjacks and farmers who need more open land for their cattle." ABOUT PRI For 26 years, the Pacific Research Institute for Public Policy (PRI) has championed freedom, opportunity, and personal responsibility by advancing free-market policy solutions. PRI is a non-profit, non-partisan educational organization based in San Francisco, California. Web site: http://www.pacificresearch.org GOING FURTHER (compiled by GRAIN) GRAIN, Re-situating the benefits from biodiversity", Seedling, May 2005. http://www.grain.org/seedling/?id=327 Alan Oxley, "Developing effective approaches to access to genetic resources", APEC Study Centre, Monash University, Melbourne, February 2005, 17 pp. http://www.apec.org.au/docs/oxley2005.pdf News-Medical.Net, "Patent-based regulation of genetic resources could undermine health in developing countries", 14 February 2005. http://www.news-medical.net/?id=7758