Statement on People’s Concerns and WTO Issues

(A Workshop on WTO Arrangements and People’s Concerns was organised in New Delhi recently. The workshop was organised by the National Working Group on Patent Laws in the background of the forthcoming meeting at Seattle, where a review of different aspects of the WTO is to be conducted. The meeting was attended by eminent national and international experts. A statement drawn up at the conclusion of the workshop is reproduced.)

THE Workshop discussed at length peoples concerns related to issues before the WTO. It noted that in the last decade international trade agreements have served to promote the widening of the socio-economic and technological gaps between the developed and developing nations. While much of the discussions focused on specific areas, it was also felt that a central question that needs to be addressed pertains to whether the current historical circumstances permit developing countries to work within the global framework. The need to think of an alternative framework with greater self reliance was underlined. It was also emphasised that people’s concerns need to address the issue of equity and necessary policy options. In this background it was felt that a political approach was also necessary, that took into account the historical background of the present processes while seeking solutions, and not mere technocratic or legal approaches. Only such a complementary approach can help formulate a coherent pro-poor alternative where growth, human development and equity are not trade- offs.

Detailed below are a summary of discussions on specific areas.

Trade Related Intellectual Property Rights (TRIPS)

The TRIPS Agreement is an unequal Treaty. It is not only a uniquely new element in the rules governing trade, it also makes for enormous difficulties for developing countries in their quest for economic development. The WTO purports in theory to foster competition, yet TRIPS confers monopoly power to patentees in practice mostly large MNCs. TRIPS, as the agreement stands today, is particularly onerous impinging on the well-being of millions of poor people in developing countries. The high prices of life saving drugs following TRIPS and the patenting of life forms (including seed varieties) are two very obvious illustrations.

The dissemination of technology – the balancing of rights and obligations is explicitly stated as the objectives of TRIPS even as inventiveness is to be rewarded. In practice, however, patentees have been given only rights without any obligation. This obvious anomaly needs to be corrected.

Specifically, a review of TRIPS needs to address the following issues:

No extension of patent period be allowed beyond twenty years, in the guise of dosage or usage forms.

Actual working of a Patent should be taken to mean manufacture of the product in the country where it is registered. Importation cannot be taken to be equivalent to working of a patent.

Strong compulsory licensing provisions should be clearly defined and should include: 1) technology transfer, 2) clear terms (viz. 4-8per cent Royalty and response within 100-150 days), 3) measures to prevent abuse of monopoly, to ensure adequate availability at affordable prices.

Provision for parallel imports should be explicitly allowed, as such imports do not constitute a violation of Patent Rights.

Provision of reversal of burden of proof for infringement of a Patent is unacceptable.

R&D activities should be allowed to be taken up by other entities while a Product is still under Patent protection.

No products which are under public domain, prior to 1/1/2000 should be allowed to be conferred Patent protection.

No Patents to be allowed on life forms (including microrganisms or biological processes involved in them). A small change (through a single gene) into a variety produced from a number of races and over decades, cannot be scientifically and ethically justified for patenting.

The conservation of the genetic resources of all countries, and the rights of the local people to these resources should remain a priority concern of governments of all countries.

The traditional privilege enjoyed by farmers to save and exchange seeds for self-consumption should not be infringed upon.

The sui generis system on Plant Varieties should be appropriate to the needs and context of the particular member country, and should not be take to mean an uniform system, viz., on the lines of UPOV 1991 as interpreted by the US. The African countries have taken a correct position in collectively demanding for a review of the agreement on agriculture. They have sought a review on both the issue of what constitutes sui generis and the issue of exclusion of life forms from the scope of patentability. Similar collective stands need to be worked out by other developing countries keeping their interests in mind.

Protection of biodiversity and the protection of rights of communities over varieties evolved by them, in the developing countries, is not only an issue of protection of traditional resources but is often closely linked to the issue of food security, and hence needs to be safeguarded. The TRIPS Agreement needs to be made consistent with the UN Convention on Biodiversity (CBD), in the areas of biological resources and traditional knowledge systems.

Traditional knowledge should be protected from any form of patenting on the premise that it constitutes prior art and knowledge in public domain. Developing countries would require to take steps to defend such knowledge through proactive measures like codification of traditional knowledge, broader definition of the clause of geographical indications, etc.

Additionally Developing countries need to :

Take steps to strengthen existing anti-monopoly and anti- restrictive practices legislations, to prevent creation of monopolies through Patents.

Compute costs of possible non-compliance with WTO requirements, in order to be ready to counter actions that their stands on different issues may bring about.

Agriculture and Food Security

Obsessive preoccupation with capital accumulation as the driving force in economic progress, to the neglect of societal development, has created dualities in the system and wide gaps between rural and urban levels of living, as well as further polarization within these areas. The basic strategy in agricultural development should be one of decentralized production, implying that a breakthrough in production should be attempted in all regions, and not in specific products. This alone would result in food security to the poor. Any international agreement which impinges on food security, will have serious socio- economic and political consequences.

Any discipline (whether on subsidies, market access, etc.) should be waived whenever this prevents a country from taking adequate measures to prevent a worsening of food security, both in terms of availability and access.

No discipline (subsidies, market access, etc.) should apply to that part of output which does not appear in the market, i.e., that which is self-consumed or exchanged.

New Issues

Developing countries need to insist that no new issues should be discussed without a review of the existing arrangements, in terms of the stated objectives and the actual impact of implementation of these arrangements on the conditions of the people, or discernible trends thereof. Some of the new areas proposed and the implications include:

Investment

The Multilateral Investment Agreement (MIA) should be opposed, because it involves:

a) no control by host country governments over direction, quantity or composition of FDI (Foreign Direct Investment);

b) no requirement in terms of technology dissemination or input use for FDI;

c) possible effective dilution of domestic ant-trust laws.

This would imply:

a) further loss of bargaining power of workers vis-a-vis MNCs;

b) no access to technology important for socially desirable investment;

c) negative effect on the Balance of Payments position;

d) no advantages in terms of employment increase or improvement in aggregate social productivity.

Instead, there should be a collective demand for an agreement on regulation of MNCs and FDI, that clarifies duties and obligations of investors in host countries.

Competition Policies

The thrust of proposed changes in this area relate to allowing greater freedom to foreign entities through conferring of MFN (Most Favoured Nation) status/ National treatment. Ironically this is being proposed when there is a move towards greater creation of monopolies through large-scale mergers and acquisitions. Jumping into a situation where foreign entities with their enormous economic and technological clout, will be free to compete on level terms with domestic companies is unacceptable and detrimental to the interests of developing countries.

Government Procurement

It has been proposed that there should be stipulations under WTO that call for greater transparency as regards government purchases, currently out of the purview of WTO arrangements. Such a move would compromise the ability of sovereign governments to take decisions in this regard, and the move should be seen as an attempt to gain access to a crucial segment of the market in developing countries under the guise of transparency.

Electronic Commerce

It is being proposed that any trade that is wholly conducted through the electronic media, in all its components including delivery, should be exempt from all forms of duties and taxes. At present this would apply to trade in films, music, engineering designs, etc. This is an emerging area of trade with potential for large growth rates. Waiving of taxes on such transactions would amount to subsidising rich consumers, and also implies significant revenue losses for developing countries. Moreover the proposal does not provide any concessions, in return, to developing countries and should hence be considered unacceptable.

Social Clause

There is a proposal to include Social Clause as a part of WTO arrangements. It implies that countries that do not have certain minimum labour standards in specific areas could attract sanctions in the form of non-tariff import barriers. The driving force behind the introduction of this clause is not a genuine concern for the conditions of workers in developing countries, but a perceived threat of competition by mnufactures from these countries, like in the area of textiles. While conditions of labour in any country should be an abiding concern, the inclusion of Social Clause in the WTO and the attendant threat of sanctions does not in any way constitute an advance in the fight for better working condition for labour. On the contrary, its implementation may actually compromise the collective bargaining power of labour, if sanctions in key sectors are enforced.