By David Cronin for Intellectual Property Watch
With America’s political elite fixated on the race for the White House, the likelihood that the world’s most powerful country will make much progress during 2008 in free trade negotiations with other nations appears slim.
Across the Atlantic, however, European Union officials have indicated they will be vigorous in insisting that high standards for protecting intellectual property are upheld as universally as possible. Numerous other bilateral talks are ongoing around the world as well. And attention may be drawn from the longstanding trade negotiations at the World Trade Organization.
Peter Mandelson, the European commissioner for trade, has identified IP rights as a core concern for firms from the continent who do business abroad. “For Europe, innovation and invention and creativity are the crucial added value in the things we make and present to the rest of the world,” he said during a recent visit to China, adding that IP protection “is now more central to Europe’s drive for competitiveness than it has ever been.”
The idea that the EU’s executive, the European Commission, should mount a campaign to insist that patents held by western firms are respected throughout the world was contained in its 2006 strategy paper, Global Europe.
Brussels officials handling negotiations aimed at deepening economic links with foreign countries have proposed that provisions on IP be inserted into any eventual free trade accords that are signed.
For much of last year, one of the principal objectives of the Commission’s trade department was to secure Economic Partnership Agreements (EPAs) with nearly 80 countries in Africa, the Caribbean and Pacific.
But in most cases an end-of-2007 deadline for achieving comprehensive agreements was missed. EPAs were signed with 35 countries, most of which were labelled ‘interim’ and were restricted to trade in goods. Talks aimed at expanding these free trade deals to such matters as services liberalisation, competition, government procurement and intellectual property will continue this year.
The only so-called full EPA concluded in December was with 15 islands in the Caribbean.
It stated that both the EU and the Caribbean are determined to ensure increased protection of IP rights “appropriate to the levels of development” of each side. Both committed themselves, too, to “an adequate and effective implementation of the international treaties dealing with intellectual property”.
The agreement also says that the Caribbean countries shall “consider acceding” to the International Convention for Protection of New Varieties of Plants, which is known by the acronym UPOV. Dating from 1961, that accord allows for a system akin to patents to be applied to varieties of seeds that are considered as discoveries or inventions. While small farmers had an automatic right under the original agreement to use seed varieties – even those subject to such a patent – on their own land, that right was scrapped when UPOV was modified in 1991.
Dalindyebo Shabalala from the Center for International Environmental Law in Geneva said it is significant that the Caribbean countries have only agreed to consider joining UPOV, as opposed to making a more binding commitment to do so.
Nonetheless, he argued that it would be wrong if EU officials now put pressure on countries from Africa and the Pacific to accept free trade agreements modelled on the one signed by the Caribbean.
He also said he was perturbed by indications that the emphasis of the EU’s trade activities this year will be placed more on placating large firms than on how trade can be used as an instrument for alleviating poverty.
“Global Europe is not a development strategy; it is a mercantilist strategy,” he said. “When it comes to intellectual property enforcement, it is always about protecting European markets from competition. Global Europe offers an inappropriate framework if we talk about Europe’s relationship with developing countries. And they do include China, India, Brazil and South Africa. While they may be beginning to compete, their people still continue to live in poverty and often in conditions that Europeans can barely comprehend.”
Last year Mandelson gave a commitment that the EPAs would contain no provisions leading to pharmaceutical patents being enforced in a way that hampered the poor’s access to medicines.
But anti-poverty campaigners are concerned that free trade deals with countries outside the African, Caribbean and Pacific bloc may have clauses that could prove damaging to public health.
One major bone of contention that has arisen in talks between South Korea and the EU concerns the Union’s efforts to have rules relating to ‘data exclusivity’ incorporated in a planned free trade agreement between the two sides. Data exclusivity covers the length of time which information used to make a medicine under patent cannot be used by manufacturers of generic drugs.
While the EU had sought that the Korean authorities extend their current period of data exclusivity for new drugs from six to 10 years, that proposal was rejected by the Seoul government.
Still, the Commission said on 1 February that it is close to clinching a deal with Korea on the IP aspects of this agreement.
It remains unclear, however, whether there will be sufficient progress on other topics under discussion for the EU to sign an agreement with Korea this year. Hopes by the Commission to conclude one by the end of 2007 were not realised.
The EU is also involved in trade liberalisation talks with India and the countries of Central America. And the Commission has indicated that it wishes to revive talks with the South American Common Market (Mercosur) that bands together Brazil, Argentina, Uruguay and Paraguay. Although talks with Mercosur opened in 1999, they have been stalled for some time.
Other free trade negotiations are ongoing around the world without the EU or US, involving countries such as Japan, Australia, Canada, India, China, Thailand and those in Southeast Asia.
In addition, developed countries have launched negotiations among themselves for a global Anti-Counterfeiting Trade Agreement (ACTA), which are expected to advance this year.
Significantly, the focus of EU officials’ attention could be more on key bilateral or regional trade negotiations this year, rather than the multilateral talks being organised by the World Trade Organisation.
Efforts Continue at WTO
Pascal Lamy, the WTO’s secretary-general, said on 5 February that he was hoping for a breakthrough in the troubled Doha Round of global trade liberalisation talks shortly. “We all know what is happening in the world economy right now,” he said. “I think we are also aware of the need for a successful outcome to the round by the end of this year. The coming weeks will be an extremely intensive period for all of us, but I believe the potential results of the round, and the benefit they can provide across the membership, are worth fighting for.”
Seasoned observers of international trade politics suggest, though, that major progress for Doha is essentially impossible in a US election year.
If negotiations advance, there are IP issues on the table, including an EU proposal to raise the level of trade protection for geographical indications (distinctive products named for places) on a variety of products to the level already enjoyed by wines and spirits, and a separate developing country proposal to require the disclosure of the origin of biological resources and traditional knowledge in patent applications. These have been discussed in the Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which also has seen increased efforts by developed countries to raise IP enforcement in the council.
Also at the WTO, dispute settlement cases on IP issues will continue. The WTO launched an investigation on 27 November into allegations that China is unfairly limiting the flow of copyrighted material from the United States into the country. A panel also was formed on 25 September for a separate IP-related case filed by the US alleging that China has failed to provide “criminal procedures and penalties to be applied in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale that fail to meet certain thresholds.”
Alexandra Strickner, a Vienna-based campaigner with the Institute for Agricultural and Trade Policy, says that the emphasis on bilateral deals is not helpful for developing countries. “It is much harder for developing countries to defend themselves in bilateral or regional negotiations with a big power bloc like the EU,” she said. “In the WTO, they can form themselves into bigger coalitions.”
She urged particular vigilance in monitoring the EU’s talks with Central America, given the high level of biodiversity there. Inserting IP clauses into an agreement with Central America could lead to western firms asserting their control over seed varieties or other natural resources there, she warned.
Marc Maes from the Belgian anti-poverty group 11.11.11 said that patents can be used by multinational firms to try to control natural resources held in developing countries. “Ninety-five percent of patents are in the North, whereas 90 percent of biodiversity is in the South,” he added.
Although the EU is not currently eyeing a free trade deal with China, Mandelson will almost certainly remain in regular contact with Beijing throughout the year.
He has been critical of the Beijing authorities for not clamping down on the widespread counterfeiting of goods for which European firms hold patents. In 2006, European companies lost one dollar out of every five they made in China because of what Mandelson described as the “theft” of IP rights.
Since 2003, the EU and China have been engaging in a formal dialogue on IP issues. While Mandelson said in late 2007 that Brussels officials have been patient throughout this dialogue, “the return we have received on that patience has been frankly too low.”
Ilias Konteas, a specialist on IP issues with the employers’ lobby group Business Europe, said it might be necessary for the EU to begin proceedings against China at WTO level. “The dialogue with China has been taking place for some time now,” he added. “We are at the stage where we need to see whether or not it is producing concrete results. If nothing is coming out of this process, then we have to re-evaluate it.”
The EU’s efforts to have IP provisions included in free trade agreements mirrors the approach that the Bush administration has been taking in the US.
In December, the US Congress gave its blessing to a new agreement with Peru. Its approval of accords negotiated with Colombia, Panama and South Korea has also been sought. But analysts predict these probably will not get the necessary backing from Congress in a hurry because lawmakers have been distracted by the presidential race.
The Democratic Party has indicated it may make some changes to trade policy if it wins control of the White House this November. Hillary Clinton, who is battling with her fellow Senator Barack Obama to be the Democrats’ presidential nominee, has stated that she would be prepared to revise free trade agreements already signed by the US. These would include the North American Free Trade Agreement which her husband Bill negotiated with Canada and Mexico.
But Aziz Choudry, an editor of bilaterals.org, a website critical of US trade policy, said it would be a mistake to believe a Democratic president will pursue a radically different agenda from Republican George W. Bush.
“The flavours might be a little different but it is highly unlikely that the fundamentals of trade policy will change substantially,” Choudry added. “The Democratic Party has very close connections with corporations in the US. They are not going to do anything that is going to rock the boat and upset major trans-national corporations.”
William New contributed to this report.
David Cronin may be reached at info@ip-watch.ch.