WTO: 2011 NEWS ITEMS
WTO PUBLIC FORUM: 19—21 SEPTEMBER 2011
Director-General Pascal Lamy, at the opening session of the WTO Public Forum 2011 on 19 September, noted the background for this year’s discussions and outlined the important role of the Forum in tackling the challenges that lie ahead. Sustainability, energy and food security were among the issues discussed on the first day.
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MORE COMPREHENSIVE ACCOUNTS OF THE SESSIONS WILL BE PUBLISHED ON THE PUBLIC FORUM PAGES SOON AFTER THE EVENT.
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“The world is going through a turbulent period,” said Mr Lamy in his opening address. “We are witnessing a food crisis. The economies in many parts of the world are not growing at a pace sufficient to achieve the fiscal consolidation needed after the measures taken during the financial crisis. In other parts of the world the pace of growth is raising concerns about its ecological and social sustainability. Unemployment remains far too high and its painful consequences are fuelling isolationist tendencies. We are seeing regime changes in many parts of the Arab world … A world in need of a compass. A world in need of more and better global co-operation.”
He said that the WTO “has successfully helped countries navigate during the worst of the recent economic crisis,” but “we need to build a stronger global trading system to face the challenge ahead of us … and this is where this Public Forum has a crucial role to play.”Before inviting President Laura Chinchilla Miranda of Costa Rica to take the floor, the Director-General noted that her country has demonstrated how to use trade opening to contribute positively to development — and that it is also aiming to become the world’s first carbon-neutral country.
Inaugural speech: Opening address by President Laura Chinchilla Miranda of Costa Rica
In her opening address, President Chinchilla expressed full support to free trade “which has proven to be a powerful tool for economic growth and poverty reduction,” adding that her country “bears testimony to the potential benefits of opening up trade.”
The President said that the most urgent task facing the international community is the Doha Round. She said that “the least we can provide after a decade of discussions is flexibility,” and warned that “without the Doha Round, many of us will lose, particularly countries with small markets and with little capacity to export and attract investment”.
Session 2: Seeking Answers to Global Trade Challenges
Sustainability, energy and food security issues were at the heart of the discussion. Also discussed were the Doha Round impasse and WTO reforms.
President Mahamadou Issoufou of Niger: “We’re living in shocking inequalities, with many people in developing countries living in poverty.” He drew a parallel with Ford automobile production, suggesting that just as Henry Ford wanted his employees to be able to afford his company’s cars, higher incomes in the poorest countries would help growth in the North. He said that often in the South, they have the sentiment that industrialized countries would stop trade opening if it is not in favour of their comparative advantage. He blamed speculation in derivatives markets for increased grain prices, which threaten food security in the whole Sahel Region. Noting that his country faced high energy and transport costs, President Issoufou appealed for the WTO to help countries like Niger through the Aid for Trade programme.
World Wildlife Fund (WWF) Director-General James Leape: Mr Leape said that the world’s current growth path would use up more resources than exist on the planet. He said: “we’re still acting as if we have a planet and half to support us” and added “we’ll need to produce as much food in the next 40 years as in the last 800.” The only path to sustainable growth is a path that is ecologically sustainable, he stressed. Sustainability, therefore, is more than just another special interest to be addressed in the trade regime. There’s a strong role for the WTO to ensure that perverse subsidies are reduced. More broadly, beyond combating protectionism, which too often has protected Northern interests against Southern ones, there’s a role for the WTO to support the pursuit of sustainable development.
International Food Policy Research Institute (IFPRI) Director Dr Maximo Torero: Dr Torero stressed that trade has an important role in ensuring access to sufficient food in the decades to come. He noted the supply of key food is quite concentrated in few countries so export restrictions are serious threats and markets can quickly become vulnerable to volatility. On speculation and food practices, Dr Torero said that some level of speculation is good, since it provides liquidity to the markets. “Excessive speculation,” however, can be dangerous, since it can exacerbate volatility, with consequences for poor people. Defining what constitutes ‘excessive’, however, is complicated.
WTO Director-General Pascal Lamy: On important and long term issues such as food security, said Mr Lamy, we need to activate the transmission belt between offer and demand that is trade — thus the need to move on in the Doha Round. He said that ending the impasse in the negotiations would enable the WTO to tackle other challenges — and it would also answer expectations by developing countries that the multilateral trading system can respond to their hopes for an end to subsidy-driven unfair competition for their agricultural products. He suggested that the Ministerial Conference scheduled for December would provide an opportunity for governments to find a way forward on Doha, possibly on issue-specific agreements that respond to the needs of developing countries. He noted that the past 20 years had seen considerable convergence between the trade and environmental communities, illustrated, for instance, by the evolution of WTO jurisprudence. On the “Made in the World” initiative, he said negotiators tend to still refer to the realities of the international trade of 20 years ago. He said global value chains have positive effects on development; small countries that would have been unable to produce automobiles of their own can still competitively make auto parts as part of a chain.
The debate was rich on a spectrum of issues raised by panellists. In response to questions about trade and exchange rate fluctuations, both Niger’s President and Mr Lamy noted that the issue was simpler under the pre-1970s international regime of fixed exchange rates. Mr Lamy stressed that the WTO was not the forum for addressing exchange rate levels — the IMF and the Financial Stability Forum exist for that. Nevertheless, he observed that there was no longer a taboo at the WTO on discussing the trade implications of exchange rate movements — in fact, a WTO working group (the Working Group on Trade, Debt, and Finance) has started a discussion on the issue.
Asked whether the institutional design of the WTO, with its consensus focus and veto for every member, was to blame for the Doha impasse, Mr Lamy noted that the source of disagreement was an old-fashioned difference between two groups of countries about how much to open their markets. He said that consensus would remain as a core principle of the WTO, not least because finding an alternative would be harder than Doha. Procedural issues, such as whether to retain the single undertaking or to authorise plurilateral agreements, would need to be determined.
Session 3: Made in the World: Facts and Implications for Trade
The rise of the global manufacturing model has important implications for the relationship between trade and development. This session provided insights from Europe in terms of trade performance and job creation, the experience of Sweden’s global value chains, and also looked at the case of Costa Rica.
The session was opened and moderated by Prof. Will Milberg, who pointed out that global value chains are a very important aspect of international trade, creating a more liberal environment for global trade. Value chain implications on trade have become the main drivers of trade.
Mr Lucien Cernat of the European Commission described the European Union’s experience and highlighted the importance of the Made in the World initiative. He said that both trade and job creation have to be supported by the people.
Mr Henrik Isakson of Sweden’s National Board of Trade stressed that Swedish exports are not only “Made in Sweden”. Half of Sweden’s GDP is generated by exports. He said that “made in …” labels are mostly misleading. He suggested that countries should focus more on import promotion rather than export promotion.
Costa Rica’s Minister of Foreign Trade Anabel Gonzalez presented the case of her country in global value chains. She noted that Costa Rica has become an active participant in global value chains thanks to strategic vision, the business environment, a solid export platform, an educated work force and its privileged geographical location close to the US market. She pointed out that the next step is to diversify, strengthen and upgrade global value chains in order to take advantage of key opportunities such us increasing the link between Asia and Latin America, and expanding global value chains to other areas of production and to the offshoring of services.
Mr Hubert Escaith of the WTO noted the importance of services in terms of trade. He said that preferential trade agreements harmonize regulations and global value chains. Bilateral negotiations cannot be in competition with multilateral negotiations. Production and employment are dependent on developing countries. Finally, he highlighted the importance of having global policies and finding a global solution for an interdependent world.Answering questions from the audience, Minister Anabel Gonzalez pointed out that in Central America, regional integration would be needed. Preferential trade agreements could provide the foundations for an integrated system. Mr Escaith said that Made in the World is not a new concept, but in recent years it has become increasingly relevant in terms of jobs and political implications. Finally Mr Cernat invited policy makers and researchers to get involved in this initiative.
Session 4: Lessons Learned from Regional and Bilateral FTAs — Assessing Economic Impacts and whether Stronger Rules Stimulate Innovation
The session discussed the intellectual property rights’ (IPR) provisions of free trade agreements (FTAs) and their impact on innovation. In general, it was agreed that a positive association existed, and that IPRs were also beneficial to trade. Strong IP rules would attract innovative businesses, which in turn, would enhance trade performances.
The first presentation focused on Latin America. It put forward that innovation was key to development, to generate sustainable comparative advantage, as well as a better quality of life. Thus, IPRs are of crucial importance as they are one of the means to capture the intangible value of innovation. Key features of IP provisions in Latin American FTAs were described. The main factors playing a role for innovation were considered to be the following: a strong research base; a legal and policy framework; a culture of innovation; technological transfer services; and business development services.
The second presentation was based on a study led by Alexander Koff, entitled: “Study on the Economic Impact of TRIPS (trade-related intellectual property rights) + Free Trade Agreements”. This study focuses on TRIPS+ provisions of FTAs signed by the United States and finds that greater IPR protection has a positive impact on trade, even for developing countries involved in those FTAs. From the public, a representative of Jordan supported this conclusion, asserting that, contrary to what he thought in the past, his country’s pharmaceutical industry had benefited a lot from the WTO TRIPS agreement. In his recommendations, Mr Koff specified that it was important to distinguish between trademark protection and patents.
The speakers also based their argumentation on success stories of different countries (such as Brazil, Peru, Chile, Mexico or Jordan) to emphasize the benefits of IPRs on innovation and trade. They also pointed to the lack of resources in developing countries. Consequently, they insisted both on the need for technical assistance and best practice schemes to help developing countries benefit from IPRs.
The presentations generally emphasized that IP was a means to favour innovation and trade, but not an end in itself.
Session 5: A WTO Framework Agreement for Sustainable Energy
The session focused on the dialogue between energy and trade policy, as well as the prospective receptiveness of WTO rules for a framework agreement on energy, converging on the inappropriateness of the existing setting to foster the debate and move towards renewable energy.
Nitya Nanda, from the Energy and Resources Institute (TERI), noted that global energy governance is hindered by gaps in regulation and the resistance from developing countries, especially towards accession to the Energy Charter Treaty, due to the standing granted to private parties in its dispute resolution system. In that regard, he noted particularly the comparative advantage of the WTO dispute settlement system. Conversely, the absence of some important energy supplying countries among the WTO membership may prevent bringing the issues to the organization. He also argued that besides modern energies, transitional types of energy would also benefit from regulation, since transition will not happen from one day to the next.
Jens Alsbrik, Market Access Manager from VESTAS wind systems, noted that tariff barriers remain a big although not the dominant challenge for the wind industry, local-content requirements being the top concern. In spite of the industry’s existing excess capacity, these barriers prevent it from operating at full capacity, impeding economies of scale and reduction of the costs of wind energy. In order to achieve trade liberalization in energy, he suggested that instead of the Doha Round, an all-encompassing and cross-industry initiative, a sectorial approach such as the one used in the Information Technology Agreement (ITA) 1996 would be more promising for green energy.
Emmanuel Guérin, Director of the Energy and Climate Programme of IDDRI, discussed the ambivalent role trade can perform in promoting green energy, depending on whether trade and climate policies are coordinated. He distinguished demand-pull and technology-push policies, showing how countries distributed policy differently between both models and its effectiveness in achieving desired goals.
Ricardo Melendez-Ortiz, Chief Executive of ICTSD, touched upon the problem of access to modern forms of energy and the importance of trade in providing it. In order to scale up the use of renewable energy, he said that policies would need to foster green technology and increase its manufacturing capacity, also by means of subsidies, technical standards, local-content requirements, technology transfer. Finally, he commented on the different possibilities for a framework agreement for energy proposed by the ICTSD, following either an ITA type or GTA type agreement within the WTO framework, or a plurilateral agreement outside the WTO framework, with different consequences on membership and benefit sharing.
The moderator concluded the session by stressing the convergence of the speakers on the fact that the actual framework does not provide sufficient support to the move towards renewable energy. Also, she stressed that countries need a forum to discuss and converge to clean energy, where every country will engage without the fear of trade sanctions.
Session 6: Building coherent global governance for food security
Panellists in this session focused on the G-20’s Action Plan, including the recommendation to strengthen international policy coordination for food security, highlighting new and evolving approaches for improving global governance of food security.
The French representative to the WTO, Francois Riegert, gave a thorough overview of the four main areas of work which were agreed by the G-20: agricultural production in the long run, transparency and information in international markets, international coordination and risk management and financial markets. He said that G-20 ministers had committed to prohibit export barriers for humanitarian purchases by the World Food Programme (WFP) and that the goal was to put forward a specific resolution at the WTO Ministerial Conference in December 2011.
Carmel Cahill from the OECD explained the Agriculture Market Information System (AMIS), which includes a Secretariat, a rapid response team and a technical group tasked with providing information on short-term market forecasts. In Mr Cahill’s opinion, the evidence in front of the inter-agency group indicated that biofuel subsidies and mandates were contributing to food price volatility and should be removed. The inter-agency group had looked at, among other issues, export restrictions recommending that more work was needed to define the circumstances in which export restrictions could be used.
Kostas Stamoulis of the Food and Agriculture Organization (FAO) stressed that in order for food security strategies to be successful, there must be ownership at the national level. At the FAO, the Committee on Food Security plays an important role in improving coherence in this area as it addresses the coordination gap, the knowledge gap, the policy gap and the accountability gap.Lauren Landis of the UN World Food Programme (WFP) commented on the evolution that the WFP has undergone in order to be better equipped to respond to food emergencies in the context of food price volatility. He stressed the importance of finding agreement on a resolution to prohibit export barriers for humanitarian purchases by the WFP at the WTO Ministerial Conference in December 2011.
Session 7: State aid, subsidies and competition policy: What future role for the WTO?
The session discussed the availability of global provisions addressing competition policy, state-owned enterprises and subsidies, and the scope for multilateral rules regulating them. The panellists agreed that more rules were needed. They also recognized that these issues can be better tackled multilaterally rather than at the bilateral level and that the WTO would be the ideal forum.
Moderated by Mr Reinhard Quick, Vice-Chairman of BUSINESSEUROPE, the session focussed on multilateral and national rules on subsidies, state-owned enterprises and competition policies.
It was noted that the WTO does have some rules on trade-distorting subsidies. However, in the face of globalization and a changing international scenario, more challenges are emerging that might require stronger disciplines and institutions. To create new and more effective rules, a transparency exercise is also important. Full and timely notification of subsidies would lead to better information and better understanding of the effects of subsidies on the market and, thus, to more constructive discussions towards a multilateral solution. It was noted that while most free trade agreements include some subsidies provisions, they never go beyond what is already in the WTO agreements. This is testament to the fact that multilateral action on these issues cannot be substituted by bilateral agreements. The WTO is the ideal forum where this issue can be successfully addressed and resolved because it is the only place where rules are binding.
The panellists identified the difficulty of finding a common definition of what constitutes a state-owned enterprise and the extent of its market-distorting effects. In the WTO, there had been poor interest in state-owned enterprises until China and other emerging countries with a high number of state-owned enterprises started increasing their share of the international market. Recently, the issue has enjoyed more visibility and talks of competitive neutrality have been raised in the OECD and in other fora. State trading enterprises can be important for developing countries, especially in the management of natural resources. Although some work has been done in agriculture negotiations, agreement on a definition of state-owned enterprises remains elusive.
Competition policy was originally part of the so called “Singapore issues” but it was subsequently dropped. However, as private companies are operating globally, the need for multilateral rules is becoming more relevant. The lagging behind of global provisions on competition policies can be attributed to the fact that most developing countries until recently had little experience with competition policy drafting and implementation. The vacuum has been filled by national, private and other authorities. Although some bilateral agreements include competition policies, as in the case of subsidies, these provisions do not have real teeth. The Chinese representative said that if the WTO was able to accommodate the concerns of all WTO members (especially those with less experience in the matter), then it would be possible to have a fruitful discussion on competition policy and reach a multilateral agreement.
In conclusion, there is a need for more and better rules to deal with the complexity of globalization. Global problems require global solutions. One of the panellists wished for the Ministerial Conference in December to come out with guidelines on these issues.
Session 8: Averting the coming treatment crisis in a changing intellectual property landscape
This session was organized by Medicines Patent Pool and moderated by Mr Antony Taubman, Director of Intellectual Property Division of WTO. The four panellists were: Ms Michelle Childs, Director of Policy and Advocacy, MSF; Professor Carlos Correa, University of Buenos Aires; Mr Nelson Otwoma, National Coordinator/CEO, National Empowerment Network of People Living with HIV/AIDS in Kenya; and Ms Ellen T Hoen, Executive Director, Medicines Patent Pool.
Ms Childs, Ms Hoen and Mr Otwoma provided an overview of the coming treatment crisis faced by people living with HIV, especially in low and middle-income countries:
- More people living with HIV in developing countries are not able to receive treatment because of the increasing treatment costs.
- When drug resistance occurs, they need access to newer treatments. However, most of the newest HIV medicines are patented in key generics producing countries, such as India.
- The patenting of new medicines increase treatment costs, and could become unaffordable.
Mr Otwoma highlighted the importance of reaching a compromise between patients and R&D industries. The four panellists discussed the solutions to this coming treatment crisis in the changing intellectual property (IP) landscape. In general, the four panellists agreed that patent/IP systems could act as a barrier to affordable access to medicines and that generics competition does help reduce the prices of medicines based on their past experiences.
Regarding the solutions, Ms Hoen presented the operation of the medicines patent pool while indicating its limitations: the pool operates on a voluntary basis, the pool only focuses on HIV/AIDS medicines, and the pool has certain geographical scope. Professor Correa introduced some other options, including the effective application of patentability standards in developing countries, the use of compulsory licenses and government use, and new innovation mechanisms in pharmaceutical industries.
Mr Peter Beyer from the World Health Organization (WHO) updated the audience about recent developments in the WHO, and cooperation between three international agencies: WTO, WIPO and WHO on the issue of intellectual property and public health. He expressed WHO’s support to the work of the medicines patent pool but since the medicines patent pool is based on voluntary licences, he indicated that it is important for WHO members to look at other options.The Q&A session included a question about the implication of the inclusion of the TRIPS plus provisions in the RTA/FTAs for developing countries. Both Ms Childs and Professor Correa indicated that developing countries should be warned strongly not to accept the TRIPS plus provisions in their FTA negotiations as they were not aware of benefits or empirical evidence. Mr Beyer indicated that the WHO always recommends its members to make an assessment of the impact before accepting the TRIPS plus provisions.
Session 9: A business perspective on the rules-based multilateral trading system and the role of preferential trading agreements (PTAs)
The International Chamber of Commerce panel members, all representing a business perspective or view, made a strong and unanimous plea for a stronger and more robust role for the WTO in monitoring PTAs. PTAs were dubbed by at least one speaker as a “horror” to the private sector. But they are a reality, and a growing one.
Some argued that the 2006 RTA transparency mechanism is a useful but insufficient tool to truly guarantee compliance with existing rules. Therefore, by making more explicit use of GATT Article XIV and GATS Article V, the WTO Secretariat should put its good resources to work and ensure compliance and complementarity between PTAs and multilateral trade rules. WTO rules are the base-line for PTAs, whereas both articles are gatekeepers. On that basis, the WTO Secretariat should develop a best-practice PTA. Only then can and will PTAs support deeper multilateral liberalization.
Business also reiterated that in the end, only multilateral trade rules ensure the necessary transparency and predictability.
Session 10: Seeking Answers to Global Trade Challenges: One-on-one interview with Pascal Lamy
Zeinab Badawi asked WTO Director-General Pascal Lamy what the key obstacles are to the Doha Round, and whether or not the agenda has been “hijacked”. Mr Lamy said that WTO members are realising there is “deadlock” and that there are possibly too many topics in one basket. Mr Lamy identified industrial tariff reduction as the largest obstacle and where the deadlock lies. Furthermore, the term “developing country” has changed, with today’s strong developing countries known as emerging countries. Hence, reciprocity between developing and developed countries is raised; however, there must be a “trade off” as BRIC countries (Brazil, Russia, India and China) will not compromise without getting something in return.
Zeinab Badawi asked whether there is a “level playing field”. Mr Lamy stated that we are much nearer to it than 15 years ago. On the issue of the financial crisis and protectionism, Mr Lamy responded that protectionist temptation is there and will remain so when unemployment is high but trade protectionism does not protect jobs. Regarding trade and monetary policies, Mr Lamy stated that this extends beyond the WTO's mandate, which focuses on trade opening and trade rules. On whether trade allows growth, Mr Lamy stated that trade opening can work for poverty reduction and development, as seen in China, India, etc. Finally asked whether or not he believed in free trade, Pascal Lamy said he believed in “open trade”.
Session 11: Food — from abundant and cheap to scarce and expensive: Is the global trading system coping with change?
This session examined the role of trade in protecting food security and the impact of trade policies and regulations on food price volatility and on the flow of agricultural and food products. Speaking from different perspectives, the panellists shared the view that trade openness can help to ensure food security and moderate price volatility.
Antoine Bouet, from the International Food Policy Research Institute, presented several economic studies showing that protectionism (both import tariffs and export restrictions) in the agricultural sector result in high and volatile food prices. His study shows that in cases of a supply shock, the food price can increase as much as 40 per cent.
Nicholas Kalaitzandonakes, from the Economics and Management of Agrobiotechnology Centre (EMAC), emphasized that innovation and productivity growth is the only solution to food problems. He quoted studies showing that trade disruption resulting from regulatory asynchronicity (i.e. a product approved by an exporting country but not the importing country) is costly.
Alice Chepleting Kalya, from the Agricultural Society of Kenya, spoke about the problems that farmers in Sub-Saharan Africa are facing, including government subsidies, lack of economy of scale, zero tolerance in GM products and low value in the market chain.
Finally, Stuart Harbinson, from Sidley Austin LLP, discussed the role of the WTO in addressing food security. He said that the current Doha mandate is relevant in addressing agriculture concerns.
Session 12: The post-TRIPS World
Chaired by Ahmed Abdel Latif (ICTSD), this session discussed the impact of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement 15 years after its coming into force from a legal, economic and institutional perspective and possible lessons for the future of the international intellectual property (IP) regime.
Prof. Annette Kur (Max-Planck Institute) introduced her textual proposal for TRIPS reform that was developed as one of a number of projects focusing on the post-TRIPS world. Rather than simply deplore any inadequacy of TRIPS or open parallel avenues such as FTAs, this approach proposed to go back to TRIPS and change it into a more balanced regime. By actually providing draft legal language, she hoped to provide a kind of “TRIPS Revision Act” for reference in discussions. Among the examples of amendments she presented was the proposal to flesh out Article 7 (“Objectives”) to cover more than just technology transfer and innovation, and to put more emphasis on Article 8 (“Principles”), ensuring that the burden of proving a violation of TRIPS is on the party alleging such violation. The proposal also introduces a “general balance rule” (proposed Article 8a) and a detailed provision on the interaction between IP and competition rules (Article 8b). She further proposed to exchange the 3-Step-Test rule in Article 13 for mandatory exceptions from protection which should be internationally monitored.
Economist Carsten Fink (WIPO), in assessing evidence and research on the economic impact of TRIPS, said that while most research had focused on “change of domestic law” as an observable consequence of TRIPS, hardly any economist had attempted to study the effect of the “enhanced credibility of having domestic policy bound by international law” which was admittedly much harder to examine for lack of suitable variables. The research looking at changes in domestic regulation as a measure of TRIPS impact typically suffered from the problem of assessing the causality and the relative magnitude of the impact of external and internal developments. Regarding research results on the impact of IP on FDI more generally, studies seemed to bear out that IP did matter, but empirically the effect was relatively small in concrete investment decisions (or the re-location of R&D) where other factors such as size of the economy, infrastructure and the growth potential of a market routinely dwarfed IP as a consideration.
Nandini Kotthapally (India WTO Mission) argued that while WIPO had long been in the background of international IP rule-making in the years since TRIPS — and none of the envisaged substantive treaties on Substantive Patent Law (SPLT), protection for Audio-visual performances and Broadcasting Corporations had seen the light of day — WIPO had re-emerged as a prime IP institution with the adoption of the WIPO Development Agenda in 2007. The Agenda constituted a paradigm shift that had overturned the existing notion of IP as a rich-man’s club and put IP firmly in the context of development. This was now an accepted credo in WIPO and beyond, and was put into concrete practice in the WIPO Committee on IP and Development (CDIP). This, as well as the more promising recent norm-setting activities at WIPO — the treaty proposal for copyright exceptions for libraries and the visually impaired, as well as the work on genetic resources and traditional knowledge — appropriately reflected the shift in the “geography of innovation” in which Asia as a region had replaced the US and Europe as the most active in filing patent applications.
Victoria Whitford (UK Intellectual Property Office) said that the UK IP strove to base its policy — namely that IP should support innovation and growth in a manner that helps poor countries to grow and tackle global challenges — on sound economic evidence, which was reflected in the recent government-commissioned Hargreaves Review on “IP and Growth”. The relatively nuanced results showed that while strong IP protection was associated with higher growth in high-income countries, its positive effect on growth was less strong in middle-income countries where the growth in imitation industries was reduced. In low-income countries, strong IP protection had no — or a negative — effect on growth. While more research was needed for a proper assessment, it was at least clear that in order to be successful, approaches had to be tailored to each country’s needs and had to balance different interests. The UK IP Office believed that the international IP regime must allow creators and inventors to own their works, but must also ensure adequate access to these works. Against this background, she argued that the TRIPS Agreement — with its different transition periods for least developed countries — was already a “tailored approach” and should take into account the economic evidence. It was therefore the UK’s position that the transition period for LDCs expiring on 1 July 2013 should be extended in order to support the growth and development in these countries.
Dr ZHAO Hong (China WTO Mission) said that the enormous legislative effort that China had made before and after joining the WTO to become TRIPS-compliant had benefited China immensely as it had supported the emergence of the concept of rule of law, and had had no negative impact on China’s economic growth. China now had a large IP infrastructure (including 400,000 staff at the Trademark Office and 2,200 dedicated judges at IP tribunals) and recorded an unprecedented increase in registered rights. While some complaints remained, China’s trading partners also recognized its efforts — in particular concerning its recent enforcement efforts. In future, she said that balancing the interest of protection against the maintenance of the public interest would be crucial. In the context of the WTO, she said that IP-protected goods and other property should be treated equally — while IP owners could control the export of their products, the WTO seemed to treat export controls by owners of raw materials differently. Furthermore, transparency mandated the introduction of a disclosure requirement for the origin of genetic resources in patent applications. She further advocated GI Extension and that IP enforcement should be the responsibility of the private sector.Pedro Roffe (ICTSD) closed the session with observations on the impact of FTAs on the international IP regime. While FTAs were a legitimate derivation from TRIPS, they were also an acknowledgement of its failure to address the complexity of policy in this area. Industry interests had played a decisive role in shaping the coverage of FTAs, which had been further enlarged through the most-favoured nation and national treatment rules in TRIPS. FTAs were an asymmetric development of imposing one system on the FTA partner and mainly had the effect of aligning regulatory regimes to the more advanced country’s regime (such as data exclusivity for drug test data). In summary, FTAs had led to an expansion of the IP system by forcing strict schedules of accession and ratification with respect to other treaties (such as UPOV 1991) and their effect on coalitions of like-minded countries in multilateral institutions was not yet clear. The impact of FTAs, including their compliance with TRIPS, should be further monitored and should ideally comply with the principles elaborated in the WIPO Development Agenda.
Session 13: The WTO in Transition: Coping with New and Evolving Challenges
The session was divided into two parts, the first dealing with food prices and subsidies in agriculture, and the second part with the future of the WTO.
Speakers expressed their reservations about members mandating the WTO to deal with agriculture and as an alternative suggested the creation of a World Agriculture Organization (WAO). The panellists were of the view that the WAO would be a much more farmer-friendly organization since farmers do not only have to compete with other farmers but also have to face pests, weather and natural disasters. Speakers warned governments that they should start regulating speculation in raw materials in the agricultural market since this action is harming food security and damaging food prices. While they agreed that this is not an area for the WTO, they stated that the WTO would not be able to function properly if this problem of speculation is not resolved.
Concerning the future of the WTO and the Doha Round, the panellists commented that the Round is dead and that it should be given a burial. They were of the view that the WTO must move forward now and make progress in another area. If not, it will lose credibility. Panellists argued that the negotiations are failing because they are based on rules and principles that no longer reflect the current political and economic landscape. In the same light, panellists blamed the shifting power geometry among WTO members for the problems in the Doha Round. Speakers said that the Doha Round has been unable to keep up with the geopolitical and financial changes that have happened since it was launched.