TRADE @ COP-7: WHAT TO LOOK OUT FOR...

Parties to the Convention of Biological Diversity (CBD) are convening for their seventh Conference (COP-7) from 9 to 20 February in Kuala Lumpur, Malaysia. The packed agenda includes issues covering various trade-related aspects, including discussions on the transfer of technology; invasive alien species; access and benefit-sharing related to genetic resources; measures to address perverse incentives; and draft principles and guidelines for the sustainable use of biodiversity.

Technology transfer, IPRs and biotechnology

The transfer of technology is one of the three priority areas of COP-7, along with mountain biological diversity and protected areas. The draft decision under this agenda item puts forward elements of a work programme on facilitating the transfer of and access to technology. The elements stress the need to create enabling environments, including appropriate IPR regimes, for the transfer as well as absorption, adaptation and diffusion of technologies.

While not explicitly referring to biotechnology, the suggested activities include an analysis of potential benefits, risks and associated costs related to the introduction of technologies, "including new technologies"; the promotion and advancement of priority access to results and benefits arising from technologies based upon genetic resources; and the encouragement of joint research programmes with associated jointly held patents or other IPR protection as well as other mechanisms to facilitate transfer of genetic resources-based technologies.

Invasive alien species and trade

Discussions on alien species had proven highly contentious at the last meeting of the COP when Australia, supported by some other Parties, had rejected the Guiding Principles for the prevention, introduction and mitigation of the impacts of alien species at the last minute over trade concerns (see BRIDGES Trade BioRes, 2 May 2002). The Principles were nevertheless adopted with Australia registering its formal objection. Since then, the issue has arisen during various biodiversity-related negotiations and is expected to again come up at COP-7, in particular given the extensive references to the WTO in the draft decision to be considered by the Parties. In particular, the draft decision invites the WTO and its bodies to consider the risks arising from invasive alien species in their deliberations and asks Parties to take into account the risks in their bilateral and regional trade arrangements. Furthermore, it requests the CBD Executive Secretary to collaborate with the WTO on integrating the issue into the WTO's training, capacity-building and information activities, and to renew his application for observer status in the WTO Committee on Sanitary and Phytosanitary Measures.

Alien invasive species will also be in the spotlight at the UN International Maritime Organisation (IMO)'s International Conference on Ballast Water Management from 9 to 13 February, which is expected to adopt a new international convention to prevent the potentially devastating effect of the spread of harmful aquatic organisms carried in ships' ballast water.

Access and benefit-sharing

Also on the agenda are discussions on the mandate of the World Summit on Sustainable Development to negotiate an international regime on access and benefit-sharing in the context of the CBD. The heavily bracketed draft decision highlights the key divisions among Parties regarding the nature, scope and elements of the regime and the timeframe of negotiations. Many developing countries, in particular those from the Like-minded Group of Mega-diverse Countries, are likely to renew their calls for a legally binding regime, pitching them against several developed countries, in particular the US. The timeframe of the negotiations is also likely to be contentious which in the draft decision ranges from "as soon as possible" to a more cautious "need for further analysis" of existing legal instruments and regimes, as advocated by several developed countries, including Canada, Japan, Norway and Switzerland (see BRIDGES Trade BioRes, 3 April 2003).

Regarding the scope of the agreement, Parties can be expected to focus on whether the regime should also cover the products of genetic resources and their derivatives as well as associated traditional knowledge, innovations and practices. Parties will also need to consider how the regime will relate to and integrate existing instruments and processes, including at the WTO, the World Intellectual Property Organization (WIPO) and the International Convention for the Protection of New Varieties of Plants (UPOV), as repeatedly stressed by a number of countries, including Canada, Australia and the EU.

Of particular interest from a trade perspective will be debates on the inclusion of requirements to disclose the origin of genetic resources and associated traditional knowledge in applications for intellectual property rights (IPRs). This issue is likely to arise both in discussions on the international regime as well as on measures to ensure compliance with prior informed consent (PIC) and mutually agreed terms (MAT) provisions of the Bonn Guidelines (see BRIDGES Trade BioRes, 18 April 2002). The inclusion of such a requirement, together with evidence of PIC and benefit-sharing, continues to be strongly advocated by a number of developing countries -- led by Brazil and India -- in the WTO Council for Trade-related Aspects of Intellectual Property Rights (see BRIDGES Trade BioRes, 13 June 2003).

Addressing perverse incentives

The draft decision on removing and mitigating perverse incentives -- ie policies or practices that encourage resource uses leading to the degradation and loss of biodiversity -- sets out a number of principles and guidelines for the identification and reform of such policies as well as the monitoring and enforcement of the reforms. Often mentioned in this context are agricultural subsidies, which have been cited as a major contributing factor for biodiversity loss (see BRIDGES Trade BioRes, 22 January 2004). The study by the CBD Secretariat on Domestic Support Measures and their Effects on Agricultural Biological Diversity, concludes that reducing trade-distorting subsidies at the WTO could help to achieve the CBD's objective to conserve and sustainably use biological diversity. Nevertheless, the study notes that "unfettered market forces cannot be expected to automatically give rise to biodiversity-friendly agricultural production systems", and that therefore "well-designed flanking policies" in both subsidising and non-subsidising countries were key to complement the liberalisation process.

Specifically, in the case of production-linked (Amber Box) subsidies, the overall effects of removing these clearly-trade distortive subsidies would likely be positive for biodiversity in the subsidising countries of the North, given that agricultural land could be expected to contract as a result. However, the corresponding expansion of farming in most non-subsidising countries could be expected to have negative impacts on agro-biodiversity, the extent of which would depend on various regulatory and socio-economic factors. At the same time, carefully targeted, designed and implemented agri-environmental programmes under the Green Box (decoupled and only minimally trade distorting payments) were found to potentially constitute positive incentives for conservation and sustainable use of agricultural biodiversity. Regarding Blue Box payments (partly decoupled support under production-limiting programmes), which are less distorting than Amber Box measures, the study identified "positive repercussions for biodiversity" although they seemed more limited than those under the Green Box.

Sustainable use of biological resources

At the centre of the debate under this agenda item will be the draft Addis Ababa Principles and Guidelines for Sustainable Use of Biodiversity. Acknowledging the potential of sustainable use as an effective tool to combat poverty and achieve sustainable development, the draft Principles provide a framework for governments, resource managers and other stakeholders to ensure that the use of biodiversity components will not result in a long-term decline of biological diversity.

A number of principles are of particular interest from a trade perspective. Specifically, Principle 3 calls for the identification and removal of market-distorting policies, laws and regulations at the national and international levels that provide perverse incentives undermining biodiversity conservation and use (see also above). Principle 10 acknowledges the need for national and international policies to better reflect the current and potential values derived from the use of biological resources, encouraging this information to be incorporated in policy- and decision-making processes, including in trade and development policies. Principle 13 stresses the importance of also internalising the costs of management, encouraging governments to, inter alia, provide economic incentives for managers, such as tax incentives and/or the promotion of "green" labels.

Additional Resources

For further background, see the COP-6 special issue of BRIDGES Trade BioRes.

IUCN POLICY PAPERS FOR COP-7. These policy recommendation papers and information papers have been prepared by different components of IUCN as a contribution to COP-7.