ACTA: Original Expectations and Future Implications

17 December 2010

On 15 November, a group of forty mostly industrialised countries released the text of the Anti-Counterfeiting Trade Agreement (ACTA). This article looks at the treaty's possible implications for the global intellectual property system, as well as its backers and the developing countries hostile to it.

One way to determine the significance of ACTA is to assess whether it has lived up to the expectations expressed by the parties in 2007-2008 when it came first under consideration.

In an implicit reference to countries such as China and other developing economies, a 2007 discussion paper by the Australian Department of Foreign Affairs and Trade underlined that the "extent to which ACTA would attract support from countries where counterfeiting and piracy is more problematic would be critical in determining its real value." The US said it expected other trading partners to "join in the emerging consensus for stronger IPR enforcement," including developing countries, which also have "a major stake in fighting counterfeiting and piracy."

On this count, not only did ACTA not attract support from emerging and developing countries, it has actually antagonised them. At recent TRIPS Council meetings, key developing countries, including China, India and Brazil, have come out in full swing against ACTA, even questioning its compatibility with WTO rules (see page 5). India indicated that "initiatives such as ACTA could short-change legal process, impede legitimate competition and shift the escalated costs of enforcing private commercial rights to governments, consumers and taxpayers" and thus have "the portents to completely upset the balance of rights and obligations of the TRIPS Agreement."

Another objective originally pursued by ACTA promoters was to set a new, higher benchmark for enforcement. Hyperbolic references are often made to ACTA's ‘robust' and ‘state-of-the-art' enforcement standards. However, the most recent text pales in comparison to the original level of ambition of the treaty's promoters. Ottawa University's Michael Geist believes the ACTA Internet chapter "must be seen as failure by the US, which clearly envisioned using it to export its Digital Millennium Copyright Act (DMCA)-style approach."

Despite the lack of meaningful engagement with developing countries, and the watered down agreement that emerged from the last round of negotiations, industrialised countries have nevertheless come close to their main objective: the establishment of a ‘new international framework' on IPRs enforcement whose provisions go beyond those of the TRIPS Agreement.

ACTA and the Global IP and Enforcement Landscape

Whether ‘light' or not, ACTA is bound to have important repercussions on the global IP landscape as it is likely to become the ‘third pillar' of the global IP and enforcement system alongside the WTO TRIPS Agreement and WIPO-administered IP treaties.

As noted with concern by Brazil at the October TRIPS Council session, ACTA contains the necessary ingredients that may over time convert it into "a truly international organisation dealing with the enforcement of IP rights, a development whose impact on WIPO and the WTO, especially on capacity-building and technical assistance, are unpredictable at this stage."

ACTA promoters have repeatedly affirmed that it does not seek to replace or compete with existing international fora and agreements. The treaty's preamble indicates that it intends to provide effective and appropriate means to complement the TRIPS Agreement and to operate "in a manner mutually supportive of international enforcement work and co-operation conducted within relevant international organisations." However, ensuring ‘mutual supportiveness' in practice may not always be easy.

In terms of institutional arrangements, ACTA will establish a committee with broad powers not only to oversee its implementation, but also to "make recommendations regarding implementation and operation of the agreement, including endorsing best practice guidelines" (Article 5.1.3.c). The adoption of best practices clearly means that ACTA is likely to  become the de facto locus for future international norm-setting on IPR enforcement, an objective constantly but unsuccessfully pursued by industrialised countries both at WIPO and the WTO over many years.

ACTA and Developing Countries

A key objective of ACTA is to secure the participation of emerging and developing economies. Indeed, as originally envisioned, it would make little sense, in terms of combating piracy and counterfeiting, to have it confined to mainly industrialised countries, which already have strong enforcement standards.

In this regard, ACTA chapter 4 on international co-operation is of significance and has attracted relatively little attention in contrast to other parts of the agreement. Chapter 4 recognises that international co-operation is ‘vital' to achieve effective IPR protection (Article 4.1.1). It also includes a section on capacity-building and technical assistance, which will be available not only to ACTA members, but also "where appropriate, for prospective parties" (Article 4.1.3).

A developing country interested in joining ACTA would thus be entitled to technical assistance aimed at ‘improving enforcement of intellectual property rights' from other ACTA parties taking into consideration that it is ultimately the ACTA Committee which "shall decide upon the terms of accession for each applicant" (Article 6.5.2). This gives considerable leeway to ACTA parties to shape the IPR enforcement legislation and practices of prospective members in accordance with their own views and interpretations of what ACTA standards entail and how they are to be implemented.

While ACTA is likely to be presented to prospective developing countries as leaving significant ‘flexibility' for domestic implementation, in practice, technical assistance and accession terms could be a means to bring ‘back in' some of the standards and interpretation left out during the final stages of the negotiations. It is well documented that technical assistance provided to implement the TRIPS Agreement, in particular legislative advice, was in many cases an important vehicle for TRIPS-plus interpretations of the agreement, which often did not incorporate the flexibilities, limitations and exceptions most relevant to public policy objectives.

Seeking a Modus Vivendi

Paradoxically, ACTA reflects the success of developing country resistance to attempts to achieve higher standards of IPR enforcement at the multilateral level. However, it also reflects their vulnerability vis-à-vis ‘forum shifting' strategies deployed by industrialised countries and demands made in plurilateral and bilateral agreements.

So what is left for developing countries to do? Criticising ACTA at the TRIPS Council is likely to be of limited effectiveness as industrialised countries are represented there precisely by the same trade ministries and IP authorities that pushed for the treaty's quick finalisation.

Although ACTA is often presented just as an agreement to combat counterfeiting and piracy through stronger intellectual property rights enforcement, through it, industrialised countries, and their IP-based industries, are seeking to amplify their competitive advantage over the emerging economies in a changing world economy where their manufacturing base has been considerably eroded to the benefit of these new players.

The debate about ACTA needs to be elevated from the self-contained and technical world of IP to the global policy debate about the future of the world economy. The G- 20 framework might provide an opportunity to do so, despite doubts about its effectiveness and representative nature. Ultimately, whether at the G-20 or elsewhere, industrialised countries and emerging economies will need to agree on a ‘modus vivendi' regarding the treaty between ACTA members and non-member countries.

Ahmed Abdel Latif is Intellectual Property & Technology Programme Manager at ICTSD.

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