The Influence of Preferential Trade Agreements on the Implementation of Intellectual Property Rights in Developing Countries: A First Look

Study
Date period
1 November 2011

SummaryPreferential Trade Agreements (PTAs) have acquired greater importance in recent years as the stalemate in the multilateral trading negotiations persists.  The intellectual property provisions in these agreements - often called "TRIPS-plus" as they go beyond the requirements of the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) - have received considerable attention particularly in relation to development and public interest objectives.

However, less is known about the actual implementation of IP obligations in PTAs. This issue paper aims to bridge this research gap by analyzing how PTAs have influenced IP regimes in developing countries and the challenges these countries face in implementing these obligations.

In this regard, the paper finds that PTAs are clearly drivers of significant IP reform in developing countries and that the implementation challenge for these countries is real and complex. The challenge does not only arise because of the higher standards of IPR protection under PTAs but also because of the sometimes narrow scope for interpretation when transposing these obligations into domestic law.  In addition, the implementation itself, whether through literal transposition of the law or through adaptation, leads to different outcome depending on the implementing country's legal system and how stakeholders respond to the changes.

The paper posits that implementation does not stop with the transposition of international trade obligations into the domestic legal system. Rather, it continues with the need to modify laws and enforcement practices. In essence, PTAs become "live" agreements that must be actively managed over time.

One lesson that emerges is that countries engaged in PTAs negotiations should bear in mind the possible implementation challenges and the considerations set forth in the paper. After signing the PTAs, the implementation process requires a detailed examination of the nature of obligations and adequate use of any flexibility available and, where necessary, further elaboration of concepts and legal terms.

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SummaryPreferential Trade Agreements (PTAs) have acquired greater importance in recent years as the stalemate in the multilateral trading negotiations persists.  The intellectual property provisions in these agreements - often called "TRIPS-plus" as they go beyond the requirements of the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) - have received considerable attention particularly in relation to development and public interest objectives.

However, less is known about the actual implementation of IP obligations in PTAs. This issue paper aims to bridge this research gap by analyzing how PTAs have influenced IP regimes in developing countries and the challenges these countries face in implementing these obligations.

In this regard, the paper finds that PTAs are clearly drivers of significant IP reform in developing countries and that the implementation challenge for these countries is real and complex. The challenge does not only arise because of the higher standards of IPR protection under PTAs but also because of the sometimes narrow scope for interpretation when transposing these obligations into domestic law.  In addition, the implementation itself, whether through literal transposition of the law or through adaptation, leads to different outcome depending on the implementing country's legal system and how stakeholders respond to the changes.

The paper posits that implementation does not stop with the transposition of international trade obligations into the domestic legal system. Rather, it continues with the need to modify laws and enforcement practices. In essence, PTAs become "live" agreements that must be actively managed over time.

One lesson that emerges is that countries engaged in PTAs negotiations should bear in mind the possible implementation challenges and the considerations set forth in the paper. After signing the PTAs, the implementation process requires a detailed examination of the nature of obligations and adequate use of any flexibility available and, where necessary, further elaboration of concepts and legal terms.

Finally, the paper identifies the need for further country-specific examination and consideration of ways to manage the implementation and transposition of PTA standards into domestic law, adopting additional complementary mechanism, as well as addressing institutional capacity constraints.The implementation by developed country partners of the provisions that might be beneficial to developing countries, such as the technology transfer provisions in the EU-CARIFORUM agreement, also requires further assessment.

Foreword



As signs of the stalemate in the multilateral trading system become unequivocal, Preferential Trade Agreements (PTAs) are acquiring an ever-greater importance in trade liberalization and in shaping the trade obligations of many countries.

In the area of intellectual property (IP), there has been considerable analysis, in recent years, of the IP provisions in PTAs particularly those between industrialised countries and developing ones. Such analysis has mostly focused on the nature of these obligations - often labelled ‘TRIPS-plus\\\\\\\' as they go beyond the requirements of the WTO Agreement on Trade Related Aspects of Intellectual Property (TRIPS) - and the extent to which they could possibly affect the use of TRIPS flexibilities aimed at safeguarding certain public interest and development objectives.

However, there has been much less study about the actual implementation of IP obligations in PTAs. The Influence of Preferential Trade Agreements on the Implementation of Intellectual Property Rights in Developing Countries: a First Look aims precisely to bridge this research gap. It attempts to better understand how PTAs have influenced IP regimes in developing countries and then goes to highlight some of the challenges facing these countries in the implementation process. This is by no means an easy task. First, little information is available on what countries do after signing these agreements. Second, the nature of IP commitments under PTAs requires a relatively extensive review of legislation, regulations and practices.

The paper defines implementation as the steps required to comply with a trade agreement and to administer its provisions. It also examines a broader notion of implementation as it relates to the wider set of policies that are required to take full advantage of the trade effects created by the agreement.

The paper finds that PTAs are clearly drivers of significant reform in developing countries, as was rightly suspected by those who noted the far reaching nature of the provisions in these agreements; second, and importantly, the implementation challenge for developing countries is real and complex. In effect, implementation does not stop with the transposition of international trade obligations into the domestic legal system. Rather, it continues with the need to modify laws and enforcement practices. There is also the need to revisit international agreements with third parties, the interpretation of commitments, reporting requirements, as well as compatibilities with the domestic legal infrastructure and capacity. The paper thus emphasizes that PTAs become \\\\\\\"live\\\\\\\" agreements that must be actively managed over time. It demonstrates the variation in implementation of often similar obligations among PTA signatories, some adopting more innovative approaches, while others fail to make adequate use of flexibilities in existing obligations.

The paper does not pretend to be exhaustive in view of the great number of existing PTAs and the diversity of developing countries parties to them as well as the diversity of IP obligations they include. Rather it draws on some of the most compelling examples to advance its arguments and illustrate key findings.

One lesson that emerges from the paper is that countries engaged in negotiations over PTAs should already bear in mind the possible implementation challenges at the negotiation stage taking into considerations some of the examples it points out to. After signing the PTAs, the implementation of the process requires a detailed examination of the nature of obligations contracted and adequate use of any flexibility available and where necessary further elaboration of concepts and legal terms.

In a knowledge-based economy, a better understanding of intellectual property rights is imperative for informed policy making in virtually all areas of development. This has been the central objective of the UNCTAD-ICTSD Project on Intellectual Property Rights and Sustainable Development that was launched in July 2001. The project focuses on ensuring a proper balance between the different interests at stake in designing appropriate intellectual property regimes that are supportive of development objectives and compliant with international commitments. An additional central objective has been to facilitate the emergence of a critical mass of well-informed stakeholders in developing countries - including decision-makers and negotiators as well as actors in the private sector and civil society - able to define their own sustainable human development objectives in the field of intellectual property and effectively advance them at the national and global levels.

We sincerely hope you will find this issue paper a useful contribution to efforts aiming at ensuring an effective and balanced implementation of IP provisions in PTAs in conformity with obligations undertaken and taking advantage of available policy space so as to ensure such implementation is supportive of public policy objectives.

Ricardo Meléndez-Ortiz
Chief Executive, ICTSD

Supachai Panitchpakdi
Secretary-General, UNCTAD