Negotiating Caribbean IP rights: a question of balancing national policy priorities with foreign trade policy?
A group of small economies in the Caribbean with limited industrial and technological capability signed an Economic Partnership Agreement (EPA) with the European Commission covering the protection and enforcement of intellectual property (IP) rights. Many other poorer nations from the African and Pacific region also signed interim ‘goods only' EPAs with a further possibility of negotiating on IP rights protection. ACP countries have been the beneficiaries of preferential arrangements with the European Union and the United States for many years. Recently, the erosion of the preferential arrangements due to liberalisation and increased competition from China and India, and the legal challenges at the WTO, shifted the relationship towards EPAs and free trade agreements. With preferential schemes failing to induce development and institutional reform, the economies of a significant number of ACP countries are on the verge of becoming inconsequential to the global economy - except as suppliers of raw materials.
The provisions of the European Commission-CARIFORUM (Caribbean) EPA on IP rights should be examined in light of the factors necessary for institutional and economic development of ACP countries. With change in industrial competitive structure based on innovation, technology and knowledge, the advanced nations are aggressively pushing for better protection of their intellectual assets through IP rights. The EPA negotiation experience shows us the different approach taken by developing countries. The African and Pacific countries did not concede to European demands on IP rights protection and instead accepted an agreement covering only goods in order to ensure consistency with the WTO rules.2 So the question is: did the Caribbean secure any advantage by agreeing to European demands on IP rights protection, and if so, what is the way forward for other regions? There are various issues that may arise from the IP rights under the EPA, including the balance in concessions, the long term advantages or disadvantages for Europeans promoting narrow and short-sighted interests in EPAs and the necessary response to address development challenges in IP rights.
Balance in concessions
The EPA agreements introduce binding TRIPS-plus standards on the Caribbean with non-binding commitments for cooperation in innovation, technology transfer and cultural industry development.3 Whether the Caribbean will benefit from the provisions for cooperation in innovation and technology transfer depends on further implementation arrangements and funding from the Europeans. However, if the European Commission fails in its commitment to cooperate on innovation, such failure will not be the basis for the Caribbean countries to derogate, withdraw, or change their commitment with respect to IP rights protection.
The Caribbean signatories would have to implement their obligations by January 2014, unless a new period is agreed jointly which takes into account different priorities and levels of development. This transition period, which is beyond 2021 for Haiti, is the European Commission's only significant concession to Caribbean countries.4 Under the TRIPS Agreement, by the end of the transition period, the Caribbean nations have to extend the same level of protection that they conceded to the EU to all WTO members. This includes the extension of the standards of protection under the WIPO internet treaties. The TRIPS-plus effect of the EPA is abundantly clear: when WTO members enter into an agreement on IP rights, they usually move beyond the TRIPS standard. The European Commission secured major concessions from the Caribbean nations by expanding the protection of geographical indications (GIs) - a category of IP rights that Europeans are successfully using to target sophisticated consumers with their agricultural products, beverages, wines and spirits. The European Commission also secured Caribbean commitment to the WIPO internet and IP administration treaties, protection of industrial design, trademarks and enhanced the standard for enforcement of IP rights in the Caribbean region.
The Caribbean negotiators attempted to balance respective national interests in the EPA IP provisions. However, their interest in cultural industries and the protection of Caribbean GIs hardly benefited from the final result of the IP rights in the EPA. WTO panels have already confirmed access to European registration and protection of GIs to all WTO members.5 Caribbean countries do not receive any additional advantages by agreeing to the extension of GIs to all products. Instead they lose a bargaining tool in the WTO negotiations. Moreover, the provisions of the EPA on traditional knowledge and genetic resources do not resolve any global legal questions but lock the Caribbean countries into a consultation mechanism with the European Commission in international negotiations.
Perhaps the most innovative aspect of the CARIFORUM EPA relates to the Protocol on Cultural Cooperation that aims at implementing the UNESCO Convention on Artistic and Cultural Expression.6 Much of the protocol's best endeavor provisions on movement of artists, technical assistance, co-production and publishing would only take effect through subsequent arrangements for cooperation and implementation. Thus, the advantage for Caribbean nations from the provisions on GIs and cultural cooperation lies in establishing the basis for further collaboration.
The EPA provisions do not impact current EU trade policies and rules that could affect the trade interest of the ACP countries. Even the negotiations at the WTO hardly indicate if the European agricultural policy is to be changed beyond the minimal reform plan within the EU itself. The patent system that can be used to misappropriate genetic resources and traditional knowledge, the plant variety protection that threatens food security during high food prices and other EU laws and practices remain unchallenged under the EPAs.
Fixing national policy orientation and institutions for development
The international debate on EPAs and IP rights protection has focused too much, although for the right reasons, on the unfair exercise of political and economic leverage of rich countries against poor ones. Beyond the discourse on power relations, the responsibility of governments for national policies of development needs a fresh look, especially as the Caribbean countries proceed to implementing the IP section of the EPA by 2014. The backbone of development institutions is the laws and the national policy orientation towards local economic actors. The UN Commission on legal empowerment of the poor identified that the prosperity of rich countries is created through a variety of instruments and norms such as, tradable assets and IP rights that rely on an effective legal framework and functioning institutions. Bringing the institutions of the rich countries, such as higher standards of IP rights protection, to small economies would mean at least two things: (1) detaching foreign trade policy from local economy, and (2) undermining local potentials in favour of commercial interests of rich nations.
When implementing EPA commitments the Caribbean nations need to consider how to respond to these challenges through (i) counter measures that minimise the potential costs of the EPA; (ii) proactive measures empowering the local economic actors and (iii) development benchmarks that function as a basis for implementing the EPA provisions on IP rights. In this regard, the Caribbean nations need to prevent the tightening of local markets for knowledge goods due to higher standards of IP rights. This can be done through ensuring stronger patentability criteria, introducing effective and robust limitations and exceptions to IP rights and regulation of licensing and anti-competitive behavior. At the same time the Caribbean nations need to invest in institutions that will encourage local innovation and empowerment. The protection and use of traditional knowledge, the development of an IP property system that is closely linked to the local economy (such as utility models), creating collective trademarks, protection of cultural expressions and branding of local products should be the ultimate aim of Caribbean countries. On the whole, developing nations lag behind in global research, development expenditure and the patenting trend. While catching up with advanced nations could be a novel ambition, poorer countries need to look at the potential and IP rights that are appropriate to their economies. Finally, since the Caribbean nations have the option to request an extension to the implementation period, they need to use progress in protecting and promoting Caribbean GIs, cultural industry, use of the utility model, licensing and technology transfer, and most importantly, the implementation of the provisions for cooperation on innovation, as benchmarks for full implementation.
Lessons for African and Pacific countries
The recent study by CIEL shows that IP rights remain on the agenda for African and Pacific countries following the conclusion of the ‘goods only' interim EPA.7 It recommends that ACP countries try to identify offensive interests in IP rights such as genetic resources and traditional knowledge, as well as defensive interests such as countering higher standards of IP rights. However, it is proposed that the best strategy would be not to negotiate IP rights under EPAs at all. The lesson from the CARIFORUM EPA is clear: negotiation of IP rights does not bring a balanced outcome due to the sharp contrast in economic interests and institutional factors necessary to improve national competitiveness in a globalised world. The CARIFORUM EPA demonstrates the risks for African and Pacific regions of opening up negotiations on IP rights, with the hope of getting concessions on traditional knowledge, public health and genetic resources. The European Commission would not be able to offer any concessions for the offensive agendas of the African region, since that would require revisiting European laws.
Ultimately the prospect of development for ACP countries rests upon their own ability to upgrade local capabilities and empower local actors in the global economy. The EPAs undermine what is called ‘policy space' for economic development. However, it is not necessarily true that other ACP countries that have not signed an EPA with IP rights are using existing regulatory spaces, such as the transition period for implementation of the TRIPS Agreement for LDCs and the flexibility to promote public interest in the regulation of IP rights. Requests at the WTO for technical assistance to implement the TRIPS Agreement and recent interest in implementing higher standards of IP rights enforcement in the World Customs Organisation are examples of incoherent national policy orientation by some ACP countries. If African and Pacific countries are effectively able to reject European demands for higher IP rights standards in the EPA, but do not use the advantage of existing regulatory space, the discourse on power relationships and the problem of IP rights in economic development would be superficial.
The EPA negotiations on IP rights raise fundamental questions for development, not merely due to the TRIPS-plus nature of the commitments under the CARIFORUM EPA, but because the negotiations are an indication of how countries could harmonise their national priorities and relevant institutions in their foreign trade policy. There are no indications that the EU would negotiate its own policies that affect the socio-economic interests of ACP countries in negotiations related to IP rights. The European Commission aims to introduce institutions with higher IP rights standards that serve its industries and negotiation challenges at the WTO. ACP countries need to focus on the right domestic institutions and laws in order to improve learning, upgrade technological capability and ensure access to knowledge in the process of economic and human development.
1 Ermias Tekeste Biadgleng is Programme Officer for the Innovation and Access to Knowledge Programme at the South Centre in Geneva.
2 For further analysis of the status of IP negotiations of ACP countries with the European Commission, see CIEL (2008), Intellectual Property in European Union Economic Partnership Agreements with the African, Caribbean and Pacific Countries: What way forward after the Cariforum EPA and the interim EPAs? www.ciel.org
3 Trade and innovation in the EPAs: another step towards re-framing TRIPS, Malcolm Spence, Trade Negotiations Insights, Volume 7. Number 5 / June 2008, p.6. TRIPS is the World Trade Organisation Trade-Related Intellectual Property Rights Agreement.
4 Economic Partnership Agreement between the CARIFORUM states, on the one part, and the European Community and its member states, on the other part.
5 WTO (2005), European Commission - Trademarks and Geographical Indications, Reports of the panels on complaints by the United States (WT/DS174) and Australia (WT/DS290).
6 United Nations Educational, Scientific and Cultural Organisation (2005).
7 See endnote 2.