5 March 2013-Intervention of Nepal (LDC Group) at WTO Council for TRIPS: Request for an Extension of the Transitional Period

On Tuesday, 5 March 2013, the Ambassador of Nepal made the following intervention at the World Trade Organization’s Council for TRIPS, on behalf of the LDC Group on agenda item 11, Request for an Extension of the Transitional Period under Article 66.1 of the TRIPS Agreement.

WTO Council for TRIPS Meeting, March 5-6, 2013
Agenda item 11 – Request for an Extension of the Transitional Period under Article 66.1 of the TRIPS Agreement

Presentation of Request (IP/C/W/583) by Nepal on Behalf of LDCs Group

Mr. Chairman,

As you explained, LDCs’ request for an extension of the transitional period under Article 66.1 of the TRIPS Agreement, contained in the document IP/C/W/583, was introduced on behalf of LDCs Group to the last TRIPS Council. Today, I intend to present the request with details.

LDCs communication containing the duly motivated request of November 5, 2012 is self-explanatory. It contains an annexed draft decision and provides the rationale behind our request. We seek the decision that the LDCs shall not be required to apply the provisions of the Agreement, other than Articles 3, 4 and 5, until they cease to be an LDC.

Mr. Chairman,

An important flexibility available to LDCs under the TRIPS Agreement is the transition period that is extendable. This flexibility was granted to LDCs in recognition of their special needs and requirements, their economic, financial and administrative constraints and their need for flexibility to create sound and viable technological base. While the initial 10 year transition period was to expire at the end of 2005, TRIPS Council approved in 2005 an extension of the period, which will expire on July 1, 2013. LDCs now submit a duly motivated request that the transition period be extended further.

LDCs need the continuation of flexibility as their situation has not changed significantly over the years. Their marginalization continues. They have not been able to develop their productive capacities which limit their meaningful integration into the world economy.

LDCs continue to be characterized by multiple structural constraints that include low per capita income, low level of human development and extreme vulnerabilities to external shocks. LDCs are home to more than 50 per cent of over a billion people who live in extreme poverty. These countries are the most off-track in the achievement of the internationally agreed development goals, including the Millennium Development Goals. They bear considerable health burdens – of both communicable and non-communicable diseases. In 2011, according to UNAIDS, some 9.7 million of the 34 million people living with HIV worldwide lived in the LDCs. Of these people, only 2.5 million had access to antiretroviral treatment.

LDCs’ economic indicators have not changed since 2005. Trade in goods and services has not improved much– in fact trade deficit in both goods and services have increased; per capita GDP growth has fallen.

All LDCs are net payers of royalties. These countries have not been able to spend even a small fraction of their national budget to research and development as they have to concentrate more on basics like health and education. The developmental schemes for transfer of technology provided in TRIPS Article 66.2 have not effectively and adequately materialized.

The level of technological development in the LDCs has remained low. In UNDP’s Technological Achievement Index LDCs are at the bottom. So are they in UNIDO’s Competitive Industrial Performance Index and UNCTAD’s Innovation Capability Index. Numbers from WIPO reports indicate that LDCs have not been able to enter the race of technology and innovation.

In Istanbul Programme of Action we all recognised that LDCs are lagging behind in the critical areas of science, technology and innovation. Unless LDCs have flexibilities to adopt policies to stimulate technological catch-up with the rest of the world, they will continue to fall behind other countries and face deepening marginalization.

In terms of future outlook, the 2012 UNCTAD LDCs report, has noted that “LDCs have to prepare for a relatively prolonged period of uncertainty, with possible escalation of financial tensions and real economic downturn”.

The flexibility agreed in TRIPS Article 66.1 is in consideration of LDCs’ special situation and it is not possible to predict when LDCs will be able to overcome this. It has been recognized in the preambular paragraph that least developed countries have “special needs” and thus need “maximum flexibility in the domestic implementation of laws and regulations in order to enable them to create a sound and viable technological base” LDCs view that the most logical and predictable approach is not to set an artificial timeframe. Our proposed approach gives more certainty and predictability – once you graduate, you need to comply. We find precedence of such exemption in Article 15(2) of the Agreement on Agriculture.

LDCs’ request has been motivated by the need of policy space to (to quote UNDP’s latest issue brief) ‘conserve the autonomy to determine appropriate development, innovation, and technological promotion polices, according to local circumstances and priorities’. They need such space to ensure access to various technologies, educational resources, medicines and tools necessary for development. Most IP-protected goods and services are simply beyond the purchasing power of least developed countries and their people. To quote UNAIDS Executive Director Michel Sidibe, ‘An extension would allow the world’s poorest nations to ensure sustained access to medicines, build up viable technology bases, and manufacture or import the medicines they need’.

TRIPS Article 66.1 specifies an obligation to grant extensions once the TRIPS Council receives a duly motivated request from LDCs. Ministers have invited us ‘to give full consideration’ to a duly motivated extension request from LDCs. Paragraph 2(iii) of the Uruguay Round Decision on Measures in Favour of LDCs specifies that ‘sympathetic consideration shall be given to specific and motivated concerns raised by the least-developed countries in the appropriate Councils and Committees’.

While I present the LDCs proposal, I recall the statement UN Secretary General Ban Ki-moon made back in 2007 at the opening of ECOSOC session (quote-unquote) “The rules of intellectual property rights need to be reformed, so as to strengthen technological progress and to ensure that the poor have better access to new technologies and products”. What LDCs are seeking today does not go to the extent of reform of IPR. We are simply asking for the continuation of flexibility already agreed in 1995 – with reasons.

Mr. Chairman,

Before I conclude, I take this opportunity to extend the LDCs Group’s thanks to you for your constructive efforts to bring us all together on the issue. I thank Members for their interests in LDCs Proposal. We have already had a couple of rounds of informal consultations with Members, including the one the Chair facilitated. We are encouraged to note the positive engagements.

We would also like to highlight that the LDC request and draft decision text have received strong support from the UN development agencies, civil society as well as from industry.

Today, we request Members to extend support to the LDCs’ request, which is duly motivated and to adopt the draft decision contained in the annex of the document no IP/C/W/583.

Thank you.