7:25 AM Jun 20, 1995

CTE TO FOCUS ON TRIPS AND SUSTAINABLE DEVELOPMENT

Geneva 20 June (Chakravarthi Raghavan) -- The Committee on Trade and Environment (CTE) of the World Trade Organization (WTO) is to hold a first discussion this week on the TRIPs agreement and any of its provisions that may need modifications for promotion of sustainable development.

Participants do not expect any decisions other than a flagging of issues for further consideration. However, the US hopes to bury the discussion, and is known to be pressuring several developing countries.

The Marrakesh Ministerial decision establishing the CTE mandates it to identify the relationship between trade measures and environmental measures "in order to promote sustainable development" and within this broad mandate to look at the provisions of the multilateral trading system (GATT 1994, GATS and TRIPs) and make recommendations for any modifications that might be needed.

At the time of the conclusion of the Uruguay Round in December 1993, the CTE was established at the instance of the major industrial nations, with a view to looking at the provisions of the GATT 1994 from the environment perspective. This was to satisfy a demand of their environment lobbies, some genuine and others protectionists masquerading as environmentalists, who wanted provisions to enable departures from the trading rules for environmental purposes.

The final mandate embraced the entire range of the agreements in the WTO and the multilateral trading system.

The mandate of the CTE was spelt out in terms of changes in the trading system and its rules needed for enhancing the positive interaction between trade and environmental measures for promotion of sustainable development, for avoiding protectionist measures and adhering to multilateral disciplines to ensure responsiveness of the system to environmental objectives set out in Agenda 21 and the Rio Declaration, in particular its Principle 12, and surveillance of trade measures used for environmental purposes, of trade-related aspects of environmental measures with significant trade effects and effective implementation of the multilateral disciplines governing them.

The preambular paras, which are specifically affirmed to be included in the terms of reference, mention the Rio Declaration and Agenda 21, the work programme envisaged in the decision on Trade in Services and the Environment, and the relevant provisions of the TRIPs agreement.

At the CTE -- where as in other WTO/GATT bodies, decision-making is through informal consultations among key delegations, with the formal meetings rubber-stamping them, or in cases of disagreement, setting out differing views of protagonists with further consultations set -- the United States attempted to close off serious consideration of TRIPs, but some of the developing countries pressed for it.

Ultimately, the CTE has set the issue for discussion at its meeting this week on 21-22 June.

To help the discussions, and in response to the request from the CTE, the secretariat has produced a note on the negotiating history of the bio-diversity convention (the multilateral treaty signed at Rio some of whose provisions are seen as in conflict with the TRIPs) and on the negotiating history of some of the relevant provisions of the TRIPs agreement.

Like all WTO documents, it is "restricted" -- meaning not officially available to the media or others outside.

But then in the WTO as its predecessor GATT, even the Directory, listing delegations and the secretariat staff are "restricted" documents not available as of right while in the UN or other international bodies these are routinely available to anyone wanting it. Getting even a WTO directory is like getting hold of a Kremlin or even a telephone directory in the old Soviet Union or the US-CIA's staff lists even now.

But while the bio-diversity convention was negotiated openly, with many non-governmental groups in on the process, the Uruguay Round agreement and even more the TRIPs accord was through a highly non-transparent process -- not merely for outsiders, but even for delegations.

At Brussels, at the 1990 Ministerial meeting for e.g., one of the consultations was on TRIPs (an area of considerable deadlock). The consultation was restricted to a few key delegations. No African delegate was present or invited, and when one attempted to go to the meeting, he was thrown out!

As one of the key negotiators from the North who did not want to be identified but was involved in TRIPs negotiations recently explained, there were the formal proposals on the table that had been put into a consolidated negotiating text by the chairman of that group (Amb. Lars Anell of Sweden -- whose country's pharmaceutical industry was with the European industry group pushing for it), and there were some informal meetings where these were discussed.

There were also some smaller meetings, some in the presence of the secretariat (which took down some notes of what did or did not transpire, but which are not available even now to the delegations).

There were other consultations among a few (and not always involving all the majors even) to evolve compromises, without which a few key countries like India could even have blocked the accords.

Even then, there were disagreements, and Anell finally gave his own "compromise" that got incorporated into the Dunkel text tabled in December 1991, but which never was in fact discussed either in the negotiating group or subsequently in the Trade Negotiating Committee (that alone considered the issues from 1 January 1992).

Though in such a situation, developing countries should be more interested in forcing a "second look" and achieve some modifications, there is some ambivalence among them due to a variety of reasons:

* The extreme neo-liberalist dogmas (as preached rather than as practised in the North) that some of their economic and finance ministers have embraced -- to the point of rejecting and ridiculing any industrial policy approach in their countries and insisting on policies that would attract foreign funds coming in.

* Many of them are still facing strenuous opposition within their countries to the WTO accord, including on the TRIPs agreement, and US pressures on them to go beyond the "obligations" of the agreement. It is difficult for policy makers of these countries to force down the agreement on their public, while at the same time setting up a process at the WTO for revision of that agreement on sustainable development grounds.

* Some of them also think that any efforts to look at the TRIPs might well end up by pressures on them from the US for changes that would tilt the balance even further -- though some of them privately confess that their not taking it up would not reduce such US pressures.

Most of the developing countries in fact negotiated throughout the Uruguay Round under duress -- the US threat to use its trade law provisions, Special 301 of its trade law, to take unilateral sanctions against their trade. And they accepted the final package, including TRIPs in the belief and hope it will provide them trade security and protection against unilateral sanctions.

But as the course of the current Japan-US auto-dispute and US unilateral trade sanctions show, the WTO does not give them that security and the unilateral threat continues to be wielded.

On the other side, some of the international environment NGOs, who took ambivalent positions during the Uruguay Round itself, are now more appreciative of the concerns raised at that time by Southern NGOs.

Some of these are now being articulated, though in a narrow range -- such as safeguarding biodiversity and the issue of 'seeds'. But even these have not come forward to tackle the wider issues.

While the TRIPs, like many other of the WTO agreements, are being presented as one with some internal balance, outside experts have stressed that whatever the overall balance of the WTO, and its promises of increased market access for the developing world, the TRIPs is a negative element in this balance.

There is no example in the capitalist industrial development of the present industrial countries where any country industrialized and developed itself under the kind of global monopoly privileges accorded to the foreigners as under the TRIPs.

While intellectual property protection, and the monopoly privilege granted to holders of IPRs to authorize exploitation of their innovation for a limited period, played a role in promoting innovation of technology and its quick diffusion, this was always subject to the balance set within countries (depending on their stage of development) between this privilege and societal rights.

Under the WTO system, the issue remains whether the promotion of sustainable development, the prime objective, asserted by the Rio summit, and in the CTE decision, could be achieved through the TRIPs regime or should there be some changes to reintroduce societal balances.

The driving force behind TRIPs accord was the pharmaceutical and chemical industries of the US, Europe and Japan which pushed for global patent monopolies, and the computer software industries of the US and the film and audio-visual industries of the United States which pushed for stricter copy right laws and enforcement.

This privilege has generally resulted in increased prices paid by the consumers. While in a national context, this resulted in capital accumulation and further innovation as also technology diffusion and competition, there is no such experience in the context of global monopoly, but some indications of likely contrary behaviour.

In the case of pharmaceuticals and health care, this privilege has increased consumer and public health costs.

In the area of plant and animal species and varieties, and their breeding and commercial exploitation, there had also been the conflict between the European and American practice and systems.

The US system had in fact started with a higher degree of prohibition on patenting of animals and life-forms, but a US Supreme Court decision (whose basic soundness in terms of the issue of 'invention' warranting a patent is challenged by many geneticists) allowed such patenting for socalled manipulated genes and the varieties and breeds incorporated in them -- even though genes themselves don't and can't reproduce themselves nor can Man without using the natural processes. With all his claims of mastering science, Man can't still play God.

In Europe, the European Patents Treaty prohibited patenting of life. But the executive European Commission (at the instance of industries) has been trying to find a way of getting around this.

A number of developing countries, even when TRIPs was being negotiated, were concerned over the implications for their agriculture and societies of patenting of life and seeds etc.

The public of these countries have now become more aware, and in many of them opposition is growing.

It was this conflict, for example, that resulted in the provisions of Art. 27:3 (b) of the TRIPs agreement, and its permissive language to countries to exclude from patentability plants and animals other than micro-organisms, and essentially biological processes for production of plants or animals other than non-biological and micro-biological processes.

This was subject to the stipulation that these countries should provide for protection of plant varieties by a patent or effective sui generis system and for a review of the provision four years after WTO entry into force (i.e. after 1999).

At that time (when this was put into TRIPs) the EC Commission had hoped that its attempts to get changes in the European Patent Treaty and allow for gene-patenting would be achieved - a hope that has received a serious set back since then the European Parliament rejected the proposed directive. But the EC Commission has not abandoned its objective, driven as it is by industry lobbies rather than public interest.

Several of the developing countries (after December 1991) acquiesced in this section, citing atleast to their home audiences, the provisions of the European treaty and its interpretations as excluding life patents and the patenting of naturally occurring genes.

But current scientific knowledge suggests that even the socalled manipulated genes are the naturally occurring genes of one species put into another and no gene has been 'created'.

One of the negotiators, who did not want to be identified, recently said that these entire provisions were the result of a large amount of ignorance of trade negotiations in this area: none of them knew or found an acceptable definition of a micro-organism and how it differed from a macro-organism (scientists even now don't agree on this) or micro-biological processes or how these operate.

Current scientific knowledge even rejects the view that the attributes of a human, animal or plant life vest in the gene in the DNA -- and irrespective of the reactions of the other genes or the feedback to the system from the RNA (and thus subject to modifications).

The claim by gene-patent holders over a particular gene in the chromosome chain they had identified, and shuffled into the chromosome of another plant or animal is thus challenged by respectable scientific opinion.

Anyhow, the reproduction of the chromosome with implanted gene, involves life-processes whether attributed to God or Nature. Even the tissue culture grown in labs use this life-process and there is nothing man-made and invented.

There are also a broad range of issues relating to the reciprocal obligations arising out of the Rio Summit and the environmental agreements like bio-diversity and climate change where the developing countries have agreed to undertake some commitments if they could have preferential access to environmentally sound technologies.

At Rio, and in the conventions, they accepted the argument that this could be achieved even under conditions of IPR monopolies, through actions of home governments of IPR holders -- buying up the technology and making them available to the developing countries or encouraging the transfer of such technology. At Rio, this was mentioned in the corridors as achievable through aid funds.

But with aid funds vanishing into thin air, how would the access to and transfer of technologies be achieved?

The secretariat document, understandably to some extent perhaps, does not deal with some of these issues that figured in the negotiating histories -- they were not formally on record. But to the extent it reflects only the recorded, and the views of secretariats, it is a partial history and could be misleading in terms of judging the issues of sustainable development and what is needed to promote them.