Jan 15, 1989

TECHNOLOGY: G77 ASSAIL TRIPS MOVES, URGE FINALISATION OF CODE

GENEVA, JANUARY 23 (IFDA/CHAKRAVARTHI RAGHAVAN)— Attempts to establish any world-wide, uniform and restrictive norms on intellectual property rights are merely a device to promote the trade competitive interests of industrialised countries and their transnational corporations, the group of seventy-seven charged Monday.

The spokesman of the group, Luis Luna of Colombia, was speaking at the seventh session of the UNCTAD committee on transfer of technology.

Instead of focussing solely on question of intellectual property protection issues, both in the context of TRIPS and in bilateral and multilateral dealings, industrialised countries should address themselves to the finalisation of the international code of conduct on transfer of technology and on the revision of the Paris Conventions on industrial property, Luna declared.

"TRIPS" is the acronym for one of the items on the agenda of the Uruguay round - "trade-related intellectual property rights".

As a result of UNCTAD initiatives in 1970’s, international negotiations were launched in UNCTAD on the technology code and in WIPO for the revision of the Paris Union Conventions.

Both these remain stalled, mainly because of the opposition of the U.S. and other major industrial countries on issues impinging on the interests of their TNCS.

Technology flows, technology-related policies and the UNCTAD work programme in the area of development and transfer of technology are among the subjects on the agenda of the Committee.

At the outset, the Committee elected Ilija Jankovic of Yugoslavia as its chairman, as also five vice-chairmen (from Chile, Egypt, India, U.K. and U.S.A.) and a rapporteur (German Democratic Republic).

Tributes were also paid to the memory of Diego de Gaspar, deputy secretary-general of UNCTAD and head of the technology division, who had passed away in December.

In a general statement to the committee, the G77 spokesman said that the meeting should be used for a dialogue on the substantive points about technology flows and the policy and legislative responses.

There should also be negotiations on "concrete commitments to revitalise technology flows and improve the legal and policy environment for the development, acquisition and transfer of technology," Luna said.

This was specially urgent and important in view of the role of technology in the smooth functioning of the international trading system and in the realignment of the system in a more equitable manner to alleviate the economic crisis of the third world.

In the 1980’s, Luna noted, there had been a further slowdown in technology flows to the third world - a situation that had already been a matter of concern in the 1970’s.

In its studies on the issue, UNCTAD had used four proxies to assess the extent of the technology flows: trade in capital goods, Foreign Directive Investment (FDI), receipts of royalties and other technology fees, and technical cooperation grants.

But these proxies did not lead to indigenous development of third world countries, Luna pointed out.

There were examples of unsuitable or inadequate transfers of capital goods and conditions attached to such transactions that inhibited the technological development of the acquiring country.

Also, a great part of the transfer through the first three proxies took place between the parent and subsidiary enterprises of TNCS, with only marginal increase of local technological capacity.

Third world countries were now caught in a vicious circle in which externally constrained economic performance discouraged foreign and domestic investments in new technologies and this in turn kept productivity from rising and depressing economic growth.

The situation called for national and international policies aimed at rapid restoration and increase of commercial technology flows by industrialised countries and for alleviation of the burden of national economic adjustments of third world countries who were postponing their technological development and social programmes.

Instead, industrialised countries were implementing, at bilateral and multilateral levels, protectionist policies on intellectual property in order to safeguard and increase their dominant positions in the world market, the G77 spokesman charged.

This trend would progressively lead to concentration of technological and economic power in the hands of the industrialised countries and in favour of their TNCS and state-owned monopolies.

Intellectual property protection should always be in the context of promotion of technological innovation as well as development and transfer of technology.

In dealing with the problems posed by protection of new and emerging technologies, the historical context and standards of intellectual property protection could not be lost sight of and substituted by "new world-wide, uniform and restrictive norms".

The latter would only consolidate existing monopolies and oligopolies in this field, and would take no account of the different levels of economic and technological development of countries.

It was an attempt to use intellectual property protection "as a mere device and instrument for promoting the trade competitive interests of developed countries and their TNCS".

The principles of the universalist multilateral system of industrial property protection (in the Paris Conventions administered by the World Intellectual Property Organisation, WIPO) had been built on time-tested principles including national treatment (whereby WIPO members assure nationals of all member-countries same treatment as to their own nationals).

Attempts to substitute such principles by reciprocity would lead to "unfair perpetuation of the technological gap between the technological haves and havenots and is therefore unacceptable", the G77 spokesman declared.

The spokesman then outlined a multi point programme of concrete and specific actions to promote transfers of technology to the third world. These included:

Firstly, speedy implementation of policies and measures, agreed to in the UNCTAD-VII final act, for improvement in the external economic environment of the third world and solutions to the debt and balance of payments problems of these countries.

Secondly, all aid-financed investment projects should specifically include a technology transfer dimension.

Thirdly, UNCTAD should continue to monitor and analyse trends in technology flows from the point of view of their quality, quantity and impact on development of the third world.

Fourthly, UNCTAD should prepare a comprehensive report on the impact of new initiatives and patterns of intellectual property protection on economic development and trade of third world countries.

The group of governmental experts on economic, commercial and development aspects of industrial property (a subordinate body of the Committee) should be convened to examine such a report.

Fifthly, cooperative arrangements should be established and encouraged between third world and industrial countries, and among third world countries themselves, on joint research and development in new technologies.

Finally, negotiations on the international code of conduct on transfer of technology should be brought to a successful conclusion.

At the same time, the strategy for technological transformation of third world countries (an issue on UNCTAD agenda) should be adopted to provide a useful policy framework for increased transfers of technologies.

Earlier, UNCTAD deputy secretary-general, Yves Berthelot, in opening the session noted that over the last decade rapid technological changes had altered the structures of production and the patterns of international trade.

Technology had become a factor in determining international competitivity, and had some contradictory effects on all countries, and even more so on third world countries.

On the one side, because of the technological changes, there remained the risk that comparative advantage might shift, and this would be prejudicial to the third world countries.

On the other side, the new technologies, if successfully adapted and used in combination with research and development, would enable the third world countries to establish new productions and gain new comparative advantages.

This situation underscored the importance of renewing technology flows to the third world - flows that had stagnated or fallen back, compared to the previous decade.

The new technologies and the changes being brought about had also raised issues of intellectual property protection. In calling for universalisation of protection standards, some of the industrialised countries had also introduced new legislative trends.

These efforts and trends towards protection of technology were taking place simultaneously with the efforts of some third world countries to liberalise their regimes for foreign investment and technology transfers.

These diverse issues, Berthelot added, underscored the need to speedily conclude the on-going negotiations under UNCTAD auspices for a code of conduct on international transfer of technology.

In other comments, Spain speaking for the European Communities complimented the secretariat for its documentation, which appeared "to be more factual and less concerned with ideological issues than has sometimes been the case".

On the reduction in technology flows in the 1980’s compared to the 70’s, the EEC spokesman argued that for some of the third world countries technology flows had reached "rather abnormally high levels at times in the 1970’s and a slowdown in these flows in some cases brings U.S. back to a more normal situation and should not necessarily be considered in too negative a light".

While the EEC would not quarrel with the idea that an improvement in the economic and financial circumstances of third world countries would lead to an increase in volume of technology flows, the issues of general economic performance should be considered more appropriately in other UNCTAD fora.

The Committee should address itself to issues relating to the most effective utilisation of technology flows and the links between use of imported technology and capacity of third world countries to strengthen their indigenous and self-sustaining technological development.

In the EEC view foreign direct investment would hold avoid some of the pitfalls of technology imports by other means. Foreign investors would normally have an interest in ensuring that the technology used was properly assimilated in the host country and was continually updated.

On the legal issues and current international negotiations for legislative framework on technology transfers, raised in the second UNCTAD document before the Committee, the EEC said while the committee could have a general view of the developments in this field, "it would not be useful for our discussions to become directly concerned with specific issues of current negotiations (on the Uruguay round agenda)".

In the Uruguay round negotiations on TRIPS, the EEC has taken an equally hard line like the U.S. and other industrial countries in demanding universal standards and norms through GATT, and for enforcement of such rights of individual holders of such rights through the GATT enforcement machinery.