Feb 7, 1989


GENEVA, FEBRUARY 3 (IFDA/CHAKRAVARTHI RAGHAVAN)— Basic north-south divisions on intellectual property protection and the scope of negotiations in the Uruguay round on Intellectual Property Rights (IPRS) would appear to have emerged at the day-long green room consultations on this issue at GATT on Thursday.

The consultations are to continue on Monday.

GATT Director-General Arthur Dunkel is conducting these consultations in his capacity as chairman of the official level meetings of the Uruguay round Trade Negotiations Committee.

The consultations are in pursuance of the mandate given to him by the Montreal ministerial mid-term review meeting of the TNC last December. Dunkel was asked to hold such consultations to resolve the deadlock in four negotiating areas - textiles, safeguards, agriculture and Trade-Related Intellectual Property Rights (TRIPS).

The first round of consultations on textiles and safeguards have been held last week and early this week. Consultations on agriculture are set for February 13-14.

At Thursday’s consultations, participants reportedly agreed that the starting point now was the text on trips, with four alternatives, that had been forwarded to Montreal for Ministerial decisions, and which had now been remitted back to Geneva.

The U.S. attempt, with support from Hong Kong and New Zealand, to make an informal paper, prepared at Montreal by Turkish Minister Yusuf Ozal who chaired the consultations in this area, as basis for further work at Geneva, would appear to have failed.

Thursday’s consultations, both in general exchange of views and in discussions structured around various points posed by Dunkel, reportedly brought out that the U.S., EEC, Japan and other industrial nations are persisting in their efforts to use the negotiations to create substantive international norms and standards for IPRS inside GATT and provide for their enforcement.

However this approach reportedly was rejected by most third world participants in the consultations.

At Montreal, western media had given the impression that the opposition was only from Brazil and India.

Thursday’s green room consultations, one participant said, showed that only Hong Kong and South Korea supported the U.S. position.

Brazil, Colombia, Egypt, India, Pakistan, Singapore (for Asian), Uruguay and Yugoslavia reportedly came out clearly and unambiguously that the mandate precluded any such negotiations in GATT.

Chile, Jamaica and Mexico reportedly underscored the stress in the mandate that IPR protection and rules and principles for that should not themselves become barriers to trade.

Several participants, with varying nuances, reportedly made clear that the issues involved were not technical, drafting or tactical, but substantive ones involving philosophic and systemic issues about development and industrial policy and even the world economic order, as well sovereignty of states and the nature of GATT.

After some general discussions, the discussions reportedly are being structured around several points formulated by Dunkel as arising out of the discussions and various formulations.

The points formulated by Dunkel reportedly were under seven headings: basic GATT principles, enforcement, standards and norms, dispute settlement, transitional arrangements, clarification of GATT rules and counterfeit trade.

Brazil reportedly said that the formulations by several third world participants, in the text forwarded to Montreal and now remitted back, remained fully valid. The three other alternatives proposed by various industrialised countries went beyond the mandate and sought to reopen questions of GATT competence.

The mandate, Brazil reportedly reminded, was the result of long negotiations and carefully worded to take account of the different and diverging interests of all Contracting Parties (CPS).

At Punta del Este, when the declaration was adopted as a decision of the CPS, Brazil had made clear that substantive matters relating to intellectual property was within the competence of WIPO.

(The record of the Punta del Este meeting, issued as a restricted GATT document, shows that others who made similar reservations and statements were Cuba, Peru, Nicaragua and India. none of the industrialised countries spoke on the issue).

The first part of the negotiating mandate, Brazil reportedly underscored, made clear that the negotiations "shall clarify" if GATT provisions were sufficient to ensure that measures to enforce IPRS did not become barriers to legitimate trade.

If necessary, new rules and disciplines were to be elaborated with the same objective in order to reduce distortions and impediments to trade.

The basic principles of protection were not of a commercial nature and could not be addressed in GATT, but only in competent organisations with legal mandate and technical competence.

There was nothing in the mandate linking "trade" and "intellectual property", and the negotiating group had no authority to discuss elaboration of rules on patterns of protection or coverage of sectors subject to protection.

Intellectual property matters, by definition, had a wider meaning than commerce or trade, and approaching the issue from a purely trade viewpoint would risk distorting patterns of industrial production, trade, investment and development as a whole.

The century-old international system for intellectual property protection, administered by the WIPO, was based on the philosophy of respect for national diversity and sovereignty. It gave each country the right to apply the common principles in the international convention in a way that would serve its national economic, social and development interests.

The basic principles of protection were not of a commercial nature and could not be addressed in GATT, but only in competent organisations with legal mandate and technical competence in the area.

The international protection of IPRS, which were generally accepted legal rights of private ownership of an invention or artistic creation, was not on absolute right but one created by the state.

This was done after taking into account many considerations access to information, prevention of monopolies, growth of literature, art and science, attainment of development goals and spread of knowledge.

A balance of rights and obligations were established for the owner of the IPR and the society that gave such a right. A patent was "an exclusive privilege", granted by the government in public interest, to encourage inventions, disseminate knowledge and promote economic and social development of the country.

The negotiating group had done little work on counterfeit goods - an issue where real harm could be caused to trade interests covered by GATT obligations and where the mandate was clear and specific.

But while there was an "undisputed mandate" in this area, it was not being carried out because of "a doubtful strategy" of some participants who were trying to impose their own interpretation of the mandate which was justified neither by the words nor the logic of the compromise formula and its history.

The blame for losing time in the negotiations and for not making progress should be laid at the doors of those trying to modify the mandate.

Indian delegate Srirang P. Shukla who, with Brazil's Paulo Nogueira Batista, had personally negotiated the compromise at Punta del Este with the U.S. and EEC, reportedly outlined the negotiating history to show that substantive issue of norms were precluded.

The original formulation (in the Swiss-Colombian paper, favoured by the U.S.) had accepted that distortions and impediments to international trade arose from lack of adequate and effective protection of IPRS.

The paper had said that in order to reduce them, "the negotiations shall aim:

--To promote a more effective and generalised application of existing international standards in intellectual property matters,

--To ensure that measures and procedures to enforce IPRS do not themselves become barriers to legitimate trade, and

--To clarify and elaborate rules and disciplines with respect to these matters".

But the relevant portion of the compromise text that ultimately emerged said that in order to reduce distortions and impediments to international trade and "taking into account" the need to promote effective and adequate protection of IPRS and to ensure that measures and procedures for this did not themselves become barriers to legitimate trade, "the negotiations shall aim to clarify GATT provisions and elaborate as appropriate new rules and disciplines".

Against this negotiating history, it was not possible to interpret the mandate as requiring creation of substantial international norms and standards in GATT or to secure their enforceability through GATT dispute settlement mechanisms and principles.

At Punta del Este, at the Contracting Parties’ session, India had made a clear statement putting on record its view of the mandate, and no one had challenged it.

The mandate had also clearly affirmed the specific jurisdiction of WIPO, India reportedly pointed out.

But this was not a question of WIPO vs. GATT, but something more fundamental, namely, whether the nature of GATT as a trading system was being changed.

Yugoslavia reportedly said that everything, almost every activity in countries - economic, social, cultural and political - had trade effects. But that would not vest GATT with any jurisdiction in these matters.

Singapore reportedly said that prescribing norms and standards in intellectual property were matters of national sovereign rights of countries and could not be dealt with in GATT or the Uruguay round.

Also, the initiatives in WIPO in these areas could not be prejudged by the GATT negotiations.