The Drafting of the TRIPS Agreement

As detailed in Chap. 1, the pre-WTO international trading system did not offer a detailed and universal framework for the protection of intellectual property. Under the General Agreement on Tariffs and Trade 1947 (GATT), provisions relating to intellectual property had been limited and effectively no substantive terms applied (Hoekman and Kostecki 2001, p. 282). However, protection of intellectual property became prioritised by developed countries during the 1980s and 1990s due to their growing reliance on technology. It was consequently an important issue during the Uruguay Round of trade negotiations (1986-94), where it proved to be a divisive issue. Following this key round

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K. Thomas, Assessing Intellectual Property Compliance in Contemporary China, Palgrave Series in Asia and Pacific Studies,

DOI 10.1007/978-981-10-3072-7_3

of negotiations, the WTO emerged as the successor to GATT in 1995,¹ with the TRIPS Agreement at the heart of the new international organisation. The issue of intellectual property protection was first raised in the context of the GATT system at the close of the Tokyo negotiation round in 1979, where the European Community and the United States (US) unsuccessfully tried to obtain an “Agreement on Measures to Discourage the Importation of Counterfeit Goods” (Goldstein 2001, p. 53). Although the Tokyo Round had attempted to move beyond reducing tariffs as barriers to trade to consideration of non-tariff barriers, this shift in focus was taken to new levels in the years following the conclusion of the Tokyo Round.

This new emphasis on intellectual property protection arose as technology started to become more of an important factor in global competition (Correa 2000, p. 3). Developed industrialised countries were becoming conscious of the pressure that newly industrialising nations especially in Asia were beginning to place on their own economic growth. However, initial proposals regarding the inclusion of intellectual property (IP) in GATT negotiations were modest. In the early 1980s, proposals for consideration of intellectual property rights in the multilateral trading system focused almost exclusively on trade in counterfeit goods “because commercial counterfeiting had become such a serious problem for trademark owners in a number of countries” (Bradley 1987, p. 65). Thus, initial consideration of the inclusion of IP protection in the GATT/WTO system was much narrower than the broad scope of the final TRIPS Agreement.

Furthermore, the very inclusion of intellectual property in the scope of multilateral trade negotiations was strongly resisted by some of the larger developing countries such as Brazil and India, who argued that the World Intellectual Property Organisation (WIPO) was the proper forum within which to negotiate this issue (Bradley 1987). However, WIPO was widely regarded as ineffective at enforcing the various treaties it was responsible for, such as the Paris and Berne Conventions, whereas the GATT dispute settlement mechanism was admired as a potentially more efficient tool in enforcing international IP obligations (Jackson 1997, p. 311). These Conventions were also criticised for relying on the principles of non-discrimination and national treatment, rather than providing uniform minimum standards of protection. This meant that if a country did not offer any IP protection to its own nationals, then it was not obliged to offer higher protection to foreign nationals. This lack of pressure on developing countries to introduce effective protection for IP was clearly unsatisfactory to the richer industrialised nations.

In other words, the reasons why the developed countries wished to include intellectual property protection in the GATT system were twofold: first, to subject intellectual property disputes to the multilateral dispute settlement body, and second, to provide uniform standards of protection which all signatories would have to provide. The lack of enforcement provisions in the existing conventions was also seen as a weakness of the international intellectual property system then in force. The Uruguay Round of negotiations, launched in Punta del Este on 20 September 1986, included the issue of intellectual property for negotiation as follows:

In order to reduce the distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade, the negotiations shall aim to clarify GATT provisions and elaborate as appropriate new rules and disciplines. (GATT 1986, p. 7)

Therefore, the scope of intellectual property protection to be negotiated during the Uruguay Round already appeared to be broader than the narrow scope of counterfeit goods originally tabled in the Tokyo Round. From the very outset of the Uruguay Round, there were severe disagreements between developed and developing countries over the direction of the intellectual property negotiations. Australia proposed that the Berne, Paris, Rome and Geneva Conventions be incorporated into the multilateral system—a proposal with which most economically developed countries agreed. On the other hand, India proposed that negotiations be limited to practices that distort international trade—a proposal with which many developing countries concurred (Stewart 1993, p. 2270).

Resistance to the broader scope of TRIPS was not based on resistance to the idea of combating counterfeiting per se, rather it arose from the perception that the proposed TRIPS Agreement would embody “a policy of ‘technological protectionism’ aimed at consolidating an international division of labour” (Correa 2000, p. 5). This “technological protectionism” was perceived as protecting the interests of industrialised countries at the expense of the developing economies and was thus strongly resisted by many of the negotiating powers. Developing countries were concerned that greater IP protection would strengthen the monopoly power of multinational corporations (MNCs), and detrimentally affect the poor by increasing the prices of key medicines and foods (Hoekman and Kostecki 2001, p. 283). It has also been claimed that developing countries never really had a significant part to play in the TRIPS negotiations. According to one commentator, “the negotiations on TRIPS are often said to have begun properly in the second half of 1989, when a number of countries made proposals, or the first part of 1990, when five draft texts of an agreement were submitted to the negotiating group. A more sceptical view is that the negotiations were by then largely over. An even more sceptical view is to say that no real negotiations ever took place. Developing countries had simply run out of alternatives and options” (Drahos 1996, p. 171).

It is certainly undeniable that private actors had a significant role to play in the drafting of the TRIPS Agreement, a public law instrument. For example, the Intellectual Property Committee (IPC) was seen as crucial in the TRIPS negotiations (Sell 2003). The IPC was made up of representatives from major US MNCs and presented a draft text which the negotiators then fine-tuned. Thus, it could be said that the negotiators did not actually draft the full text of the final

Agreement, but rather were heavily influenced by powerful private participants in the shape of the IPC and other lobby groups. Developing countries were concerned that intellectual property protection was only being considered in the context of its commercial effects, rather than for its use in the context of national development (May and Sell 2006, p. 157). Nevertheless, these concerns were sidelined by the developed countries which dominated the TRIPS negotiations.

Indeed, as the Uruguay Round of negotiations progressed, the tensions between developing and developed countries appeared to diminish, whereas tensions grew between industrialised nations, such as the US and the European Community. This was a result of the negotiations moving towards detailed substantive provisions which were not always in congruence with the existing domestic systems of protection (Jackson 1997, p. 312). Whatever the truth about the tensions or otherwise between the countries negotiating the TRIPS Agreement, by a midterm review carried out in 1989, most countries, both developed and developing, agreed that substantive intellectual property protection was desirable and a framework for the TRIPS Agreement be put in place (Goldstein 2001, p. 55).

Furthermore, “by the time of the Dunkel text in December 1991, there seemed to be an enormous change in attitudes, including attitudes of developing countries, which led many such countries to be willing ultimately to accept the IP Agreement as part of the very broad package of the Uruguay Round” (Jackson 1997, p. 311). However, agreement between developing and developed countries, who had initially appeared diametrically opposed, was not reached based solely on the text of the proposed TRIPS Agreement alone. Instead, consensus was achieved through the common negotiating strategy of “linkage-bargaining.” This “occurs when a negotiator offers something of value to a counterpart as a means of convincing the counterpart to offer concessions on matters considered valuable to the negotiator” (Richards 2004, p. 123). In other words, developed countries gained the agreement of developing countries on intellectual property issues by threatening to withdraw concessions agreed in other trade areas of concern to developing nations, such as agriculture. Put simply, the developing countries were subject to pronounced coercion on the basis of expanded market access in return for their acquiescence during the TRIPS negotiations (Sell 2003, p. 9).

This high-stakes negotiating strategy has been heavily criticised, but did lead to agreement overall, which ultimately would not have been possible in single-issue negotiations involving international standards for intellectual property protection. The final text of the Agreement on Trade-Related Aspects of Intellectual Property Rights was signed at Marrakesh, Morocco on April 15 1994 and can consequently be seen as a compromise on the part of the developing countries, in order to receive benefits from other areas of the WTO Agreements. Although the TRIPS Agreement can be seen as a highly significant step in the expansion of IP protection in the global system and is notable on many levels, TRIPS has also been the subject of various criticisms. In contrast to the existing international intellectual property Conventions, the

TRIPS Agreement removes the national autonomy which was used to decide the appropriate level of protection at a domestic level. The TRIPS Agreement instead advances a “one size fits all” approach which “defies both economic analysis and historical experience” (Sell 2003, p. 13).

Furthermore, the stated justification for the TRIPS Agreement has come under fire; the explicit aim of promoting economic development through stronger IP protection is disputed by several studies and the delicate balance between rights-holders and the public interest is tipped firmly in favour of protection. Finally, the TRIPS obligations represent a stark departure from the existing GATT system. Not only was GATT previously focused on trade in goods, but the TRIPS Agreement also contrasts with the Uruguay Round’s aims of deregulation and trade liberalisation by striving for “internationally driven re-regulation” (Sell 2003, p. 15). Moreover, it could be claimed that the controversy surrounding the inclusion of intellectual property protection in the Uruguay round of GATT negotiations has its legacy in the full title of the resulting agreement, “Agreement on Trade-Related Aspects of Intellectual Property Rights,” known as TRIPS. Initial negotiations had limited intellectual property protection to that relating to trade, but the final agreement is so far-reaching that “trade-related” is said to be a misleading title (Das 1999, p. 355). It has even been claimed that “the term TRIPS was invented to make the issue look GATT-relevant, but many economists think it is meaningless because intellectual property cannot be trade- specific” (Dunkley 2000, p. 187). However, as both developed and developing countries conceded that a system of IP protection was a necessary inclusion in the international trading system, this seems an overly critical stance.

The TRIPS Agreement, which resulted from these negotiations, has also been criticised as beneficial only to industrialised nations, whilst detrimentally affecting developing countries. This criticism is based on the notion that the standards of intellectual property protection it expounds are solely suitable for industrialised nations (Correa 2000, p. 5). By protecting technology already established in developed countries and restricting the development of technology in poorer countries, it has been argued that developed countries could increase exports and stifle competition. The TRIPS Agreement has also been criticised for attempting to remove intellectual property protection from the realm of global politics by ignoring the developmental implications for developing nations and redefining it solely as a legal issue (May and Sell 2006, p. 162). Therefore, the TRIPS Agreement clearly had a controversial drafting history and has also been strongly criticised as favouring developed countries over developing countries. The specific provisions of the TRIPS Agreement which resulted from this complex negotiating process will now be considered.