Why renewing the extension for least-developed country members at the WTO makes sense

by Daniel Gervais on Monday, March 11th at 5:23 PM

Should global intellectual property rules be applied to and enforced against the world’s poorest nations?

First, a bit of background. In November 2005, the application of the TRIPS Agreement to the (34) WTO least-developed country members (out of a total of 159 members) was suspended until “1 July 2013, or until such a date on which they cease to be a least-developed country Member, whichever date is earlier.”  In a separate decision made in July 2002, the Council on TRIPS, extended the deadline for the application of certain sections of the TRIPS Agreement for least-developed countries until January 2016 (essentially to deal with pharmaceutical patents).  Least-developed countries are recognized as such by the UN. They are not to be confused with the broader category of “developing countries” which is a self-selected but also negotiated status at the WTO.

The July 2013 deadline for the end of the extension now looming, discussions at the WTO last week (March 5-6, 2013) failed to reach consensus on what to do next. Nepal on behalf of a group of least-developed countries, suggested basically to suspend TRIPS obligations until a country is no longer considered least-developed.   This is reminiscent of the second part of the November 2005 decision quoted from above.    I believe it is likely to pass, but conditions may be attached.

As things now stand, the United States said it might support a further extension but also said that important “details” still had to be agreed upon.   The European Union argued in favor of a fixed deadline rather than the open-ended extension. Australia, Canada and Switzerland wanted to link the decision to ways to bring least-developed countries closer to compliance with their TRIPS obligations. Most developing countries, though not all, seemed to support that request. Members are looking for a consensus on the issue rather than a majority vote.

The need to attach conditions  to an extension is understandable, even if only for “optical” reasons. Then efforts to assist least-developed countries are also part of the WTO’s mandate. However, analyses show that, in aggregate, high levels of intellectual property protection produce few gains and may impose substantial costs on least-developed countries.  As such, a decision to suspend TRIPS would make economic sense, and would avoid the potential political pitfalls of a TRIPS case being filed by one of the WTO richest members against a least-developed nation.


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