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Negotiating the TRIPs Agreement: India’s experience and some domestic policy issues

Negotiating the TRIPs Agreement: India’s experience and some domestic policy issues

One of the most contentious issues discussed in the Uruguay Round of multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT), was that on intellectual property rights (IPRs), which resulted in the Agreement on Trade Related Intellectual Property Rights.

There were several reasons and among them the fundamental one was that a binding international agreement on trade-related IPRs creates monopoly power in the hands of a few and goes against the main goal of the multilateral trading system, i.e. trade liberalisation.

It is this issue, which has found many economists condemning the inclusion of TRIPs under the World Trade Organisation (WTO), which has been best expressed by the noted trade analyst, Professor Jagdish Bhagwati: “We are now using the GATT for the collection of royalty payments, which is not a mutual-gain transaction. In so doing, we have abandoned or diluted a very attractive philosophical basis for organising the GATT – the idea that trade is mutually beneficial to all contracting parties and that therefore all parties should liberalise.”

Actually the issue of IPRs is situated at the World Intellectual Property Organisation, but the provision of a strong dispute settlement system and the single undertaking nature of the WTO acquis have been found to be a haven for IPR holders to seek rents from their exclusive rights.

That said, a common fallacy regarding the inclusion of IPRs into the WTO was pharmaceutical (and other) companies’ claim that intellectual property has the same status as their tangible property. An essential characteristic of tangible property is the right to exclude other people from its use. However, the last thing creators and inventors want to do is to keep their creations and inventions to themselves. They want to promote them and want recognition, not money alone. The interests of companies in businesses related to creation and invention are different from the interests of creators and inventors themselves. Such companies want to build wide-ranging commercial monopolies, and to exploit the protection offered by intellectual property rights for that purpose.

On the other hand, the public interest lies in ensuring that there is as much innovation as possible, that it happens quickly, and that it is disseminated widely. We need to provide incentives to innovate without allowing a previous generation of innovators to intimidate competition, block entry, or restrict the exploitation of new technologies. That means a balance needs to be struck and the solution lies with the companies. For example, in the case of making the benefits of pharmacology available to those affected, of whom the majority is poor, the pharmaceutical industry must establish mechanisms for making drugs available at low prices in poor countries. 

The TRIPs Agreement recognises the right of countries to take protective action to ensure the availability of cheap medicines, and this fact was reiterated at the Fourth Ministerial Conference of the WTO at Doha. However, this is not enough. The issue of a threat to the food security of people due to the monopolistic behaviour of multinational seed producing companies is a potential for future debates.

In this paper, the writer, Julius Sen, Tutorial Fellow of the London School of Economics and Political Science, UK shows particularities about the subject that distinguished the TRIPs negotiations from the other agreements that make up the Uruguay Round results, and therefore analysed the way in which the TRIPs Agreement was actually negotiated and handled.

The author finds that many of the lessons that can be drawn from India’s experience with the TRIPs negotiations are the same as those that can be drawn from the negotiations more generally and true for many other countries. It goes beyond a narrow analysis of events relating strictly to the negotiations during the Uruguay Round and looks at the negotiating context in which these negotiations took place.

The research findings draw lessons from what actually happened and suggests how policy processes can be reformed and reorganised to address the negotiating requirements in dealing with such issues in future.

The paper was not intended to criticise India’s failure to strategise and negotiate properly during the Uruguay Round, but to learn from the past mistakes so that countries are better prepared for future negotiations at the WTO. It could not have been published at a more appropriate time than just after the Fourth Ministerial Conference of the WTO, which mandated the WTO Members to start preparations for negotiations on a number of new issues.  

Thus, the paper has acquired larger significance and would provide some valuable insights towards better negotiating strategies in future. Our efforts would be better accomplished if trade negotiators make use of this research and acknowledge its importance. It is our pleasure to publish this under our research report series, and we would like to thank Julius Sen for his contribution. Comments and queries, if any, may please be sent to us or directly to the author at: j.sen@lse.ac.uk 

The opinions expressed in the paper, and any errors of fact or interpretation or omission are the responsibility of the author, and do not reflect the agreed policy positions of the publishers or the commentators or the organisations with which they are associated. The Report is published under the South Asian Civil Society Network on International Trade Issues (SACSNITI) Project, supported by the International Development Research Centre, Canada. Any reproduction in full or part must indicate the title of the paper, name of the publishers as the copyright owner, and a copy of such publication may please be sent to the publisher.

To obtain a copy/copies of the Report, please write to: cuts@cuts.org (Suggested Contribution: Rs.100/US$25)

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