230. Brazil as Venezuela, are co-sponsors of document IP/C/W/385. In this regard we share some of the same views, but at the outset I would like to thank the delegation of the United States for its efforts in preparing document IP/C/W/599 aimed at clarifying its position on the application of non-violation and situation complaints to IPRs. The document seeks to provide answers to questions raised since the beginning of this debate. My delegation are co-sponsors, alongside 13 other countries of document IP/C/W/385 and for this reason we were pleased to see our document referenced in the US submission on pages 1, 5, 7 and 8. Document IP/C/W/599 seeks to clarify five concerns raised by our submission. I will try to address these elements.
231. A first element is that in the view of the United States the TRIPS Agreement does not differ from a market access agreement. Unlike the GATT and the GATS, the TRIPS Agreement does not involve an exchange of concessions. It remains unclear how non-violation complaints would apply to minimum regulatory standards that protect private property rights. While IPRs may, in some cases, facilitate international trade and investment, the obligations contained in the TRIPS Agreement cannot be characterized as market access concessions in the same way as obligations under the GATT or the GATS. The results of WTO market access negotiations are recorded in the respective GATT and GATS schedules but not in the TRIPS Agreement. Indeed, in some cases, IPRs may undermine market access. Article 8, for example, explicitly notes that domestic measures may be needed to prevent the resort to practice which unreasonably restrain trade. That that remedy has been applied under the GATT does not render it appropriate for the TRIPS Agreement.
232. A second element is that the United States does not believe that the availability of non violation measures will raise systemic concerns. As part of a second undertaking, WTO obligations apply cumulatively and so a measure consistent with one WTO Agreement, for example, the GATT, can still be found to nullify an impaired benefit under another, for example TRIPS. Similarly, the response that Article 3.2 of the Dispute Settlement Understanding will prevent the Dispute Settlement Body from adding to or diminishing the rights and obligations under existing WTO Agreements begs the question and fails to recognize that applying non-violation complaints to the TRIPS Agreement amounts to establishing a new call for action under the TRIPS Agreement. In the absence of clear arguments to the contrary, the concerns that non-violation complaints may give rise to incoherence among WTO Agreements remains.
233. A third element is that the United States understands the availability of non-violation complaints to protect Members from intentional evasions of obligations under the TRIPS Agreement, while preserving the ability of any Member to implement social, economic development, health, environmental and cultural policies. Following the text of the United States, because there are a number of ways to implement social and cultural policy goals, a Member may take this element of non-violation complaints into consideration when crafting measures to protect these goals.
234. Non-violation complaints would require one WTO Member to compensate another for measures that adversely affect foreign holders of IPRs and that were not foreseen during the Uruguay Round. Such an approach would arguably cover a range of domestic measures that may also undermine the Agreement's flexibilities, including in the area of public health, and could affect the enjoyment of WTO Members' sovereign rights to develop new laws to protect public interest.
235. We also note that unlike the GATT and the GATS, the TRIPS Agreement fails to protect measures designed to achieve important national policy goals, such as health or the environment through a general exception. These measures are likely to be placed at a further disadvantage if open to challenge from non-violation complaints.
236. A further element of the US document is that the good faith application of the Agreement's provisions will not in all circumstances fully protect Members in the same way that the availability of non-violation complaints will.
237. Brazil considers that non-violation complaints are not the best way to protect benefits arising from the Agreement. We have yet to hear arguments why the provisions of the TRIPS Agreement are not sufficiently flexible to address the concerns raised by Members who support such a remedy. We believe that, rather than on relying on the legally imprecise notion of non-violation, a focus on the text of the Agreement supported by other principles of international law, is the preferable approach. According to Article 3.2 of the DSU, one of the purposes of the dispute settlement system is to clarify the provisions of the Agreement covered by the DSU, in accordance with the customary rules of interpretation of public international law. According to Articles 26 and 31 of the Vienna Convention, all treaties must be interpreted in profound and good faith. These principles of international law already require the bona fide reasonable application of the TRIPS Agreement by all WTO Members. This requirement is sufficient to guarantee any benefits embodied in the TRIPS Agreement and obviates the need for a recourse to the legally imprecise and uncertain notion of non-violation complaints.
238. A fifth element raised is that according to the US document, GATT panels and the Appellate Body have conducted analyses that provide appropriate guidance on the applicability and use of non-violation complaints. Where additional questions remain, according to the US paper, dispute settlement continues to be the mechanism to further clarify provisions of the covered agreement, including Article 64.
239. In our understanding, applying non-violation complaints to the TRIPS Agreement introduces legal uncertainty that may exacerbate the difficulty faced by WTO Members when responding to the claims of other Members. The number and complexity of claims facing WTO Members are likely to increase, making it more difficult for them to defend their interests against challenges by more powerful Members. It may also be argued however, that the traditional requirements, as well as GATT practice, do not provide a clear indication of how the remedy will play out in the TRIPS context. Already, the potential for bringing non-violation complaints has been cited in a number of bilateral consultations concerning IPRs and so the views that the remedy would not give rise to an influx of complaints should be viewed with extreme caution.
240. In the light of the discussions today and the points raised by the US document, our position remains unchanged. We consider that non-violation complaints should be deemed inapplicable to the TRIPS Agreement.
