Bangladesh

14 EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 66.1 OF THE TRIPS AGREEMENT FOR LEAST DEVELOPED COUNTRY MEMBERS

423.   My colleague, the LDC Coordinator from Chad, has well explained the context and the continued challenges of the LDCs. Let me provide a few more points. 424.   Article 66.1 of the TRIPS Agreement has affirmed that ''The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period. 'It may kindly be noted that the text does not specify the total period that the LDCs may further request for the extensions. On the other hand, submitting the duly motivated request by the LDCs is the only requirement according to the mandate of this Article. 425.   Therefore, the LDCs have assessed their needs and challenges and submitted this duly motivated request at the TRIPS Council seeking extension for the total period for as long as a country remains in the LDC category and a few more years after graduation to address their needs and challenges. There is no legal barrier in making such a request as stipulated in Article 66.1 of the Agreement. The LDC Group has submitted this request eight months back, on 1 October 2020, much ahead of the expiration of the current transition period on 1 July 2021. 426.   In the past, the TRIPS Council extended this general transition period on two occasions. In both instances, a specific number of years of a short length was decided without any assessment or justification (i.e. seven years and six months in 2005 and eight years in 2013). The LDCs, with small delegations, are again struggling now with the same issue. It means that the length of both extensions in the past was impractical. 427.   The LDCs have been continuously engaged with Members for a positive outcome on this submission. During the last eight months, the Group has received support from a large number of Members. 428.   With the initiative of the TRIPS Chair, the LDC Group has also informally consulted some Members. We are grateful to colleagues of those delegations for their collegiality and good spirit during our discussions. To understand their concerns and to know their specific positions on this issue, the LDC Group also has asked them four sets of questions; but the Group has not received any precise response. During the discussions those Members have only emphasised that a timebound extension would be practical. However, they have not yet made any specific proposal on any specific length or period. In addition, there is a suggestion to remove the "post-graduation element" from the submission. 429.   The LDC Group has carefully reviewed their suggestions and requested considering the following two points:  First, evidence shows that a decision building on past practice does not help in this regard. Otherwise, the LDCs would not be seeking a third extension now. As long as the LDC challenges recognized in TRIPS Article 66.1 are in place, and the need for flexibility to create a viable technological base is relevant, the LDCs will be in continuous need of extensions of this transition period. And it is most likely that these challenges and needs will be there as long a country remains in the LDC category and for a few more years after graduation.  Second, particularly after the outbreak of the COVID-19 pandemic, the LDCs are the hardest hit. Therefore, the length of extension should also consider the new circumstances. 430.   Let me also take the opportunity to explain again why the post-graduation extension is relevant in this Council. We all agree that the application of TRIPS provisions is severely challenging. It requires putting in place the necessary legal framework, institutions and other infrastructures. This was the logic behind adopting this transition period in the first place. 431.   When TRIPS was negotiated, WTO Members were given initial transitional periods depending on their development status. In spite of having had strong IP regimes for over a hundred years prior to the TRIPS Agreement, developed country Members required a one year transition period for the application of TRIPS provisions. Likewise, all developing countries were given a five year transition period. An additional five years on the issue of specific product patents for the same purpose was also given to many developing countries. 432.   It is reasonable that LDCs, after their change of their status, that is after graduation, will need some extra time to address their transitional challenges regarding the application of TRIPS provisions. 433.   We can also explain the issue referring to the already graduated countries. Since the creation of the LDC category in 1971 by the United Nations, todate only six countries have graduated from the list. Botswana graduated in 1994, before the establishment of the WTO. The following are the graduation years of the remaining five countries: Cabo Verde in December 2007, Maldives in January 2011, Samoa in January 2014, Equatorial Guinea in June 2017, and Vanuatu in December 2020. 434.   Can anyone now prove that these five countries sufficiently could address their TRIPS applicationrelated needs and challenges immediately before or after their graduation from the LDC category? Or could any of these five countries create a viable technological base in their countries before graduation? The answer is negative. This means that the support measures for technology transfer through TRIPS Article 66.2 and technical cooperation through Article 67 did not sufficiently work for these countries. Therefore, the remaining LDC Members must need the continuation of this policy space under Article 66.1 for a sufficiently longer time if we really want their meaningful integration into the international trading system, particularly in the context of TRIPS. 435.   Any issue related to TRIPS has to be first discussed in TRIPS Council and the TRIPS Council would either take a decision or make a recommendation to the General Council. The LDC Group's proposal on the transition period regarding the application of the TRIPS provisions for the LDCs after graduation, as provided in this submission, merits discussion in the TRIPS Council. If some Members do not want to discuss this in the TRIPS Council, it means that they want to follow the past practice of providing a number without justification, instead of a meaningful transition period for the LDCs. 436.   On 4 June 2021, during the open-ended informal TRIPS Council meeting, we provided a summary of the responses on the issues raised by some Members. With your kind permission Chair, we request the Secretariat to include the following issues and our responses in the present meeting records: a. An extension of the transitional period without a time limit, as proposed by the LDC Group, would slow down the process of gradually integrating LDCs into the multilateral trading system. 437.   On this issue, the LDC Group wants to clarify that the LDCs do not ask for an unlimited time period. Every LDC will graduate, therefore the request is not for an unlimited period. And a specific time after graduation has been proposed, which is also not unlimited. The transition does not exempt the LDCs from the provisions of Articles 3, 4, and 5. It means the LDCs are not completely exempted from all obligations of the TRIPS Agreement. Getting a longer extension will not slow down the LDCs' integration into the multilateral trading system. Such a step with congenial policy space will motivate LDCs to gradually improve their national conditions and their progress in social, economic and technological development. b. A certain level of intellectual property rights (IPR) protection and enforcement is beneficial to LDC Members, because IPRs are a catalyst for innovation and an important tool for sustainable development. 438.   On this, the LDCs think that as long as the recognized challenges of the LDCs are in place, they will never be able to apply the provisions of TRIPS. Only having IP laws or some IP-related policies does not guarantee TRIPS enforcement. That involves resources and capacities to implement, administer and enforce TRIPS-compliant IP laws through well-coordinated and efficient management, including specially trained judges, lawyers, police, customs officials, administrators, inspection services, information systems, data management, border management, etc. The LDCs as a whole lack these prerequisites. There is no economic evidence that LDCs at their initial stage of industrialization benefit from strong IP protection. The LDCs are not a target market for innovative and creative owners of IPRs to commercialize their latest technological innovations or creations that would call for the protection of IPRs, and this will continue to be the case for a long time. At the current stage of their development, LDCs will not benefit from IP protection and they must be exempted from the application of TRIPS provisions until they have a strong and viable technological base. c. The LDCs' request for an additional period of 12 years exemption, calculated from the date an LDC Member graduates from the LDC category, appears to go beyond the scope of Article 66.1 of the TRIPS Agreement. 439.   On this issue, the LDCs find that there is no legal bar in the text on the length of the extension. The text does not also clearly say whether the TRIPS Council can accord such an extension that may go beyond LDC status, to meet the present and future needs of the LDCs. It means that the determination of the length of the extension depends on Members. And the Members should do such a favour for the LDCs, considering their continued vulnerability, their negligible share of global trade (less than 1%), and the special circumstances prevailing after the outbreak of the pandemic. d. It should be noted that the request for an additional period of 12 years exemption from the date an LDC Member graduates from the LDC category is included also in the communication on smooth transition. 440.   The LDCs want to clarify that this is exactly not the case. At the WTO General Council (GC) the LDCs have submitted a Ministerial draft decision (WT/GC/W/807) that proposes to allow LDCs specific available flexibilities and support measures after graduation to support their smooth transition for 12 years. On the other hand, the TRIPS Council has not yet decided the extension requested by the LDCs. Therefore, at this moment no link has been established between the two submissions. The submission at the TRIPS Council should be considered on its own merit under the provision of Article 66.1 of TRIPS. 441.   As the way forward, the LDCs are ready to discuss any proposal of any proposed length that can sufficiently address the needs and challenges of the LDCs. Therefore, we request you to consider the following two points:  Members who do not agree to the LDC Group's proposal may please suggest a specific time as an ideal length that they think is good. We also request our partners to note that the LDCs are the hardest hit by the ongoing pandemic, which has posed severe uncertainty for the recovery of their economic and social progress achieved in recent years, including in terms of poverty and social outcomes. Those Members may please consider the new circumstances while suggesting the length of the next extension. Only copying from the previous decisions will not help in this context.  The issue of TRIPS application challenges for the LDCs after graduation is, of course, an integral part of our proposal. We request a discussion of this issue here, and including this part, Members can agree to accord the extension as requested by the LDCs. Otherwise, as an alternative, if Members agree that this issue should be additionally endorsed by the General Council, here in the TRIPS Council we may approve and recommend that issue to the General Council. There are previous instances of approving and forwarding such recommendations to the General Council from the TRIPS Council. 442.   We believe that in WTO reasons prevail over pre-conceived ideas and scholastic biases. We also trust that Members will take a favourable decision for the LDCs by allowing a reasonable, meaningful and effective transition period before the current transition period expires. The LDCs are ready to constructively engage as and when required.

62. The Chair recalled that the general transition period for least developed country Members had been extended twice, most recently by the TRIPS Council decision IP/C/64 of 11 June 2013, and was currently set to expire on 1 July 2021 – in less than one months' time. With respect to extensions of this period, he noted that the second sentence of Article 66.1 of the TRIPS Agreement provided that "The Council for TRIPS shall, upon duly motivated request by a least developed country Member, accord extensions of this period."
63. He also recalled that, under a parallel decision concerning specifically pharmaceutical products, the Council had extended the transition period for LDC Members until 1 January 2033 or until such a date on which they cease to be a LDC Member, whichever date is earlier. During this period, LDC Members concerned were not obliged to implement or apply the sections of the TRIPS Agreement regarding patents and the protection of undisclosed information, nor to enforce rights provided under these sections, insofar as pharmaceutical products were concerned.
64. He reminded the council that the LDC Group had circulated its request for an extension in document on 1 October 2020. After having held consultations, at the formal meeting of the Council in March, his predecessor had shared her impression that (1) delegations were in principle favourable to extending the transition period for LDCs, that (2) some delegations had expressed a preference for extending the period for a limited number of years, and that (3) others had raised additional questions on how the request for a transition period for graduated LDCs related to Article 66.1. At that meeting, the Council had requested the incoming Chair to hold consultations on this matter.
65. He said that, since March, he had been in touch with the LDC Group coordinators and a number of delegations in various formats. At the request of the LDC Group he had held a series of intensive consultations with the LDC Group coordinators and five developed country delegations which the LDC Group had identified.
66. Based on the interventions by delegations in these consultations, it was his reading that there was broad willingness to grant an extension of the transition period for LDCs on the basis of the 2013 decision. However, regarding the request for additional years of transition after graduation of LDCs there were more questions – and it was the view of a number of delegations that such a request was not covered by the Council's mandate in Article 66.1.
67. Given that the LDC transition period expires on 1 July of this year, and – according to the UN Department of Economic and Social Affairs website – the next LDC graduations of WTO LDC Members were not expected before 2024, it had seemed to him that the most immediate – indeed, pressing – issue was the extension of the transition period for those Members that are currently LDCs under Article 66.1. This affected their status already next month, whereas the status of graduating LDCs would not be a practical issue for at least three years.
68. In light of this scenario, and as a pragmatic approach to address the most pressing issue first, he had suggested during the consultations that these two issues could be discussed separately. He had proposed that delegations could first work towards a decision on extending the LDC transition period under Art. 66.1 based on similar terms as in 2013, so that such a decision could be adopted at present meeting of the Council.
69. As regards the question whether members should be granted additional years of a transition period also after graduation, he had suggested that this could become the subject of a focused discussion – in the TRIPS Council or elsewhere – where the systemic issues Members had raised in this regard could be addressed more broadly, and with a somewhat longer time horizon.
70. He said that his suggestion had, however, not been taken up by delegations, and the LDC Group had requested an informal open-ended meeting of the Council on this subject which was then organized on 4 June 2021.
71. At that meeting, Members had had an opportunity to exchange views and listen to each other’s concerns. His assessment was that the meeting had confirmed that agreement on extending the transition period for LDCs was within reach, even if the question of duration remained to be solved, while disagreements remained over the proposal to extend the transition period beyond graduation.
72. In short, he said, Members had not been able to make as much progress as he had hoped when he had briefed Members on the consultations on 30 April 2021. His objective had been to have a basis for a decision to be adopted at this Council meeting. Given that this had not been possible and given that the current transition period will expire in three weeks from now, he encouraged delegations to share their thoughts and suggestions on how the Council could possibly address this issue.
73. The representatives of Chad on behalf of the LDC Group; Bangladesh; Tanzania on behalf of the African Group; Nepal; Senegal; Angola; Chile; Uganda; Vanuatu; Pakistan; Malawi; Mongolia; India; Myanmar; Argentina; Brazil; Mozambique; China; South Africa; Australia; Norway; the United States; Canada; Switzerland; Japan; the European Union; the United Kingdom; Turkey; Togo; and Zambia took the floor.
74. The Chair suggested to keep this agenda item open with a view to reconvening the meeting as appropriate when delegations were ready to take a decision on this item.
75. The Council took note of the statements made and agreed to keep the agenda item open.
76. At the Council for TRIPS reconvened formal meeting of 29 June 2021, the Chair proposed that the Council adopt the "Draft Decision on the extension of the transition period under Article 66.1 for least developed country Members", that had been circulated in document JOB/IP/46 on 25 June 2021. He recalled that this decision had been discussed in small group consultations in the previous week, and had been briefly introduced at an informal meeting of the Council the same afternoon, where Members had also been briefed on the consultations that had led to this agreement. In light of those discussions, he suggested that the Council adopt the decision as contained in document JOB/IP/46.
77. The Council so agreed.
78. The Chair thanked all delegations for their good faith efforts to find a solution to this matter in time before the current transition period expired the following day. He also shared his understanding that the question whether newly graduated LDC members should be accorded additional flexibilities under the TRIPS Agreement after their graduation had not disappeared. It was his understanding that the LDC Group and certain delegations agreed in their contacts that this post-graduation element of the request would best be pursued under the LDC proposal already on the agenda of the General Council. He encouraged all delegations to engage in that discussion constructively and in good faith.
79. The representatives of Chad on behalf of the LDC Group; Bangladesh; the United Kingdom; Nepal; Tanzania on behalf of the African Group; Afghanistan; Malawi; the United States, Japan; Switzerland; Togo; Canada; China; Mauritius; the European Union; Korea; India; Myanmar; Mozambique; South Africa; Australia; the Central African Republic; Egypt; and Pakistan took the floor.
80. The Council took note of the statements made.