Minutes - TRIPS Council - View details of the intervention/statement

577.   Thank you, Chair, for your tireless efforts in helping us to reach this consensus. South Africa maintains its support for the LDC extension. Article 66.1 of the TRIPS Agreement recognizes the special needs and requirements of LDCs. It states that, "The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period." The text is obligatory – in other words, once requested by LDCs, the TRIPS Council shall grant the request. 578.   This delegation has been in support of the LDC proposal, as entailed in IP/C/W/668, based on the vast challenges facing LDCs, recognition that their developmental challenges continue postgraduation, the need for predictability and the need for an outcome that truly promotes development. An extension period beyond graduation is not an unusual mechanism and many examples exist in various contexts. For example, the UN Report of 2021 dealing with the impact of COVID-19 on LDCs reveals that, "the European Union currently continues to grant duty-free quota-free market access for three years after graduation, while countries such as Australia and Canada often provide even longer periods." 579.   Technology acquisition and absorption is a critical feature of industrialization and economic development. Hence, a key objective of the transition period is to allow LDCs space to develop a viable technological base. This is supported by Article 15(1)(b) of the International Convention on Economic, Social and Cultural Rights (ICESCR) which unequivocally provides that the right to the benefits of scientific progress and its applications must be enjoyed by all without discrimination. 580.   Document IP/C/W/668 submitted by Chad on behalf of LDCs aptly observes that the high degree of vulnerability from which the LDCs suffer, both to economic and climate shocks, has caused significant setbacks to progress towards sustainable development and the attainment of the Sustainable Development Goals (SDGs). In addition to pre-existing challenges, LDCs have been severely impacted by the COVID19 pandemic. The pandemic is expected to slow down or even reverse some of the gains made in the realization of the SDGs, as indicated in the Sustainable Development Goals Report 2020. According to a UN Study, "The COVID-19 pandemic not only threatens to throw LDCs back many years in achieving SDGs on poverty, hunger, health and education, but it also exacerbates inequalities, further jeopardizing the achievement of SDG5 on gender equality and women's empowerment, as well as SDG10 on reducing inequalities." 581.   As a result, the efforts of LDCs at building a viable technological base and reaching a level of development that would allow them to fully benefit from the IP system as envisaged in Article 7 of the TRIPS Agreement have been curtailed. Article 66.1 of the TRIPS Agreement enjoins this forum to extend the LDC waiver upon duly motivated request by an LDC Member. In our view, document IP/C/W/668 clearly constitutes such a duly motivated request. In addition, the LDC Group has shown a great degree of flexibility in revising the duration of the proposed extension to 1 July 2034 as indicated in document JOB/IP/46. 582.   Aside from the TRIPS Agreement placing a positive obligation on this forum to extend the waiver in the current circumstances, South Africa is of the view that it is plainly the right thing to do. If we cannot deliver concrete outcomes that work in the interests of LDCs, it will undermine the credibility of this institution. The COVID-19 pandemic calls for a developmental approach to issues, especially those impacting the most vulnerable Members. We therefore support the current transition period extension and request and call upon all Members to engage constructively on the issue of LDC graduation within the context of the General Council.
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.