TRIPS has been controversial from the start. Developing countries and advocates for the ‘intellectual commons’ are of the view that TRIPS jeopardizes developing country access to knowledge and essential medicines that are critical to their well-being and growth.[ii] In contrast, some developed countries, in particular the US, are of the view that TRIPS did not go far or fast enough in establishing a global IP regime: the US is pushing developing countries to accept standards that go further than TRIPS in the bilateral and regional free trade agreements that have flourished as WTO negotiations have stalled.[iii]

The developing countries have legitimate concerns. They are net technology importers and must thus establish and maintain IP systems which will be of little benefit to them in the short term, while reducing their access, on affordable terms, to necessary technology and drugs. The question thus becomes: How did TRIPS come to be adopted? While there is no single or simple answer to this question, Drahos and Brathwaite, in their article Who Owns the Knowledge Economy: Political Organizing Behind TRIPs[iv] offer one insightful, if sobering explanation.

Drahos and Brathwaite argue that TRIPS was adopted by members of the WTO as a result of a failure of democratic processes. On the one hand, a small group of IP industry leaders successfully convinced the US, the EU and Japan, the dominant patent-holding countries, to adopt stronger IP rights as the central element of their trade agenda.[v] On the other hand, developing countries lacked IP expertise in trade negotiations, they were largely absent from the IP negotiations, and they lacked bargaining power in the face of US trade sanctions and the US-EU-Japan block. Compounding this problem was the fact that the movement to protect the intellectual commons was still under-developed. Where it existed, it was scattered and under-resourced.

The authors set this struggle over intellectual property rights in its modern context. While patent systems were initially designed to confer benefits on inventors, multinational corporations have become the dominant holders of IP rights. IP rights confer monopoly benefits on multinationals. Knowledge based corporations use the power conferred by IP rights to establish ‘knowledge cartels’ to control the use of their patented knowledge, to control the supply of patented products, and to set high prices for their products, which include drugs. They justify the price as reflecting their discovery and development costs.

Once these patents expired and generic manufacturers produced drugs far more cheaply, drug companies expanded into developing country markets as part of their growth strategy. The fact that these countries offered little or no IP protection at the time did not matter because these countries did not have the knowledge capacity to reproduce patented goods. However, as developing countries such as India and Brazil gained technological expertise, they were able to manufacture, far more cheaply, products such as drugs which they and their neighbouring countries urgently needed. Developed countries began to question the costs of drugs in their markets, and thus the relationship between patents and prices. Drug makers saw their market share beginning to erode and, more importantly, their IP asset base threatened.

Drahos and Brathwaite argue that this was the motivating factor that led Pfizer, IBM and other IP-reliant corporations to effectively mobilize their industries and lobby the US (and ultimately the EU and Japanese authorities). Their message was simple: American knowledge and inventions were being stolen by countries which did not have strong IP protection regimes. Widespread adoption of US-style IP protection was necessary to protect American jobs and wealth. The US government ‘bought’ the message, and ultimately compelled developing countries to adopt their IP agenda through the strategic use of unilateral trade threats and sanctions, bilateral agreements, and the WTO.  Despite certain differences in their point of view, the EU and Japan supported the adoption of an ‘international IP code’.

Some developing countries, including India, resisted. However, India’s absence at several critical meetings, and the relentless pressure of key developed countries, meant that the interests of corporate IP holders, now adopted by their governments, prevailed. Drahos and Brathwaite are of the view that, while transnational activism against the use and extension of IP rights has developed, this activism may be too isolated to “force governments to design IP rights that serve the welfare…of citizens.”[vi]

The authors are correct to emphasize the need for concerted efforts. Their cautious outlook is justified by accounts of how poorly TRIPS is suited to developing country needs, and by accounts of how the developed world is continuing to push for enhanced IP rights.[vii] Nonetheless, there are some reasons for hope. Sell and Morin outline how NGOs and developing countries are using discourses of bio-piracy, fairness and access to medicines to successfully restrain TRIPs.[viii] Commentators are turning their attention to how TRIPs can be made to work for developing countries.[ix] De Beer and Harris argue that developing countries are exercising their growing clout and improved tactical capabilities to demand fairness,[x] as is evident in their unwillingness to back down in WIPO, reported by IP Watch, above.

Drahos and Brathwaite’s article provides an insightful account of how this controversial agreement came to be. Their work is part of an important literature that looks critically at intellectual property in a number of ways: by examining the impact of the characterization of the patent’s limited monopoly grant over inventions as private “property rights”; by highlighting how the original intention to incent and reward inventors has been manipulated as IP has become corporately owned; and the role that private interests have played in defining public concerns and policy priorities in the realm of international law. A clear understanding of how power relations structure the role and function of the patent system over time is necessary if the system is to be adapted to meet the needs of developing countries.

[ii] Peter Yu, Five Disharmonizing Trends in the International Intellectual Property Regime, Michigan State Univ. Coll. of Law Legal Studies Research Paper, No. 03-28, 2007. www.ssrn.com|abstract=923177.

[iii] In fact, (source).

[iv] Peter Drahos and John Brathwaite, “Who Owns the Knowledge Economy: Political Organizing Behind TRIPS”, Corner House Briefing Papers, Briefing 32, September 2004. Available online at: http://www.thecornerhouse.org.uk/item.shtml?x=85821

[v] Susan Sell provides a similar analysis of how, in her words, “the IP lobby was particularly effective in translating their private interests into a matter of public interest.”See: Susan Sell, Private Power, Public Law: The Globalization of Intellecutal Property Rights, Cambridge University Press 2003, p. 99. Hereinafter Sell

[vi] Drahos and Brathwaite, supra note iv at page 32.

[vii] See, for example, Susan Sell, supra note v, chapter 6.

[viii] See for example, Sell, ibid; see also Jean-Frédéric Morin, The Strategic Use of Ethical Arguments in International Patent Lawmaking 3 Asian J. WTO & Int’l Health L & Pol’y 518 2008.

[ix] E.g., Sean A Pager, Patents on a Shoestring: Making Protection Work for Developing Countries, 23 Ga. St. U. L. Rev. 755 2006-2007.

[x] Jeremy de Beer, (ed) Implementing the World Intellectual Property Organization’s Development Agenda, Wilfrid Laurier University Press, 2009; Donald P. Harris, TRIPS and Treaties of Adhesion Part II: Back to the Past or a Small Step Forward? 2007 Mich. St. L. Rev. 185,

As we are all well aware, the international credit crisis, which came to the fore in 2008, resulted in the collapse or near-collapse of financial institutions and sources of credit for businesses around the world – causing trade levels, investment and global output to plummet, and thousands of jobs to disappear. In the fall of 2008, there were fears that a depression similar in intensity to the Great Depression of the 1930s was looming. In response, many states announced significant injections of capital into troubled financial institutions and industrial sectors to avoid their collapse, and to facilitate access to credit by industry. They also adopted measures to stimulate domestic demand.

Global leaders, particularly those representing the G20 group of countries, also moved to take a coordinated approach to the crisis. The G20 leaders first met in November 2008 for a Summit on Financial Markets and the World Economy, where they issued a Declaration in which they promised to “work together to restore global growth and achieve needed reforms in the world’s financial systems”.[3] As part of this declaration, the G20 leaders made four trade-related commitments:

1. To refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing WTO-inconsistent measures to stimulate exports.
2. To minimize any negative impact on trade and investment of our domestic policy actions, including fiscal policy and action in support of the financial sector.
3. To notify promptly the WTO of any such measures; and
4. To call upon the WTO, together with the Organization for Economic Cooperation and Development (OECD) and the United Nations Conference on Trade and Development (UNCTAD) to monitor and report on their adherence to these undertakings.

In late September, the WTO, the OECD, and UNCTAD released their second report on the G20 countries’ adherence to these undertakings: Report on G20 Trade and Investment Measures.[4] The report identifies approximately 280 measures undertaken by G20 countries between April and September. The report expressly reserves opinion as to the legality of the measures under WTO rules, or their trade-distorting nature. While the authors did not find “widespread” resort to trade and investment restrictions as yet, they did find “policy slippage” and pointed to multiple examples of protectionist measures adopted by G20 members, including agricultural export subsidies, tariff increases, new non-tariff measures, and trade defence mechanisms.[5]

In June 2008, the UK-based Centre for Economic Policy Research launched Global Trade Alert (GTA), a service providing real time information on state measures taken during the current global economic downturn that are likely to discriminate against foreign commerce. The GTA also issued a report shortly before the G20 meeting in September with its own analysis of the extent to which the G20 has “kept its promises” to avoid protectionism. The report, Broken Promises: a G-20 Summit Report by Global Trade Alert, identifies over 400 trade-related, state initiatives undertaken in the wake of the crisis.[6] It distinguishes between three types of measures:  those that almost certainly discriminate against foreign commercial interests; those that may discriminate against foreign commercial interests; and those that are either non-discriminatory or involve liberalization.[7] The study finds that “the overwhelming picture is one of planned and implemented state initiatives that reduce foreign commercial opportunities and reverse the 25-year trend towards open borders.” It estimates that worldwide, the number of discriminatory measures being implemented outnumbers the liberalizing measures by five to one.[8] The GTA finds that the impact of these measures is cause for significant concern: fewer than 5 percent of product categories, 20 percent of economic sectors, and a small number of trading jurisdictions have not been affected by any significantly restrictive measures.[9]

The two reports offer slightly different views as to the current intensity of trade protectionism. However, they are in agreement that the main challenge associated with the current protectionist mindset is the fact that many more protectionist measures are ‘in the pipeline’- planned and approved, but not yet implemented. They both stress that the main risk to the trading system is that states will continue to cede to protectionist pressures. Both caution that the continued implementation of protectionist measures will further erode trade liberalization achievements, and, more importantly, will hamper the global economic recovery. Both urgently recommend that governments plan a coordinated exit strategy to eliminate these elements as soon as possible.

The G20 leaders have announced their intention to prepare exit strategies.[10] However, they have merely agreed to implementation “when the time is right”. In light of the many trade protectionist measures still in the pipeline, their failure to commit to a timeline could contribute to aggravating the contraction of world trade and investment, which would undermine confidence in an early and sustained recovery of global economic activity. Stronger action is required.

[2] G20 Summit Declaration, “The Global Plan for Recovery and Reform”, London, 2 April 2009.  Accessed online October 25, 2009 at http://www.g20.org/Documents/g20_summit_declaration.pdf.

[3] Ibid.

[4] Report on G20 Trade and Investment Measures, September 2009. Accessed online October 25: http://www.pittsburghsummit.gov/documents/organization/129863.pdf.

[5] Ibid, at page 6.

[6] Simon J. Evenett (ed), Centre for Economic Policy Research, 2009. Accessed online October 25:  http://www.globaltradealert.org/sites/default/files/Broken_promises_GTA_second_report.pdf.

[7] Ibid, at page 18.

[8] Idem, at page 13.

[9] Idem, at page 4.

[10] http://www.g20.org/Documents/pittsburgh_summit_leaders_statement_250909.pdf.