Article 12 of the EC Treaty (now Article 18 of the Treaty on the Functioning of the European Union) outlines the general prohibition on Member States enacting laws which discriminate on the basis of nationality. The ECJ has interpreted the non-discrimination provisions of the EC Treaty broadly, so as to ensure that governments do not covertly enact laws which they are not permitted to enact overtly.[3] Based on the jurisprudence of the ECJ, and the policy objectives of the EU and its Member States to promote the Single Market, the outcome of the case seems as though it should be straightforward: the regulation of the Maastricht municipal council discriminates on the basis of residency, which can be seen as a proxy for nationality since the majority of Dutch residents are likely to be Dutch nationals, and is therefore contrary to Articles 12 and 49 of the EC Treaty.

The ECJ, however, ruled in favour of the Maastricht municipal council and declared that the residency requirement is “justified by the objective of combating drug tourism and the accompanying public nuisance.”[4] The Court essentially concluded that the residency requirement infringed Article 49, but was a proportionate response and therefore justifiable. In addition, the ECJ states that because marijuana is generally prohibited throughout the EU (except in cases of regulated use for medicinal purposes), the cafe owner may not rely on protection from the relevant provisions in the EC Treaty when marketing the drug.

The decision of the ECJ is flawed and unfortunate, as it seems to be inspired by political objectives and is not based on sound legal reasoning. Throughout the judgment, the Court consistently refers back to international treaties which EU Member States are party to which specifically prohibit the trafficking of marijuana, along with EU legislation which promotes the same objectives. This is done for the purpose of convincing the reader that smoking marijuana is “illegal” or “wrong” in an absolute sense, and therefore restricting its use is not really a bad thing. The problem with this smoke and mirrors trick is that it ignores the fact that recreational marijuana use is permitted (though regulated) in the Netherlands. If the international obligations which the Court speaks fondly of are so important, why are marijuana cafes permitted to exist in the Netherlands in the first place? The correct judgment is that the residency requirement imposed by the Maastricht municipal council violates the EC Treaty, and cannot be justified because it discriminates on the basis of nationality. If Dutch officials are so concerned about the public nuisance which marijuana cafes are causing they can legislate them out of existence, but they may not impose regulations which discriminate on a prohibited basis.

[1] Josemans v. Burgemeester van Maastricht, C-137/09, [2010] ECR I-0000.

[2] EC, Consolidated Version of the Treaty Establishing the European Community (EC Treaty), [2006] OJ C 321 E/37.

[3] Rewe-Zentral AG v. Bundesmonopolverwaltung für Branntwein, C-120/78, [1979] ECR I-649; see also para 58 of supra note 1.

[4] Supra note 1 at para 84.

In Australia, the Tobacco Plain Packaging Act 2011 is an innovative piece of legislation which aims at discouraging the use of tobacco products by requiring uniform plainness in packaging.[1] The act would require cigarettes to be sold in packaging which would not allow tobacco companies to use their own labels, and consequentially constrain their ability to market their brand image. The government’s stated goal is to reduce tobacco consumption, particularly among young individuals.

Members of the WTO’s Technical Barriers to Trade (TBT) Committee discussed this piece of legislation at a meeting earlier this month, with over a dozen members voicing formal objections to the act.[2] The objecting states argue that Australia’s evidence of the effectiveness of the proposed act is suspect, and thus unnecessarily restricts trade.[3] It is important to note that many of the objecting states do not export tobacco to Australia, and that imported tobacco only accounts for 0.5% of domestic trade of this product, meaning the impact on global trade will be minimal.[4] Still, at this point it is unclear whether another state will challenge Australia on the act if it eventually becomes law.

Meanwhile, in Canada, the Conservative government was briefly the subject of criticism in September when the CBC reported that Health Canada lifted its ban on non-cola caffeinated drinks largely because of pressure from the European Union (EU).[5] EU representatives had been pushing for the lifting of the ban in order to allow IRN-BRU, a leading non-cola caffeinated drink from Scotland, to be sold on the Canadian market. The lifting of the ban drew criticism from across Canada, largely because by Health Canada’s own admission, Canadians are already consuming too much caffeine.[6] Despite this over-consumption of caffeinated beverages however, the Conservative government determined that appeasing European exporters was the more important policy objective.

Finally, the tiny nation of Samoa, with a population of less than 200,000, made headlines last week by dropping its ban on turkey tails and thus paving the way for WTO accession.[7] Turkey tails are an unusual and unexpected source of trade friction, but the ban shared a common link with many trade disputes: health concerns. The meat from turkey tails is apparently high in fat, and thus the Samoan government had banned the product to promote the health of its citizens. According to the World Health Organization (WHO), Samoa is one of the world’s most obese nations, thus making the consumption of fattening foods a pressing health concern. The ban was lifted largely because of lobbying efforts carried out by exporters from the US.[8]

For those who believe that governments should play an active role in protecting the health of its citizens (myself included), on the surface, the outcomes in Canada and Samoa seem alarming; the governments in each nation seem to be favouring free trade at the expense of the health of their citizens.However, a deeper analysis of the respective public health problems in Canada and Samoa reveals that the issue is not as straightforward as it appears at first glance.

In Canada, caffeinated beverages are widely available, in spite of the previous prohibition on caffeinated non-cola drinks. The drink at the centre of the trade dispute with the EU, IRN-BRU, has roughly a third of the caffeine that equivalent amounts of Red Bull or Tim Horton’s coffee do.[9] Despite the ban on drinks like IRN-BRU, over-consumption of caffeine continues to be a problem. This leads to the obvious conclusion that merely banning trade on a narrow group of products was not an effective solution to combating the public health concern. If the government of Canada is serious about curbing caffeine consumption, there are alternative ways to realize this objective. For instance, mandatory packaging requirements indicating the amount of caffeine a product contains would likely be a more effective mechanism for discouraging consumption of highly-caffeinated beverages and would likely be acceptable under WTO rules so long as the requirements do not distinguish between domestic and imported products.

Similarly, Samoa’s ban on turkey tails has obviously not done much in assisting its fight on obesity. Turkey tails will now be subject to tariffs, and Samoa will continue to search for appropriate regulatory tools to reduce its obesity rates.

Australia’s proposed legislation on tobacco packaging provides a useful example of the most appropriate way to regulate behaviour in response to public health concerns. The Australian government has proposed action in the form of mandatory packaging which it believes will promote public health. If governments in Canada and Samoa genuinely want to address their respective public health concerns, there are ample regulatory methods available to them to implement these policy objectives.

In other words, promoting public health and free trade do not have to be mutually exclusive.

[1] Australian Government: Department of Health and Ageing, “Public Consultation on Plain Packaging of Tobacco Products” (6 June 2011), online: < http://www.yourhealth.gov.au>.

[2] World Trade Organization, “Technical Barriers to Trade: Formal Meeting. Members discuss 54 technical barriers, China’s Final Review and Streamlined Work” (10-11 November 2011), online: <http://www.wto.org>

[3] Ibid.

[4] Ibid.

[5] Canadian Broadcasting Corporation, “Caffeine Use Extended despite Health Warnings” (27 September 2011), online: <http://www.cbc.ca>.

[6] Andrew Hanon, “Canada OKs Caffeine for Non-Cola Soft Drinks” (cnews, 20 March 2010), online: <http://cnews.canoe.ca/CNEWS>; Adrienne Silnicki, “Trading Our Children’s Health” (The Council of Canadians, 27 September 2011), online: <http://canadians.org/blog>.

[7] Jason Gate, “Choosing between Free Trade and Public Health” (Business Exchange, 22 November 2011), online: <http://www.businessweek.com/magazine>.

[8] Ibid.

[9] Supra note 5.

L’accès aux ARV est donc capital pour les PED, dont les populations ont les plus hauts taux d’incidence (4). Il y a près de dix ans, les ARV n’étaient que peu ou pas accessibles aux victimes de la maladie dans les PED, coûtant près de 10 000 $ par année pour chaque patient (5, 6). La société civile ainsi que certains membres de la communauté médicale internationale, outrés par l’attitude des grandes compagnies pharmaceutiques[1], ont donc dû prendre les choses en main afin de modifier l’ordre du jour politique global et  réitérer l’importance d’agir contre les ravages que cause le VIH/sida au sein des populations les plus durement touchées, notamment l’Afrique subsaharienne (7, 8). Ce sont les producteurs de médicaments génériques[2] qui sont venus changer la donne en concurrençant les grandes pharmaceutiques occidentales sur le marché des ARV dans les PED et en faisant diminuer les coûts à près de seulement 100 $ par année  par patient (5, 9).

Cependant, la communauté internationale fait maintenant face à un nouveau problème, les médicaments de première ligne, qui demeurent les plus abordables, n’étant pas toujours efficaces, le traitement du VIH/sida nécessite bien souvent un changement de stratégie dans le choix des médicaments (3). Bien que la contestation du système alors en place ait réussi à faire réduire les prix des ARV de première ligne, les prix des ARV de deuxième ligne[3] demeurent extrêmement élevés en raison des nouvelles contraintes qu’imposent de récents accords internationaux sur le droit de la propriété intellectuelle aux producteurs de génériques. Ces accords empêchent ces derniers de commercialiser des médicaments développés par les grandes pharmaceutiques.

Il est toutefois grand temps que des règles claires soient établies dans le domaine du droit international de la propriété intellectuelle afin que les PED puissent avoir accès aux ARV de deuxième ligne à un prix raisonnable et afin de favoriser la recherche, l’innovation et le développement de produits[4] adaptés aux PED[5]. En effet, l’ampleur de la catastrophe humaine qui a présentement lieu en Afrique ainsi que dans d’autres PED impose que la communauté internationale agisse et que les multinationales pharmaceutiques, jusqu’alors très peu prêtes à aider leur prochain, reconnaissent qu’un devoir humanitaire leur incombe. Dans ce travail, je présenterai le régime actuel du droit international de la propriété intellectuelle et son effet sur l’accès aux ARV pour les PED. Je présenterai finalement des pistes de solution.

Accords internationaux sur le droit de la propriété intellectuelle et des brevets

Tous les pays désirant adhérer à l’Organisation mondiale du commerce (OMC)[6], doivent signer et ratifier l’Accord sur les aspects des droits de propriété intellectuelle qui touchent au commerce (ADPIC) (11). L’ADPIC impose aux pays membres une réforme de leur droit interne de la propriété intellectuelle et donc l’imputabilité judiciaire pour le non respect du droit des brevets (art. 27 et 28 ADPIC). Le but premier de la mise en place de ce régime est de favoriser  l’investissement dans la recherche et le développement de produits en garantissant un monopole sur la commercialisation du produit au détenteur du brevet[7] (9). Heureusement, la communauté internationale a pris soin de ménager certaines exceptions à l’application de ces règles en prévoyant une issue de secours et le non respect de brevets, autrement en vigueur, en cas d’urgence nationale extrême ou de besoin pressant pour maintenir la santé publique (art. 27 (2), 30 et 31 (b) ADPIC). Il a d’ailleurs été reconnu que le VIH/sida est une crise dans le domaine de la santé publique suffisamment urgente pour permettre à un pays désirant se servir de l’exception invoquée à l’article 31 (b) de l’ADPIC d’autoriser la production de médicaments ARV génériques (9).

D’autre part, en 2001, les pays membres de l’OMC conscients de l’aggravation de la crise du VIH/sida se sont réunis afin de clarifier l’exception prévue au régime de brevets de l’ADPIC et ont présenté la Déclaration sur l’Accord sur les ADPIC et la santé publique (Déclaration de Doha) (12). Cette déclaration, en plus de réitérer le droit d’un pays à déterminer ce qui constitue une crise menaçant la santé publique et d’accorder des licences obligatoires (art. 5 Déclaration de Doha), a changé la donne en accordant un droit de non application de l’ADPIC en matière de brevet jusqu’en 2016 aux pays les moins avancés (PMA) ainsi qu’en recommandant fortement aux pays développés de mettre en place des politiques de transfert de technologies vers les PMA dans le domaine de la santé (art. 7 Déclaration de Doha). Les pays ne possédant pas la capacité manufacturière et l’expertise nécessaire afin de produire des médicaments génériques restent laissés pour compte, mais la situation changera par la suite avec la Décision du conseil général du 30 août 2003 (13) qui permet aux pays producteurs de médicaments génériques d’exporter leurs produits au sein des pays ne possédant pas d’industrie pharmaceutique.

Ces mesures ont eu un grand succès, notamment en Thaïlande et au Brésil, et plus de 60 pays ont maintenant pu se procurer des ARV à un prix moindre en ayant recours aux exceptions de l’ADPIC (7). Toutefois, les pays occidentaux ainsi que leurs industries pharmaceutiques ont su préserver leur part de marché et trouver des manières habiles de contourner les règles. D’une part, les pays occidentaux ont exercé de fortes pressions[8] sur les PED et surtout sur les pays moyennement développés (PMD) afin qu’ils n’aient pas recours aux exceptions prévues au sein de l’ADPIC[9] et ont réussi à mettre en place des régimes de droit de la propriété intellectuelle beaucoup plus stricts et ne comportant pas les exceptions de l’ADPIC au moyen d’accords commerciaux bilatéraux et régionaux[10] (9). D’autre part, les compagnies pharmaceutiques utilisent une stratégie de la perpétuation des brevets afin d’en prolonger la durée de vie. Cette technique consiste à faire breveter un produit légèrement différent, mais comportant la même technologie ou les mêmes composés, par exemple la transformation d’un comprimé en un gel (6). À cet égard, il convient de saluer l’initiative du gouvernement indien qui a su ajuster sa législation sur la propriété intellectuelle à cette réalité en imposant des critères de brevetabilité plus stricts (9, 14).

Pistes de solution

Plusieurs options sont envisageables afin de s’assurer que les PED puissent bénéficier d’un accès aux ARV à des prix abordables et de favoriser le développement de produits adaptés à un marché qui compte près de 80 % de la population mondiale, mais n’en représente qu’environ 10 % des ventes (6). Si les pays occidentaux et leur puissante industrie pharmaceutique ont su s’adapter aux nouvelles règles du jeu, il est maintenant temps que la société civile se fasse entendre de la communauté internationale à nouveau et force les décideurs à respecter les exceptions au régime de l’ADPIC, à trouver de nouvelles solutions et à reconnaître que la vie de pans entiers de la population de certains PED est en jeu.

Tout d’abord, la société civile devrait fortement pousser la communauté internationale à reconnaître que l’accès aux ARV entre dans le cadre de la protection des droits humains à la santé et à la vie[11]. La reconnaissance d’un tel droit imposerait alors à tous les pays ainsi qu’au secteur commercial des pharmaceutiques de respecter le texte et l’esprit des exceptions prévues au sein de l’ADPIC ainsi que des deux déclarations subséquentes (9, 15-18) et de modifier la vision préétablie du droit des brevets afin de le repositionner comme un facteur de changement et d’innovation pour le bénéfice de tous (19). Les pays se verraient obliger de modifier leurs régimes légaux de protection de la propriété intellectuelle afin de prendre en compte les droits à la santé et à la vie et le caractère social des brevets. Les réformes pourraient inclure le droit de recourir à des licences obligatoires afin de se procurer des médicaments génériques ou simplement lorsque des brevets font obstacle à l’innovation en matière de santé publique[12]. Les critères de brevetabilité devraient aussi être renforcés de manière à ne récompenser d’un brevet que les produits démontrant une efficacité supérieure à un produit similaire ou étant caractérisé par une réelle innovation afin de favoriser la recherche et le développement tout en empêchant la perpétuation des brevets (6). Des principes directeurs pour les agents de l’État chargés d’accorder les brevets devraient notamment être établis et appliqués de manière similaire au niveau mondial. L’exception d’exploitation rapide, qui permet de faire homologuer un produit avant même la fin d’un brevet en utilisant les résultats des tests de la pharmaceutique qui a développé le produit si l’on démontre que notre produit est identique au produit breveté afin que la commercialisation puisse se faire dès l’expiration du brevet, devrait être intégrée aux législations nationales (6).

Les compagnies pharmaceutiques devraient aussi se voir imposer de nouvelles obligations et pourraient être forcées de ne pas déposer de brevets ou de ne pas appliquer leurs brevets existants pour les ARV dans certains pays aux prises avec le fléau qu’est devenue la problématique du VIH/sida. De plus, elles devraient avoir l’obligation de transférer leurs technologies manufacturières aux PMA (6).

Une autre option nous lance sur la piste d’une prise en charge du dossier par l’organisme onusien tout spécialement chargé de s’occuper des questions de propriété intellectuelle, l’Organisation mondiale de la propriété intellectuelle. Cet organisme devrait voir son rôle être redéfini afin de prendre en considération de manière plus représentative les besoins de tous ses membres (28) et pourrait présenter un projet de convention internationale mettant à l’avant plan un nouveau régime favorisant les PED dans le domaine de la santé publique. Ce régime pourrait introduire des intervalles de situations monopolistiques plus courtes, des conditions d’obtention plus strictes et des exceptions clairement définies et non dérogatoires pour les PED. Les PED formant la grande majorité des États membres de l’organisation, ils ont de considérables chances de faire valoir avec succès leurs revendications.

Finalement, un plus grand ralliement du secteur privé au nouveau projet présenté par UNITAID en 2009, la Communauté de brevets, qui incite les pharmaceutiques à octroyer des licences volontaires pour certains produits auxquels l’accès est primordial pour les PED (7, 10). Des chercheurs peuvent ensuite se servir de ces produits afin de développer des dérivés adaptés à la réalité des PED.

Il est grand temps que le droit des brevets retrouve ses marques de noblesse et retourne à son aspiration première de permettre à tous de bénéficier des avancées technologiques et des nouvelles découvertes. Les compagnies pharmaceutiques ainsi que les dirigeants d’aujourd’hui ont maintenant la vie de millions de personnes entre leurs mains.

Références

1. ONUSIDA. Le point sur l’épidémie de sida. [En ligne] 2009 [cité 20 octobre 2011]; Disponible à : URL : http://www.unaids.org/en/media/unaids/contentassets/dataimport/pub/report/2009/jc1700_epi_update_2009_fr.pdf

2. Tarakeshwar N, Kalichman SC, Limbayi LC, Sikkema KJ. HIV Prevention Needs : Primary Prevention and Prevention for People Living with HIV/AIDS. Dans: Celentano DD, Beyrer C, éditeurs. Public Health Aspects of HIV/AIDS in Low and Middle Income Countrie. New York: Springer; 2008. p. 19-40.

3. Hoffman CJ, Mills LA, Gallant JE. Future of HIV/AIDS Care in Low- and Middle- Income Countries. Dans: Celentano DD, Beyrer C, éditeurs. Public Health Aspects of HIV/AIDS in Low and Middle Income Countrie. New York: Springer; 2008. p. 41-69.

4. Celentano DD, Davis WW, Beyrer C. Epidemiology of HIV/AIDS in Low and Middle Income Countries: Where Global AIDS is and Where it is Going. Dans: Celentano DD, Beyrer C, éditeurs. Public Health Aspects of HIV/AIDS in Low and Middle Income Countrie. New York: Springer; 2008. p. 3-18.

5. Médecins sans frontière. Untangling the Web of Antiretroviral Price Reductions. [En ligne] 2008 [cité 20 octobre 2011]; Disponible à : URL : http://www.utw.msfaccess.org/downloads/31

6. Organisation mondiale de la santé. Santé publique, innovation et droit de la propriété intellectuelle : Rapport de la Commission sur les droits de la propriété intellectuelle, l’innovation et la santé publique. [En ligne] 2006 [cité 20 octobre 2011]; Disponible à : URL : http://www.who.int/intellectualproperty/documents/thereport/FRPublicHealthReport.pdf

7. Hoen ET, Berger J, Calmy A, Moon S. Driving a Decade of Change : HIV/AIDS, Patents and Access to Medicines for All. J Intl AIDS Soc [Périodique en ligne] 2011 [cité 20 octobre 2011]; 14 (15). Disponible à : URL : http://www.jiasociety.org/content/14/1/15

8. Mukherjee J. HIV/AIDS Care: The Minimum Package and Scaling Up. Dans: Celentano DD, Beyrer C, éditeurs. Public Health Aspects of HIV/AIDS in Low and Middle Income Countrie. New York: Springer; 2008. p. 71-84.

9. St-Martin F. The Right to Health, the TRIPS Agreement and the Public Health Safeguards to Encourage the Universal Access to Essential Medicines. Université de Montréal: Faculté de droit; 2006.

10. UNITAID. Rapport annuel 2010. [En ligne] 2010 [cité 20 octobre 2011]; Disponible à : URL : http://www.unitaid.eu/fr/resources/rapports-dactivites.html

11. Accord sur les aspects des droits de propriété intellectuelle qui touchent au commerce 1994 (OMC).

12. Déclaration sur l’Accord sur les ADPIC et la santé publique 2001 (OMC).

13. Décision du Conseil général du 30 août 2003 : Mise en œuvre du paragraphe 6 de la Déclaration de Doha sur l’Accord sur les ADPIC et la santé publique 2003 (OMC).

14. Millenium Project. Prescription for Healthy Development : Increasing Access to Medicines. [En ligne] 2005 [cité 20 octobre 2011]; Disponible à : URL : http://www.unmillenniumproject.org/documents/TF5-medicines-Complete.pdf

15. Amollo R. Revisiting the TRIPS Regime : Rwanda-Canadian ARV Drug Deal “Tests” the WTO General Council Decision. Afr J Intl & Comp Law 2009; 17; p. 240-269.

16. Csete J. Several for the Price of One: Right to AIDS Treatment as Link to Other Human Rights. Conn J Intl Law 2001-2002; 17; p. 263-272.

17. Walker EM. The HIV/AIDS Pandemic: A Human Rights Approach. Flo J Intl Law 2007; 19; p. 335-419.

18. Santoro MA. Human Rights and Human Needs: Diverse Moral Principles Justifying Third World Access to Affordable HIV/AIDS Drugs. NC J Intl L & Com Reg 2005-2006; 31; p. 923-942.

19. Médecins sans frontière. Statement by MSF at WIPO GA September 30, 2004. [En ligne] [cité 20 octobre 2011]; Disponible à : URL : http://www.who.int/entity/intellectualproperty/topics/ip/MSF%20statement%20at%20WIPO%20GA%20%2030%20%20Sep%20%202004.pdf

20. Harmon A, Pear R. Canada Overrides Patent for Cipro to Treat Anthrax. The New York Times. [En ligne] 2009 [cité 20 octobre 2011]; Disponible à : URL : http://www.nytimes.com/2001/10/19/business/19CANA.html?pagewanted=all

21. Médecins sans frontière. How the Trans-Pacific Partnership Agreement Threatens Access to Medicines. [En ligne] 2011 [cité 20 octobre 2011]; Disponible à : URL : http://www.doctorswithoutborders.org/press/2011/MSF-TPP-Issue-Brief.pdf

22. Knowledge Ecology International. Trans-Pacific Partnership Agreement (TPPA). [En ligne] 2010 [cité 20 octobre 2011]; Disponible à : URL : http://www.keionline.org/tpp

23. Knowledge Ecology International. Trans-Pacific Partnership : Property Rights Chapter. [En ligne] 2011 [cité 20 octobre 2011]; Disponible à : URL : http://keionline.org/sites/default/files/tpp-10feb2011-us-text-ipr-chapter.pdf

24. Déclaration universelle des droits de l’homme 1948 (ONU AG).

25. Pacte international relatif aux droits économiques, sociaux et culturels 1976 (ONU AG).

26. Convention sur l’élimination de toutes les formes de discrimination à l’égard des femmes 1981 (ONU AG).

27. Convention relative aux droits de l’enfant 1990 (ONU AG).

28. Musungu SF, Dutfield G. Multilateral Agreements and a TRIPS-Plus World: The World Intellectual Property Organisation (WIPO).  TRIPS Issues Papers. [En ligne] 2003 [cité 20 octobre 2011]; Disponible à : URL : http://www.quno.org/geneva/pdf/economic/Issues/Multilateral-Agreements-in-TRIPS-plus-English.pdf

[2] Il faut mentionner l’importance des producteurs de médicaments génériques indiens qui produisent près de 80 % des ARV que l’on retrouve dans les PED (10).

[3] Les ARV de deuxième ligne sont utilisés si le patient semble avoir développé une résistance, inévitable pour certains patients, aux ARV de première ligne.

[4] Il est important de noter que le droit des brevets ne constitue pas un moyen pertinent de stimuler la recherche et le développement et d’amener de nouveaux produits sur un marché où le pouvoir d’achat est très faible, comme c’est le cas dans les pays en développement.

[5] Notamment, le développement de médicaments adaptés aux enfants et de comprimés trois-en-un à dose fixe.

[6] L’OMC défend depuis toujours très chèrement les intérêts commerciaux occidentaux.

[7] Ce monopole a une durée de 20 ans (art. 33 ADPIC).

[8] Ces moyens de pression prennent souvent la forme de sanctions financières directes ou indirectes.

[9] L’on se doit d’ailleurs de noter l’hypocrisie de ces pays qui n’hésitent pas à utiliser ces mêmes médicaments génériques dans le cadre de leurs programmes de donations, tel que le Plan d’urgence américain pour l’aide contre le sida (« PEPFAR ») (4). Dans le même ordre d’idée, notons le manque de scrupule des gouvernements américain et canadien à menacer la pharmaceutique Bayer de recourir aux exceptions de l’ADIPC afin de se procurer à moindre coût d’importantes quantités du médicament Cipro lors de la crise de l’anthrax aux États-Unis (20).

[10] On semble pouvoir retrouver un exemple flagrant de cette stratégie des pays développés afin de contourner l’esprit des exceptions aux règles de l’ADPIC au sein des négociations pour un éventuel accord de Partenariat trans-pacifique, impliquant les gouvernements des États-Unis, du Chili, du Vietnam et de plusieurs autres pays (21-23).

[11] Ces droits sont notamment reconnus au sein des textes suivants : Déclaration universelle des droits de l’homme (24), Pacte international relatif aux droits économiques, sociaux et culturels (25), Convention sur l’élimination de toutes les formes de discrimination à l’égard des femmes (26) et la Convention relative aux droits de l’enfant (27).

[12] Le Canada a édicté une telle loi, avec un succès mitigé (15).

China is the obvious target of the Act. Populist politicians in the U.S. in recent years have relied on criticizing China in the hopes of appealing to citizens who believe that the primary cause of high unemployment rates in the U.S. is the migration of manufacturing jobs overseas.² The problem with the Act, however, is that it fails to comply with the U.S.’s WTO obligations, and will most likely be successfully challenged by China if it ever becomes law. The Act attempts to classify an undervalued currency as a “subsidy” to exporters. The Agreement on Subsidies and Countervailing Measures (“SCM Agreement”), agreed to at the Uruguay Round of WTO negotiations provides the framework for the permissible imposition of CVDs.³ Section 1.1 of the SCM Agreement outlines four scenarios which are classified as subsidies: 1) the direct government transfer of funds or liability guarantees (i.e. loan guarantees); 2) tax credits; 3) a government supplying or purchasing certain goods or services; and 4) a government acting through an intermediary to accomplish one of 1 to 3. However, a government subsidy alone is not enough to merit the imposition of CVD; the subsidy must be shown to be specific to a particular firm or industry. Simply put, currency manipulation does not fall into any of the categories which would qualify it as a subsidy, nor is it specific enough to warrant CVDs.

The approach adopted by the U.S. Senate is unfortunate. CVDs are designed as a way for governments to protect their domestic industries, particularly on an interim basis, when other WTO Member States are providing local firms with illegal subsidies. Currency manipulation is not a prohibited form of subsidy because while an undervalued currency will help exporters, it will generally be detrimental to companies which rely on imports. Moreover, most countries (including the U.S.) engage in currency manipulation from time to time through the adjustment of interest rates or quantitative easing measures. If CVDs were permissible simply because a currency was undervalued, the result would be an increase of unnecessary trade wars which are contrary to the spirit and purposes of the WTO. The WTO provides the framework for countries to engage in trade based on the mutual respect of its laws; the WTO also provides a mechanism whereby its members can peacefully resolve their disputes through adjudication, without the need to resort to the retaliatory imposition of tariffs. The Currency Exchange Rate Oversight Reform Act of 2011 undermines these purposes by flagrantly violating the rules. The U.S. has legitimate trade grievances against China, such as the systematic non-respect of intellectual property rights and certain prohibitions on U.S. firms operating in China outside the context of a joint venture. The method for remedying these grievances is not through unilateral hostile action but through direct negotiations with the Chinese government and within the framework of the WTO’s dispute resolution body.

The tuna-dolphin disputes revolve around unilateral measures taken by the United States in order to combat the use of purse-seine fishing nets. Purse-seine fishing nets are used for commercial fishing. When used for tuna harvesting, not only tuna but also dolphins (and other species as well) are often trapped, injured, and even killed. It was argued by the United States that due to the use of these nets, the population of dolphins at the ETP was dramatically reduced.

Luckily for the dolphins, two types of U.S. pressure groups did not intend to let them disappear from the waters of the ETP. The first were U.S. fishermen who relied on dolphins for the fishing of tuna. Dolphins often swim above schools of tuna, and as they regularly surface above the water for a breath of air, they serve as an excellent visual indicator of where tuna can be found. The second group of champions to which dolphins owe their gratitude comprise environmental civil society organizations. Dolphins’ excellent reputation developed by generation of TV series and Disney movies probably also did not hurt their campaign.[1]

The pressure applied by these groups was indeed successful. The U.S. first reacted to this pressure with a ban, prohibiting the importation of tuna harvested with purse-seine fishing nets (“non-dolphin-safe tuna”). But as the use of these nets was, and still is prominent among Mexican fisherman, it wasn’t very surprising to find Mexico spearheading the efforts to eliminate this ban. As part of their efforts, Mexico (and other states) invoked the trading system’s dispute settlement mechanism against these U.S. measures. These attempts were relatively successful, as trade dispute settlement panels ordered the United States to drop its ban on non-dolphin-safe tuna.[2]

The use of unilateral trade measures (such as ban on the importation of certain products) in order to ‘convince’ other states to adhere to what locals believe to be ‘right’ and ‘good’, is problematic and regarded by some as ethnocentrism, or cultural imperialism. Think for example on the ways in which many Canadians reacted when the EU decided to ban the importation of Canadian seal products (cute animals, apparently, are an endless source for trade disputes), or its more recent plan to ban Canadian tar-sands oil.[3] What is interesting about these unilateral measures, at least in my view, is how influence flows from one group of interests (environmental interests, for example), to another (economic interests, for example).

More concretely, we can see that some states attempt to influence global environmental issues by applying pressure through the trading system. These attempts highlight the fact that no group of interests is isolated from another. Trade influences the environment, and the environment influences trade. States therefore can use trade in order to affect the environment, and the environment in order to affect trade. International Relations (“IR”) authors define these attempts to influence one system through the use of another as ‘institutional interaction’, i.e. attempts of actors (states, NGOs, etc.) to influence the outcome of one regime (for example, reducing greenhouse gas emissions, which is the goal of climate change treaties), by applying pressure through another institution (for example, unilateral trade measures that affect the trading regime).

Trade, environment and the ways in which influence flows

Influence travels, sometimes even successfully, from the environmental domain into the trading arena. The turtle-shrimps case is one example in which ‘environmental’ influence successfully carried over (through the action of the U.S.) into the trading system. NGOs’ activity is also often mentioned as a vehicle through which influence flows between different regimes (see for example NGOs’ activity at the WTO Ministerial Conference in 1999 (known as “the battle in Seattle”), or during the (failed) OECD negotiations over a multilateral investment agreement).

This route, it should be noted, is a two-way street. An example of how (negative?) influence travels back from international trade motivated groups to affect the outcomes of environmental treaties, can be found in the U.S’s recent WTO challenge of Chinese subsidies granted to local wind power subsidies, which resulted with the elimination of these subsidies.

Critics of the WTO will probably argue that environmentalists’ influence is more likely to be shattered in the trading arena than actually effecting change in that domain. On certain levels they are obviously right. A short review of the ways through which influence travels may demonstrate this point. Influence travels by actors, and actors can act on several levels. Ideally, and most legitimately, actors can influence the trading system through trade negotiations, i.e. states can convince others that environmental considerations are important and should be promoted through trade. But due to the WTO consensus rule (WTO decisions are generally accepted by consensus) and the current negative negotiations atmosphere, it seems improbable that new, urgently needed, environmentally-influenced decisions will be accepted in this manner (for example, regulations concerning subsidies, or environmental goods and services). Influence, therefore, is highly unlikely to travel by actors through trade negotiations.

Another manner in which environmental influence can enter into the trading system is the one mentioned above – through unilateral trade measures applied by certain states that condition access to local markets on the adherence to certain environmental standards. As already mentioned, this approach is considered to be problematic by many as it represents an attempt to impose local standards, which often represent local values and priorities, on foreign states. Furthermore, without getting into too many details, it should be mentioned that under WTO law, states are not allowed to treat differently two similar products which differ only by the way they were made. For example, most will agree that discriminating between two ‘like’ products that differ only in the amount of CO₂ that was emitted during their production, is inconsistent with WTO laws.[4]

Another, less intrusive, way in which influence can travel is in the use of labelling. Labels, according to the online Cambridge dictionary, are “a piece of paper or other material which gives you information about the object it is fixed to”. Examples for labels are ‘fair-trade’, ‘kosher’, ‘eco’, and ‘dolphin-safe’, all of which provide a consumer with information regarding the purchased product that he or she might find important. Labels can be used as ‘conductors’ of influence in more than one way. First, labels can be used as a compulsory requirement for market access. This type of labelling is referred to as ‘mandatory’ labelling. For example, where a specific ‘kosher’ label is required in order to import meat into a state, this is ‘mandatory labelling’. This situation, it should be noted, is in effect no different from the one described in the paragraph above, and should be considered as tantamount to unilateral trade measures.[5]

A second, more interesting, type of labelling is ‘voluntary labelling’. ‘Voluntary labels’ are granted only to those products that follow certain requirements.  But unlike with ‘mandatory labels’, there is no formal barrier which prevents other, non-labelled, products from being sold in local markets. These labels are ‘voluntary’, as producers can decide whether to use them or not. An example of this type of labelling is the variety of ‘fair-trade’ labels available around the world. Indeed in most grocery stores consumers can choose between a variety of ‘fair-trade’ coffees and those brands that do not carry this label. This type of labelling simply provides customers with information about the products they are about to buy. As there is no ‘trade barrier’ imposed by the state, the influence is traveling directly by those consumers who are interested in passing it to traders and producers.

From a trade law perspective, voluntary labelling should be considered as a ‘soft’, non-intrusive, and even desirable ‘conductor’ of influence. It shifts the economic power from the state, which is committed under trade laws to allow market access, to the consumer, whose preferences and ability to choose between competing products is a cornerstone for the capitalist system and are protected both by anti-trust and consumer-protection laws. The battle in this case is no longer between states, and is no longer about trade barriers (as the obligation to allow market access was granted). It is simply between competing producers, whose ability to brand their products, whether through appealing to consumers’ ethics or their desire to dress/drink/act like David Beckham, is their primer motivation.

As explained above, not many routes are currently open for influence to flow from the environmental domain to the world of international trade. This situation is deteriorating as a WTO Dispute Settlement Body (“DSB”) decided recently to impose further difficulties on the transfer of ‘environmental’ influence into the economic domain. The DSB interfered this time with consumers’ ability to choose, their right to be informed, and influence economic actors through their preferences.

The ‘tuna-dolphin’ decision from September 2011

The DSB in its decision from September 2011 arrived at the conclusion that even when the use of a label is completely optional, it shall still be considered as ‘mandatory’ once the conditions for using this label are mandatory, and are regulated by the state. The meaning of the DSB’s decision is that even the use of voluntary labels, if regulated by the state, must be compatible with WTO requirements and can be challenged by other states. Accordingly, in the context of the tuna-dolphin dispute it was decided that conditioning the ‘dolphin-safe’ label with the non-use of seine-purse fishing nets is incompatible with WTO laws. The U.S. should therefore either annul this labelling scheme or face trade sanctions.

This conclusion is problematic from several aspects. Most notably, the DSB adopted a narrative according to which influence originating from consumers, rather than states, is also subjected to trade laws. This approach is justified, according to the DSB, due to the government’s role in deciding and monitoring the criteria for the ‘dolphin-safe’ labels. But the United States did not prevent its citizens from purchasing Mexican tuna; it only made sure that they would know which tuna was, or was not, harvested with purse-seine nets. The state enabled its public to influence, if they wish to do so, the economic sector, and affect the environment through their purchasing habits.

Furthermore, there are obvious advantages to having state-regulated labels.[6] The alternative to state-regulation of labelling is privatized regulation, i.e. leaving labels to be regulated by NGOs, or other private organizations. But the use of private organizations in order to regulate labels is not without faults. First, there are standards of transparency, due-process in decision-making, and a variety of administrative laws and principles to which private organizations are not bound.[7] The economic value of influential labels is incredibly high, and accordingly so will be the pressures applied on the labelling body. The mechanisms imbedded within (certain) governments are better suited to deal with and monitor such pressures. Furthermore, there are also questions of quality assurance. Who is there to “watch the watchdog”?[8] To ensure that these private organizations adhere to high standards of research,[9] monitoring, and decision-making?

Secondly, it should be remembered that these labels often symbolize values and ethics. Privatizing the labelling process, therefore, means privatizing the right to decide on the exact content of these values. While states, politicians and public servants represent citizens and their values, who is it that decides the criteria for what is ‘fair-trade’, for example? What kind of public debate took place within these private organizations in order to establish what ‘fair-trade’ is, and what it should be?

Apparently, if the ‘dolphin-safe’ label would have been produced and monitored by an NGO, this would not have been a ‘trade law’ problem. But why should this change anything? A voluntary ‘label’, as mentioned above, is simply a medium, a transmission tool for providing information. As long as this information is accurate (and there is no doubt that Mexican fishermen are indeed using purse-seine nets), why should a state be banned from passing it on to its citizens? And since when is the provision of accurate information a trade law violation? Since when is it even trade-law related?

The only logical explanation for these questions would have been that both the panel and Mexico believed that this label restricts trade and market access. Otherwise, Mexico would not have bothered to complain in the first place. But labelling, it should be remembered, is aimed to do exactly this; to inform consumers who consider this information to be important, and to allow them to influence international traders and producers to include environmental considerations in their decisions. The whole point of ‘labelling’ is indeed to limit market access and to “discriminate” against certain type of products. The crucial question, however, should have been who is really limiting the market access? Is it the state, or environmentally-conscious consumers?

In my view, the DSB in this case has crossed the line by interfering in the consumer-producer relationship, rather than the state-state relationship it was designed to deal with. The role of the state in this case  was marginal at best. It was aimed at supporting consumers, not blocking trade. The DSB has arrived at its conclusion by focusing on the interpretation of single words, but missed the bigger picture regarding the nature of the state measure, the role of trade laws, and the role of the WTO in general. By doing so, the DSB has limited even further the routes in which influence can travel between the different domains, as it submitted voluntary labelling based on state regulation and monitoring to WTO laws, which in fact are designed to prevent exactly what the labelling was trying to achieve.

The game, however, is not over yet. As this is ‘only’ a panel report, it remains to be seen what the appellate body will rule on these questions. The dissenting opinion in this case indeed leaves some room for optimism. Hopefully, the Appellate Body will give further consideration to these issues and reverse this decision.

[1] Most notably: http://www.youtube.com/watch?v=akyJYeBVbuM

[2] It should be noted that at the time of these decision, trade panels’ reports were de facto not enforceable. For a summary of the cases, see http://www.wto.org/english/tratop_e/envir_e/edis04_e.htm; and http://www.wto.org/english/tratop_e/envir_e/edis05_e.htm.

[3] See online: http://www.guardian.co.uk/environment/2011/oct/04/oil-sands-imports-eu-ban

[4] This topic is disputable and deserves more attention. See interesting discussion in Charles Benoit, “Picking tariff winners: Non-product related PPMs and DSB interpretations of “unconditionally” within Article I:1” (2011) 42(2) Georgetown Journal of International Law  583.

[5] In WTO law, this situation is considered as ‘technical regulation’, and indeed certain WTO agreements pose restriction on ‘mandatory labelling’ (most notably, see Article 2 of the Agreement on Technical Barriers to Trade (“TBT Agreement”).

[6] The author refers in this respect to democratic, non-corrupt states.

[7] for example, the author’s request to receive Greenpeace’s list of donators was denied

[8] Expression borrowed from  Robert C. Blitt, “Who will watch the watchdog?: International Human Rights Nongovernmental Organizations and the case for Regulation” (2004) 10 Buffalo Human Rights Law Review 261

[9] See for example Paul Collier’s well debated criticism of Christian-Aid, Paul Collier, The Bottom Billion (Oxford: Oxford University Press, 2007); See also critique over the outcome of ‘fair-trade’, Andrew Chambers, “Not so fair trade” 12 December 2009, The Guardian, online: <http://www.guardian.co.uk/commentisfree/cif-green/2009/dec/12/fair-trade-fairtrade-kitkat-farmers>

The Security Council passed the Resolution under Chapter VII of the UN Charter, which allows the Security Council to issue binding decisions to maintain or restore international peace and security. Thus, member states are obliged to take domestic measures to implement the Resolution’s sanctions against the Libyan regime. This post provides a brief overview and comparison of the specific domestic initiatives that Canada, the UK, and the US have taken to implement UNSCR 1970 at a domestic level.

Canada
On February 27, one day after the passage of UNSCR 1970, Canada adopted Regulations Implementing the United Nations Resolution on Libya and Taking Special Economic Measures. The Governor General made these regulations under the authority granted by the Special Economic Measures Act (SEMA). The Special Economic Measures Act grants the Governor General the authority to make regulations to impose sanctions against a foreign state when Canada is obliged to through its membership in an international organization or when there is a threat to international peace and security.

United States
On February 25, one day prior to the passage of UNSCR 1970, Barack Obama issued Executive Order 13556 Blocking Property and Prohibiting Certain Transactions Related to Libya. Although the sanctions took the form of an Executive Order, which are made and issued under the sole authority of the President, the authority to make such an order stems from the International Emergency Economic Powers Act (IEEPA). The Act gives the executive branch broad authority to impose commercial restrictions in response to foreign threats, provided that the President has declared a national emergency with regards to the threat (as Obama did with respect to Libya, also on February 25 2011).

United Kingdom
The Libya (Financial Sanctions) Order 2011 came into force on February 27, 2011.

As was the case in Canada and the United States, the UK’s financial sanctions were implemented in the form of an executive order. The source of executive authority to do so is the 1947 United Nations Act, which confers authority in the Queen to apply Security Council measures (except those involving the use of armed force) in the UK.

A Comparison of Domestic Implementations
In Canada, the United States, and the UK, financial sanctions against the Libyan regime were effected through exercises of executive power.

The Canadian and American sources of authority for the exercise of executive power were rooted in specific pieces of legislation authorizing financial sanctions against foreign powers where there is a threat to peace and security (SEMA and IEEPA, respectively). These tools allow for the implementation of financial sanctions without an order from the Security Council. As such, they allowed for financial restrictions that extended above and beyond those required by the Security Council (e.g. the extension of sanctions to additional persons and entities), and in the case of the US, allowed the domestic implementation of financial sanctions to pre-empt the Security Council’s formal resolution.

In the UK, however, the Queen derived her authority for implementing financial sanctions from the United Nations Act, which requires first the passage of a UNSCR. Unlike the Canadian and American regulations, the UK financial sanctions statutory instrument thus makes direct reference to UNSCR 1970 and adheres strictly to the designated persons and financial instruments referred to therein.

The US and Canadian approach, in which there is a pre-existing framework authorizing the executive to implement financial sanctions against a foreign power (irrespective of the existence of a UNSCR), is advantageous because it allows the executive to take voluntary measures to pass regulations more stringent than that require by the Security Council without having to wait for UN action. The UK approach, which is dependent on Security Council Resolutions, creates a more tempered and delayed response. At the same time, in requiring UN action, the UK approach to foreign financial sanctions might provide foreign investors with greater reassurance that they will not be deprived of their assets as a result of arbitrary, unilateral executive action, as might be the risk in the US and Canada.

While the unanimous adoption of UNSCR 1970 was well justified, the need for a review of sanctions and protection against arbitrary, unilateral action is still important. The behaviour of the Libyan regime is certainly deplorable, but the fact is that UNSCR 1970 and its domestic implementations are open-ended in their duration and provide little (if any) channel for review.

Aside from Libyan investors and the Libyan regime itself, the effects of such sanctions are far-reaching and may have unintended consequences. For example, one need not look further than the more than 500 Libyan students in Canada and 1900 students in the US whose scholarships from the Libyan government are in jeopardy (“Libyan students fear asset freeze”).

No matter how just the cause, unilateral and arbitrary exercises of executive power, particularly in the context of financial sanctions, must be practised judiciously, contain adequate measures for review, and have regard to the full range of consequences.

The most common reasons propagated for this trend include the low volume of global trade emanating from and to Africa, African countries’ inability to navigate the complicated and expensive DSS, and a lack of expert trade lawyers. Whilst these factors are accurate and helpful in explaining African absenteeism in the DSS, it is important to examine the WTO DSS itself. It is vital to consider the functioning, structure and jurisprudence of the system itself for potential failings that can assist in helping explain African countries’ minimal involvement. A key area to consider is the implication of jurisprudence on African countries despite their engagement in the DSS as primary parties. Dispute Panels and Appellant Body render significant decisions that often have a direct impact on African countries’ trade policies with little to no contribution by the very African countries that stand to gain or lose a great deal.

An example of a pivotal and far reaching Panel and Appellant Body ruling has been the India-Quantitative Restrictions (QR) on Imports of Agricultural Textile and Industrial Products case (August 1999). The Appellate Body upheld the Panel’s finding that WTO panels are competent to hear any complaints regarding measures for which a GATT Article XVIII balance-of-payments justification is evoked as a defence to a trade violation sanction. GATT Article XVIII:B is a special provision for developing countries which allows their economies that can only support “low standards of living and are in the early stages of development”, to restrict imports if they face balance-of-payments problems.

Essentially, this ruling brought – within the WTO’s dispute settlement jurisdiction – matters that should be handled by the political organs internal to the WTO. The Balance-of-Payments Committee and the General Council are two such political bodies. This decision makes this provision much less effective and thereby takes away a mechanism for developing countries to correct trade imbalances. In the long run, it weakens their position even further. The immediate implications are that countries with balance-of-payments problems  – including many African countries – have lost the opportunity to discuss this issue in a diplomatic forum such as the General Council, where development challenges could be better articulated than in the dry legalistic dispute settlement system.

This is only one example where it is clear that the WTO DSS has failed to be sensitive and accommodating to the unique situations of developing countries. In particular, the Appellant Body failed to anticipate and appreciate the long term negative effects of their ruling on African countries. This example is one of the possible reasons that helps explain African countries’ failure to take advantage of the WTO DSS.

To conclude, on one hand, the fact that the majority of WTO is made up of African countries counts for nothing until this presence is coupled with a strong understanding of the DSS mechanism. This issue is of pressing importance simply because African countries, especially the weakest of them, need the WTO DSS. As the Dispute Settlement System evolves along with International Economic Law, it will serve African countries well to get involved in reshaping new sets of legal principles and procedures that govern the system. However, on the other hand, there is clear evidence that the integration of African countries into the multi-lateral Dispute Settlement System has been a process leaving much to be desired. There is a great need for reform and sensitivity of the system that will ultimately enhance the long-term stability, predictability and legitimacy of the WTO Dispute Settlement System. A failure to reform could mean that the DSS will remain fundamentally prejudicial to the long-term position of African Countries and other developing economies in the global trading system.

Economists project that China will soon become Africa’s largest trading partner with trade figures set to hit a record high of more than $100 billion in 2010. The International Monetary Fund recently predicted that growth for Sub-Saharan Africa, which typically includes 47 countries (excluding North Africa), should reach 5% this year, up from an earlier prediction of 4.5%.[1] In 2011, it said, growth could rise to 5.5%.[2] Increased trade with China is a significant contributor to this better-than-expected growth. A key indicator of the new strategic trade partnership between Africa and China was the high-profile visit of President Jacob Zuma of South Africa, Africa’s emerging economy, to Beijing this past August. He travelled with a delegation of almost 400 business executives and 11 Cabinet members. The two nations signed a number of Memorandums of Understanding to deepen and broaden trade in strategic sectors such as mineral resources, environmental management, and transport infrastructure. More importantly, the two leaders pledged to step up legislative cooperation to cement the China-SA bilateral strategic partnership.

However, many scholars have raised concerns as to whether African countries have the necessary legal and regulatory institutions to deal with this influx of Chinese investment. In a recent online debate held by The Economist Online, George Ayittey, a renowned Ghanaian economist at the American University in Washington asserted that the nature of the Chinese deals bother him.[3] Such deals tend to be secured through secrecy, bribery, payment of kickbacks and building presidential palaces. Judicial weakness and underdeveloped regulatory regimes are central to these concerns. Particularly troubling is the recent news that on the 15th October 2010, 11 miners, whilst protesting low wages and poor working conditions at the Collum Coal Mine in southern Zambia, were shot by their Chinese managers. This questions whether domestic labour laws are robust enough to protect the rights of Zambian and other African workers. Many are also sceptical as to whether the Zambian judicial system can withstand political pressure from the executive branch not to severely punish the valuable Chinese investors.  In addition to this incident, in 2005 an explosion at a copper plant owned by China Nonferrous Metal Mining Group killed 46 miners.  This tragedy raised concerns about the ability of African safety regulatory regimes to mitigate operational risks and to protect the environment – especially in extractive industries. Critics claim China has taken advantage of the snail-paced rate of institutional reform, weak judicial systems and poor safety enforcement in African countries.

Notwithstanding the above reservations, the China-Africa story is not all doom and gloom. For example, consider the perceived negative relationship between Chinese investment and good governance. Against prevailing conventional wisdom, there is no evidence that Chinese companies are more attracted to dictatorially run, conflict-ridden African nations. Certainly, the examples of Gabon and Sudan amongst others are used to exemplify the negative effects. Nevertheless, the Chinese also heavily invest in countries like Mauritius, Ghana, Botswana and South Africa, which are beacons of good governance on the continent. In regard to addressing institutional weaknesses, many African governments are beginning to use international mechanisms that can assist in mitigating their institutional shortcomings and enhance transparency.  For instance, approximately 20 African countries are seeking candidacy in the Extractive Industries Transparency Initiative (EITI). The EITI requires that governments publish what they have received in the form of revenues, royalties, and other payments from extractive companies; and companies publish what they have paid to governments.

To conclude, African countries have long been neglected as viable trading partners by many Western countries (beyond the oil industry).  The Chinese have engaged beyond oil and minerals (although these constitute a large part of their African investments), trading in equipment and machinery for construction and building telecommunications infrastructure which are helping pull Africa into the 21st century. In fact, China’s single largest investment on the continent is the purchase of a 20% stake in South African Standard Bank. While it is undeniable that Chinese companies must improve labour conditions, transparency and safety standards, ultimately it is the responsibility of African governments to grow strong institutions that deal effectively with the externalities of the vast Chinese investment.

[2] Ibid.

[3] The Economist: Africa and China. http://www.economist.com/debate/days/view/465 (Accessed on Nov 2 2010)