MIL-OSI Asia-Pac: WTO Members Endorse Extended TRIPS Transition Period for LDCs

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Source: Small Island Developing States

The past month has seen several developments involving trade rules and support measures for least developed countries (LDCs) at the World Trade Organization (WTO), most notably the prolongation of a transition period for putting into effect the bulk of the Organization’s intellectual property rules.

As per the extension agreed in late June, the transition period, which would otherwise have expired at the beginning of July, is now set to last until 1 July 2034. The WTO’s intellectual property rules, including the transition periods for LDCs to implement them, are set out in Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement).

When the TRIPS Agreement took effect in January 1995, it included an article that would exempt LDCs from having to apply the majority of its provisions, with the exception of those articles on national treatment, most favored nation treatment (MFN), and “multilateral agreements on acquisition and maintenance of protection,” which specifies that the national treatment and MFN obligations “do not apply to procedures provided in multilateral agreements concluded under the auspices of WIPO relating to the acquisition or maintenance of intellectual property rights.”

This article – Article 66 – named the “special needs and requirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base” as the rationale for providing this additional time.

That initial transition period under Article 66.1 was due to last for a decade and has since been renewed on multiple occasions, with the most recent extension agreed in 2013 for an eight-year period. A separate LDC transition period for applying WTO intellectual property rules on pharmaceutical products remains in place until 2033, operating on a different timeframe than the Article 66.1 transition period.

LDC graduation question persists

In late 2020, Chad, on behalf of the LDC Group, submitted a request for prolonging the transition period under Article 66.1, citing how the COVID-19 pandemic has complicated further the long-standing challenges that these countries face when it comes to developing “a viable technological base” and having the resources necessary to put the full force of the TRIPS Agreement into effect.

The submission from the LDC Group also raised another question, which nods towards a larger discussion underway at the WTO over whether and how to accord special and differential treatment (S&DT) to LDCs after they have graduated from that UN classification, given that they will still face severe socioeconomic constraints.

“Sustainable and smooth graduation is a challenge for the LDCs,” the proposal notes, citing a 2016 report from the UN Conference on Trade and Development (UNCTAD) that states that “the challenges of the post-graduation period are a continuation of those that characterized the pre-graduation period.”

In their request to extend the TRIPS transition period, the LDC Group had called not for a time-bound extension, but one that would persist “as long as the Member remains in the category of least developed country and for a period of twelve years” from when an LDC has graduated from that status. This is in line with a separate proposal from Chad, on behalf of the LDC Group, for a Ministerial Conference decision that would extend all “support measures” normally provided to LDCs under WTO rules to graduated LDCs for a 12-year period.

According to a WTO summary of the 29 June meeting of the TRIPS Council where the Article 66.1 extension was endorsed, the final decision to set the transition period for another 13 years and to exclude graduating LDCs came after those elements of the Chad proposal – the unlimited exemption for existing LDCs and the application of a time-bound period for graduating LDCs – did not gain the approval of the wider WTO membership.

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By Sofía Baliño, Communications and Editorial Manager, Economic Law and Policy, IISD

MIL OSI Asia Pacific News