TRIPS wasn’t all bad.

International trade rules exist in the realm of global power politics. Based on the text and the WTO's recent dispute resolution decisions, developing states have significant discretion in deciding what enforcement resources to dedicate to intellectual property protection and in establishing penalties for rights violations. Yet developed states and intellectual property rights-holders continue to maintain that the TRIPS Agreement imposes a much more stringent obligation on developing states. This claim may be backed by traditional power-politics threats-namely, that developing states may lose trade preferences or foreign direct investment if they fail to adhere to a more rigid view of the intellectual property protections. Similarly, developing countries may formally have the right to retaliate against a developed country's violations of trade rules in agriculture or other areas but nonetheless refrain from doing so out of fear of the backlash from developed countries. What is left is a potential separation between what the TRIPS Agreement actually requires of governments and what developed states claim the TRIPS Agreement requires. In this sense, the meaning of the TRIPS Agreement and WTO enforcement provisions is contested as a matter of general international politics, with the text of the Agreement and the rulings of the decisions of WTO dispute resolution bodies as only secondary considerations in the development of a state's trade policy.

The possibility of the withdrawal of special trade preferences-benefits that developed states can extend to developing states under the WTO's Generalized System of Preference (GSP)-due to fights over intellectual property rules is real.9 o The US government withdrew GSP benefits from Argentina in 1997 over a disagreement regarding patent test data exclusivity.' Similarly, the US government withdrew GSP benefits from South Africa in 1998 after South Africa announced its intention to make use of the TRIPS compulsory licensing provision to produce generic versions of several HIV/AIDS drugs.

The use of such power plays was not made possible, however, by the creation of the TRIPS Agreement. Before the TRIPS Agreement came into force, the US and European countries had also made continued access to GSP benefits conditional on the protection of American and European intellectual property. The US gave "great weight" to the developing countries' history of respect for intellectual property rights when deciding whether to grant GSP preferences, even before developing states had any international trade obligations to do so."1 The European Communities also denied GSP benefits to Korea in 1984 (a decade before the entry into force of the TRIPS Agreement) for its failure to offer protection for European companies' intellectual property. 19 4 In addition, developed states applied unilateral sanctions against developing countries regarding intellectual property protections. The US imposed import restrictions on Brazil in 1988 for its failure to respect American grants of intellectual property rights and threatened India with similar sanctions.

Yet in spite of such threats (or use) of the denial of trade preferences, some developing states may have sufficient economic and political power to resist this political pressure. Most notably, China, Brazil, India, and South Africa appear to be in a position to make use of the full flexibilities that the TRIPS Agreement provides.'19 For instance, in the 1998 dispute between the US and South Africa, the South African government resisted the US's demand to end their HIV/AIDS medicines program. The South African government joined forces with an American AIDS advocacy group, ACT UP, and waged a public relations campaign to publicly embarrass the Clinton Administration for its resistance to national medicines programs.197 The Clinton Administration subsequently changed its position, reinstated South Africa's GSP benefits, and publicly announced that it would not resist sub-Saharan countries' efforts to compulsory license HIV/AIDS drugs.'98 In a similar move, the Brazilian government adopted a free HIV/AIDS drug program for all registered AIDS patients.'99 To decrease the cost of this program, the Brazilian government threatened to compulsory license certain HIV/AIDS drugs. To avoid compulsory licensing, Merck and Roche offered the Brazilian government a 40 to 60 percent price reduction on HIV/AIDS medicines.

India, Brazil, and China have also been willing to defend their intellectual property practices at the WTO. The Chinese government was largely successful in defending its intellectual property practices against the US in the China-IPR case. The Indian and Brazilian governments are also challenging the EU's practice of seizing generic drugs, which the EU considers infringing, that originate in India and are destined for third-party markets. 20 1' Brazil and India maintain that the shipment of these drugs is legal under the WTO 2003 Decision on TRIPS and public health and thus the EU's practice of preventing these drugs from reaching third-party markets is illegal. These claims, if successful, would benefit developing countries that buy generic drugs, even though most of these countries are not party to the WTO complaint. Thus, even if not all developing states will fully take advantage of the flexibilities that the TRIPS Agreement offers, some large-market developing countries will be able to. The TRIPS Agreement is not necessarily welfare improving for developing countries, but it has developed in ways that grant some developing states greater bargaining leverage.