TRIPs fails to benefit developing countries and a “one-size-fits-all” approaches are misguided

One of the principal criticisms made of the TRIPS agreement is that it offers an inappropriate uniform standard across a diverse range of states. Developed countries generally already possess suitable levels of IPR protection, and are home to the overwhelming majority of IP rights-holders that stand to benefit from increased protection (Chang, 2001: 23). Most developing countries, on the other hand, may incur significant costs from raising domestic standards to the required level – taking scarce resources away from other crucial sectors – and from the increased payments to be made to developed world rights-holders. A 2001 World Bank report suggested that in the short term TRIPS effectively constitutes an annual $20 billion transfer of wealth from technology-importing developing countries to technology-exporting developed countries (cited in Dutfield & Suthersanen, 2004). Similarly, Philip McCalman (2005) estimates that the beneficiaries of TRIPS are just a handful of developed countries: primarily the USA and various Western European states. Countries from India to Brazil – and even South Korea – meanwhile suffer through their reliance on technology imports. While most countries could still benefit in the long-term, McCalman argues that the advantages will nonetheless be distributed overwhelmingly amongst the leading developed countries. The Commission on Intellectual Property Rights also arrived at similar conclusions in its 2002 report on IPRs and development – assessing the argument that a stronger IPR regime would offset short-term implementation costs over the long-term, they concluded that: “…for most developing countries with weak technological capacity, the evidence on trade, foreign investment, and growth suggests IP protection will have little impact. Nor is it likely that the benefits of IP protection will outweigh the costs in the foreseeable future. For more technologically advanced developing countries, the balance is finer. Dynamic gains may be achieved through IP protection, but at cost to other industries and consumers.” (CIPR, 2002a: 12) The Commission emphasised that developing countries do require different IP strategies as depending on their level of development. Contrary to the claims of TRIPS advocates, “rapid growth is more often associated with weaker IP protection” and does not start to become important until a country is well into upper-middle income category (CIPR, 2002b:22). So, while the WTO may claim to take developing countries needs into account, its emphasis on the need for a single high standard of IPRs appears to run contrary to the historical evidence. Indeed, Ha-Joon Chang observes of Europe and the USA that they themselves were “still routinely violating the IPRs of other countries’ citizens well into the twentieth century” (2001: 10). The flexible use of IP regimes to further economic interests was also successfully adopted by East Asian states such as Korea and Taiwan until very recently, where imitation and reverse-engineering were all considered important methods for developing technological and innovative capacity (CIPR, 2002b: 19-20). Strong IPR protection therefore appears to be a consequence, rather than a cause, of economic development. The potential social cost of TRIPS for poorer countries has meanwhile been particularly evident over the issue of access to medicines, most notably with regard to antiretroviral drugs (Lanoszka, 2003). Before TRIPS, many countries either did not patent medicines or provided less than the robust 20-year protection subsequently introduced. Contemporary TRIPS rules, however, drive up costs to unaffordable levels by enabling monopoly pricing and excluding cheaper ‘generic’ alternatives. In 2001, by way of example, a group of 39 pharmaceutical companies took the South African government to court to prevent their use of compulsory licensing of generics, although intense public pressure did eventually force them to abandon the case (Sell & Prakash, 2004). However, the incident showed how multinational corporations attempt to use TRIPS to pursue private gain at clear cost to the public good[iii]. While some flexibilities in interpreting the agreement in light of public health concerns have since been established, as mentioned above, they often remain unused owing to cost, complexity, and the threat of trade ‘retaliation’ (O’Farrell, 2008). The few allowances that are granted to developing countries in the TRIPS agreement can therefore be seen as insufficient, and the numerous limitations far too restrictive. As Constantine Michalopoulos (2003) notes, TRIPS does not actually offer the same range of ‘special and differential treatment’ (SDT) as other WTO agreements. Once the transition periods have expired, developing countries must implement the same rules on scope and duration of protection – regardless of circumstances – as the most advanced developed countries[iv]. Any form of permanent SDT is not an option: LDCs can no longer exempt sectors from protection, or reduce patent duration, as a means of addressing social or economic concerns. The flexibilities within the agreement, as seen above, therefore offer only limited room for manoeuvre. Robert Wade (2003) suggests that as a result this constitutes a distinct ‘shrinking of the development space’: a reduction in states’ policy-making autonomy that denies them the paths to development that were taken by others before them. Furthermore, the agreement is “vague at points where vagueness benefits the developed countries, and precise at points where precision works against developing countries” (Wade, 2003: 630). The obligations of developing countries and the rights of developed are both enforceable to a far greater extent than the rights of the developing and the obligations of the developed. There is, for example, despite the clearly stated objective of Article 66.2 regarding technology transfer, little evidence of a sustained effort by developed states to honour such commitments (Moon, 2008). Conclusion The legitimacy and effectiveness of the TRIPS agreement is clearly vulnerable to numerous criticisms, particularly so with regard to developing countries. It is noteworthy that even prominent free trade advocates such as Martin Wolf (2005: 217) criticise the ‘hypocrisy’ of TRIPS, seeing it as a rent extraction device for many developing countries, with potentially devastating effects on education, public health, and economic development. Even within those countries who appear to gain most from the agreement, the benefits may only accrue to particular sections of society, so that “the real winners from TRIPS are not advanced countries, but rather the large corporations that pressed for its adoption” (Archibugi & Filippetti, 2010: 144). TRIPS has also not provided a solution to policy-makers’ concerns, as trade balances have continued to erode, while the recent emphasis on private rights may even serve to inhibit innovation and the spread of knowledge in developed countries in the long term (Hesse, 2002). While Archibugi & Filippetti (2010) caution against attributing too much importance to TRIPS, it is apparent that the agreement does not function as advertised. From a global perspective, it seems clear that adopting a ‘one-size-fits-all’ approach to IPRs is entirely inappropriate. A tiered system, offering more substantive special and differential treatment according to countries’ developmental needs, would have been more suitable. However, it remains to be seen whether major reform of the agreement is likely, given that TRIPS is now firmly established within the WTO system.