Impact of WTO “Plus” and “Extra” Issues on Developing Countries

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-Cover-

Impact of WTO “Plus” and “Extra” Issues on Developing Countries

Name- Matchima Borrisutphongsakul

Mastertrack – International Trade and Investment Law Name of supervisor - Dr. J.H. (James) Mathis

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Abstract

Even though the Trans-Pacific Partnership (TPP) agreement has been withdrawn by the United States, its impact, coupled with the recent Preferential Trade Agreements (PTAs) between the European Union (EU) and the US, has been cause for anxiety in developing countries when negotiating a PTA with the EU and the US. This is because these new PTAs are more comprehensive and complex than the older ones, in addition to having a deeper integration and being more detailed, in the light of border coverage. Scholars call this “deep integration”. The sectorial coverage of deep agreement is further divided into two groups: “WTO Plus”, which relates to the existing provisions under the World Trade Organization (WTO) but has deeper commitments, and “WTO Extra”. The WTO Extra’s provisions fall outside the scope of the WTO. The recent PTAs can be negotiated between developed and developing countries with different stages of economic development since they go beyond the reduction of tariffs to include topics outside the commitment in the WTO agreement. As a result, developing countries are likely to be impacted by these PTAs. However, if the country decides to gain more preferential market access to the big import and export countries such as the US and the EU, they cannot avoid negotiating PTAs.

The first part of this thesis compares the PTAs of the US and the EU with developing countries. It also attempts an explanation of WTO “Plus” and “Extra”. In order to allow a more in-depth understanding of these policies, the second section compares three provisions, i.e., Intellectual Property (“WTO Plus” and “WTO Extra”), Competition Policy (“WTO Extra”), and Environmental Law (“WTO Extra”) between the US (the free trade agreement between the US and Singapore and the TPP, wherein Vietnam is part of the TPP’s party) and the EU’s PTAs (FTAs between the EU and Singapore and the EU and Vietnam). These are the three most controversial topics in developing countries. Non-governmental organizations (NGOs) place a lot of importance to these issues since they seem to directly affect the citizens of developing countries, claiming that the Intellectual Property and Competition Policy chapters hinder the competitiveness of domestic companies in the market. Moreover, the Intellectual Property provision may have a detrimental effect on the accession of essential pharmaceuticals. The Environment chapter may also affect the rights of agricultural producers in developing countries. The third section analyses the impact of the “WTO Plus” and “WTO Extra” provisions on developing countries. The fourth and concluding section offers suggestions in negotiating these provisions to developing countries.

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The WTO’s 2011 report on the WTO and preferential trade agreements shows that 300 PTAs were entered into force1, where all members of the WTO are party to at least one PTA2. PTAs include reciprocal preferential agreements in bilateral, multilateral or regional agreements, and may be created in the form of a free trade agreement (FTA). It has to be noted that PTAs were introduced before the establishment of the General Agreement on Tariff and Trade in 1947. Before the creation of the WTO, countries secured and strengthened their trade relations in various ways, such as through colonial preferential agreements and bilateral commercial treaties, in order to achieve more openness and liberalization in trade.

The General Agreement on Tariffs and Trade 1994 (GATT) obliges members of the WTO to comply with the basic framework of the WTO, which is discrimination. The non-discrimination rule relating to PTAs is stated in Article I of the GATT (Most-Favoured-Nation Treatment; MFN), which requires members to not provide differential treatment, favouring some countries’ like products over those of other contracting parties. However, the WTO allows members from the PTAs deeper integration than the WTO itself.

The formation of PTAs has to fall under specific conditions under WTO agreements, i.e., Article XXIV of GATT 1994 (GATT), Article V of (General Agreement on Trade in Services (GATS), and the Enabling clause. Under Article XXIV of GATT, the parties of these PTAs can justify a violation of Article I. It also allows member parties of the WTO to negotiate an FTA or customs union among parties to increase elimination of trade restrictiveness. The parties of the FTA or customs union will have access to more favourable advantages than third parties. However, if challenged, the members of the FTAs or customs union need to prove that the provisions of the GATT make impossible the formation of a customs union or an FTA3. In the Turkey-Restrictions on Imports of Textile and Clothing

Products case, the Appellate Body states the following:

two conditions must be fulfilled for invoking Article XXIV as a defence. First, the party claiming the benefit of this defence must demonstrate that the measure at issue is introduced upon the formation of a customs union that fully meets the requirements

1

World Trade Organization, The WTO and preferential trade agreements: From co-existence to coherence, (World Trade Report, 2011) 47.

2

Ibis 42.

3

Turkey: Restrictions on Imports of Textile and Clothing Products-Report of Appellate Body (22 October 1999) WT/DS34/AB/R.

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of Sub-paragraph 8(a) and 5(a) of Article XXIV. Second, the party must demonstrate that the formation of that custom union would be prevented if it were not allowed to introduce the measure at issue.4

According to Article XXIV:8(a), a customs union indicates preferential treatment for a specific country. Thus, two countries eliminate duties and ORRCs on substantially all trade and have the same duties and regulations imposed on a third country. According to Article XXIV:8(b), an FTA has only an internal preferential policy between its members, but no external component. As per Article V of GATS, this provides the conclusion of PTAs in the area of trade in services which seem similar to Article XXIV of GATT. However, there are some differences. Article V.1 of GATS states that a PTA has substantial sectorial coverage and Article V.4 of GATS requires that PTA members cannot raise the overall level of barriers against non-members. The enabling clause, such as the 1979 Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, allows the establishment of PTAs in trade in goods between developing member countries. Although the WTO was created to reduce trade barriers between countries, members continue to use specific conditions under the WTO agreements to create PTAs between them in order to deepen economic integration. This deeper integration occurs because members require increased trade openness to promote trade in certain sectors, and more broadly, to allow for economic integration5 or deep agreements. These deep agreements occur throughout the world, between developed countries, developing countries, and between developed and developing countries. Moreover, most current PTAs go beyond elimination and reduction of tariff, covering issues affecting domestic regulation (or behind-the-border measures) of the parties of PTAs, including services, investment, intellectual property protection, competition policy, environmental laws, government procurement, labour, and so on. These issues, called “WTO Plus” and/or “WTO Extra”, require change or amendment of the domestic regulation for compliance; thus, veto players argue that a country, specifically a developing country, should not enter into such PTAs, resulting in less ratification for these PTAs6.

It cannot be denied that there is a significant gap in the trade competitiveness between developed and developing countries. It seems that deep PTAs force equal rules on unequal

4

Ibis, para. 58

5

World Trade Organization (n.1) 44.

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partners7. As a result, negotiating the deep PTA might adversely affect developing countries. The three topics under the deep PTAs, namely competition policy, intellectual property and environment, are cause for controversy in some developing countries that have weak regulation and enforcement in these areas. Moreover, these issues are relatively novel, and the high standards of developed countries are imposed on developing countries. The veto powers in developing countries are primarily concerned about Intellectual Property Rights issues, since they are directly related to access to essential medicine. Stricter obligations under the Intellectual Property Rights issue may result in pharmaceutical products becoming more expensive and thus, not easily accessible to all citizens. Furthermore, Veto powers try to influence a government’s stand on competition policy areas, including state-owned enterprises, because they think that a competition policy could result in government pharmaceutical producers being banned from manufacturing essential medicines. The veto powers have also begun focusing on environmental laws in recent PTAs. They claim that these laws will pose difficulties to farmers and agricultural producers in developing countries. Furthermore, the veto powers consider these three aspects to be related, resulting in undermining the competitiveness of domestic companies in developing countries8.

This thesis will study the selected deep PTAs and estimate the impact of the aforementioned three chapters on developing countries. Thus, the first section of this thesis will elaborate on the WTO Plus and WTO Extra issues. The second section will compare the US and the EU’s WTO Plus and Extra provisions with the standards of the WTO agreement. In order to compare EU and US PTAs and discuss their impact on developing countries, this paper examines those PTAs negotiated between those two regions with developing countries. The selected PTAs negotiated by the US are the Trans-Pacific Partnership (TPP) Agreement (of which developing countries such as Vietnam are parties) and the FTA between US and Singapore. The selected PTAs negotiated by the EU are the FTA between EU and Singapore and FTA between the EU and Vietnam (which is poised to conclude in 2018). The TPP is selected because it is the newest PTA of the US as same as the EU-Vietnam FTA for the EU. Singapore’s FTAs are selected because Singapore is a valuable example of an advanced developing country. Singapore seems to have high standards of domestic regulations and a high-income economy9. Following this evaluation, the third part of this paper will analyse

7

Rick Rowden, ‘9 ways the TPP is Bad for Developing Countries’ (Foreign Policy Magazine, 7 July 2015)

<http://foreignpolicy.com/2015/07/07/9-ways-the-tpp-is-bad-for-developing-countries/> accessed 15 May 2018.

8

ibid.

9

The World Bank In Singapore, ‘The World Bank In Singapore’ (The World Bank, 19 April 2018) <

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and deduce the impact of such WTO Plus and Extra provisions on developing countries. In conclusion, the thesis will provide suggestions where developing countries need to negotiate WTO Plus and Extra issues.

WTO “Plus” and WTO “Extra” issues

According to the World Trade Report 2011, the number of PTAs has been on a continuous increase. In 2010, 300 PTAs were enforced, both developed and developing countries participating in the enlargement of the number of PTAs. The report also claims that 75 per cent of notified PTAs are the result of agreements between developing and developing countries (south-south agreements) and 25 per cent are the result of agreement between developing and developed countries (south-north agreements). This shows that developing countries are showing increased participation in world trade and are more concerned with preferential trading relationship over the unilateral preferential tariffs provided by developed countries (Generalized System of Preferences; GSP).

The scope of recent PTAs focuses on deeper integration rather than reduction of tariffs. Old PTAs or PTAs before the establishment of the WTO focused primarily on border measures since, at the time, applied tariffs between countries were quite high. Before the WTO, the average tariffs among countries were between 20 to 30 per cent10. This type of PTA is called a “simple agreement”. However, after the establishment of the WTO, the provisions in the GATT oblige members to include more trade liberalization such as non-discrimination, and transparency. The obligations under the GATT reduced the applied border tariff between members to a mere 4 per cent in 200911. Thus, the scope of exchanging preferential border measure is unlikely to be extensive. The recent trade agreements, called “deep agreements”, focus on domestic policies that fall inside the border. The deep agreements have a wide scope, but they can be largely divided into two dimensions12. The first dimension is the extensive margin which refers to the coverage of an agreement beyond the reduction of tariffs, such as the harmonization of national regulations. The second dimension is the intensive margin, which focuses on the institutional depth of an agreement, such as the formation of customs or monetary union.

10

World Trade Organization (n.1), 124.

11

Ibid.

12

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As discussed above, tariffs are no longer a priority when negotiating recent PTAs. There are claims that the new PTAs signed by the US and the EU go beyond the WTO agreements13. Mavroidis and Sapir examined the EU and the US’s PTAs and came up with ways to identify policy areas in such PTAs. They found that there are 52 policy areas in such agreements, which can be further divided into two groups. The first group is called the “WTO Plus”, which includes policy areas that fall under the current WTO commitments and are already subjected to a form of obligation in WTO agreement. However, they are more detailed and have more binding provisions than the WTO. The second group is the “WTO Extra”, which includes provisions outside the WTO regime. The table below lists the 52 policy areas as they fall within WTO Plus or WTO Extra.

Table 1: WTO “Plus” and WTO “Extra” policy areas in PTAs

WTO “Plus” WTO “Extra”

PTA industrial goods PTA agricultural goods Customs administration Export taxes

SPS measures

State trading enterprises

Technical barriers to trade Countervailing measures Anti-dumping State aid Public procurement TRIMS measures GATS TRIPS Anti-corruption Health Competition policy Human rights Environmental laws Illegal immigration IPR Illicit drugs Investment measures Industrial cooperation Labour market regulation Information society Movement of capital Mining Consumer protection Money laundering Data protection Nuclear safety Agriculture Political dialogue Approximation of legislation Public administration Audiovisual Regional cooperation Civil protection

Research and technology Innovation policies SMEs Cultural cooperation Social matters 13

Henrik Horn, Petro C. Mavroidis and Andre Sapir, ‘Beyond the WTO? : An Anatomy of EU and US Preferential Trade Agreements’ [2009] The World Economy 1565.

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Economic policy dialogue Statistics

Education and training Taxation

Energy Terrorism

Financial assistance Visa and asylum

Source: Horn et al. (2010)

Since 1958, the average number of PTAs, which include WTO Plus issues between developing countries and developed countries, has been increasing. Moreover, the PTAs of developing countries and developed countries which came into force since 2000 cover more WTO Extra provisions than previous PTAs14. However, it is noticeable that although the WTO Plus provisions have become legally enforceable in developing countries, the WTO Extra is yet to find legal enforceability. The reason behind this is that developing countries have higher barriers in goods and services than developed countries. Hence, developed countries may decide to use a PTA with WTO Plus provisions as a tool to obtain a deeper level of commitments than those established in the WTO. Developed countries might provide a fuller and greater security on market access in their countries in exchange for obtaining a deeper level of commitments. Apart from that, because WTO Plus provisions have already been stated in the WTO agreements, it is easier for developing countries to adopt the WTO Plus in their legal regime. In contrast, the WTO Extra seems more difficult to enforce in developing countries. Although some developing countries such as Singapore, Chile and the Republic of Korea are willing to negotiate these areas, others do not have the proper domestic legislations in place. As a result, it appears that developed countries are unilaterally seeking to export their regulatory regime to developing countries. However, some of these WTO Extra regimes, such as competition policy, intellectual property rights, investment, and the movement of capital, are of interest to developing countries that wish to encourage investors to invest in their countries15. Thus, it would be better to enforce these areas in developing countries.

14

Ibid, 131.

15

David Hindman, ‘The Effect of Intellectual Property Regimes on Foreign Investments in Developing Economies’ [2006]

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The WTO “Plus” and WTO “Extra” in the US and the EU regimes:

Similarity and Difference

The WTO “Plus” and WTO “Extra” provisions mostly appear in the US and the EU’s PTAs. Some researchers are of the view that developed countries (i.e., the US and the EU) export their regulations to developing countries when negotiating a PTA. Consequently, this section focuses on the following issues: Intellectual Property Rights and Competition Policy and Environment chapters in EU and US PTAs to compare the similarities and differences between both regimes and compare them with WTO Agreement obligations. These issues have been chosen because veto powers in developing countries normally protest the joining of PTAs with the EU and the US, claiming that these chapters link together and have a negative impact on developing countries. The Intellectual Property and Competition Policy chapters hinder the competitiveness of domestic companies in local markets. Moreover, the Intellectual Property provision may have a detrimental effect on the accession of essential pharmaceuticals. The Environment chapter may also affect the rights of agricultural producers in developing countries16. The third section analyses the impact of the “WTO Plus” and “WTO Extra” provisions on developing countries. Thus, the selected US PTAs (TPP and FTA between US and Singapore) and EU PTAs (FTAs between EU and Singapore and between EU and Vietnam) are examined.

Intellectual Property Rights (IPRs)

Developed countries seek to establish IPR protection rules under a PTA because their market access in IP-related products are reduced in developing countries with a weak IP protection regulation.17 Thus, developed countries strive to standardize the level of IP protection that may be different between the parties18. IPR provisions are the concern of both the WTO Plus and WTO Extra. WTO agreements contain Trade-Related Aspects of Intellectual Property (TRIPS) Agreement, and the provision in some of the new PTAs reaffirms the TRIPS agreement, i.e., harmonization of standards, enforcement, national treatment, and

16

FTA Watch, ‘Fighting FTAs: the experience in Thailand’ (bilaterals.org, October 2007) <

https://www.bilaterals.org/?fighting-ftas-the-experience-in&lang=en> accessed 18 June 2018. See Also Pratch Rujivanarom, ‘Activists sound alarm over trade deal’ The Nation (13 June 2018) <

https://www.bilaterals.org/?activists-sound-alarm-over-trade&lang=en> accessed on 18 June 2018.

17

Enrique Valerdi Rodriguez, ‘The European Union Free Trade Agreement: Implications for Developing Countries’ [2009] Real Instiuto Elcano 1.

18

Meir P. Pugatch, ‘A Transatlantic Divide? The US and EU’s Approach to the International Regulation of Intellectual Property Trade-Related Agreements’ [2007] Ecipe Working Papers 1.

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favoured nation treatment. However, the PTAs may consider the obligations under the TRIPS agreement unsuitable for their IP protection, hence negotiating an obligation, resulting in the TRIPS “Plus”. Moreover, IP protection obligations under the deep PTAs may also be categorized in the WTO “Extra” group at times, since, in some PTAs, the IPRs chapter refers to other international agreements that are not included in the TRIPS agreement19 which oblige parties of the PTAs to provide IP protection that is not stated in the TRIPS agreement. There are three major areas of IPRs that changed considerably when they became WTO Plus or Extra provisions. The first area is copyrights: both the US and EU’s PTAs increase the level of copyrights protection by strengthening the ability of copyrights holders to prevent others from using their works. The US’s PTA tends to extend the period of copyrights protection as long as the period stated in US domestic law20. The EU, on the other hand, refers to multilateral agreements such as the WIPO Copyrights Treaty of 199621. The second area is trademarks: the US and the EU decide to have a higher level of trademarks protection than provided in the TRIPS Agreement. However, they use a different regime in order to reach their goal. The US expands the types of marks, such as scent marks, that can be registered as trademarks, as well as the period of protection, whereas the EU refers to multilateral treaties to provide a higher level of protection22. The last and most complex area is patents, particularly pharmaceutical. Both the US and EU’s PTAs allow a longer period of patent protection when there is an unreasonable delay in the process of granting patents or in the process of authorizing patents for market use23. Furthermore, they include data exclusivity in the PTAs aimed at protecting and safeguarding the data of registered pharmaceutical products. Data exclusivity is a very controversial issue. Some scholars think that it will encourage inventors to produce new pharmaceutical products; others argue that it will create a monopoly and lead to very expensive medicines. The US-led PTAs adopt the period of protection under Section 355 of the Federal Food Drug and Cosmetic Act of 1997, which allows a five-year period for new drugs and three years for new indication of existing drugs24. On the other hand, the EU domestic regulation (Directive 2001/83/EC) provides a ten-year protection period for data exclusivity, but the EU-led PTAs do not adopt this regime. According to the selected PTAs, legal differences between the TRIPS regime, the EU regime,

19

Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10) 1579.

20 Meir P. Pugatch (n 12) 17. 21 Ibid. 22 Ibid, 18-19. 23 Ibid. 16. 24 Ibid, 14.

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and the US regime can be found, as listed in the table below. In order to not delve into too much detail and stay within the limits of this thesis, Table 2 compares only the important provisions of patent and plant variety protection, since these areas relate to access to medicines, which has the highest impact on developing countries.

Table 2: Differences between TRIPS and TRIPS-Plus and TRIPS-Extra in the light of patents protection under selected US and EU PTAs

The TRIPS Agreement

The US’s IP protection regime The EU’s IP protection Regime US-Singapore FTA25 TPP26 EU-Singapore FTA27 EU-Vietnam FTA28 Scope Copyrights, Trademarks, GIs, Industrial Designs, Patents, Layout-Designs of Integrated Circuit, Undisclosed information All IP scope under TRIPS, including specific provisions on data protection and plant variety rights. All IP scope under TRIPS, including specific provisions on data protection and plant variety rights.

All IP scope under TRIPS, including specific provisions on data protection and plant variety rights. (Article 11.2) All IP scope under TRIPS, including specific provisions on data protection and plant variety rights. (Article 2)

Patents Protects any inventions that are new, innovative, and capable of industrial application. (Article 27) Provides exclusive rights to prevent third parties from making, using, processing, selling, offering for sale, or import patented products. (Article 28) Protects any invention, whether a product or a process, in all fields of technology, provided that the invention is new, innovative, and is capable of industrial application (Article 16.7). Parties have to ratify or accede to the Patent Cooperation Protects a product or process in all fields of technology, provided that the invention is new, innovative, and is capable of industrial application. Moreover, parties shall accept patents that are available for inventions claimed as at least one of the following: new

Parties have to comply with the obligations under the Patent Cooperation Treaty and make reasonable efforts to comply with Article 1 to Article 16 of the Patent Law Treaty in a manner consistent with their domestic law and procedures. (Article 11.29) Parties have to Parties affirm their rights and obligations under the Patent Co-operation Treaty and shall simplify and develop its patent registration procedures using the Patent Law Treaty, inter alia, as a reference point. (Article 8.3) According to 25

Free Trade Agreement between US and Singapore, concluded on 15 January 2003 < https://ustr.gov/trade-agreements/free-trade-agreements/singapore-fta/final-text> assessed on 17 April 2018.

26

Trans-Pacific Partnership Agreement (TPP) < https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/tpp-full-text> assessed on 17 April 2018.

27

Free Trade Agreement between EU and Singapore, Authentic text as of May 2015 <

http://trade.ec.europa.eu/doclib/press/index.cfm?id=961> assessed on 30 April 2018.

28

Free Trade Agreement between EU and Vietnam, Agreed text as of January 2016 <

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Allows third-party use without authorization by the right holder in some situations. (Article 31)

Term of protection is 20 years from the filing date. (Article 33) Treaty (1984) (Article 16.1). When there is an unreasonable delay in the process of registration, parties shall extend the term of a patent to compensate the patent owners. (Article 16.7) uses of a known product, new methods of using a known product, or new processes of using a known product. (Article 18.37) Parties have ratified or acceded to the following agreements: (1) The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (1977), as amended on September 26, 1980. (2) The Patent Cooperation Treaty, as amended September 28, 1979. (Article 2) If there are unreasonable delays in a party’s issuance of patents, that party shall provide the means to, and at the request of the patent owner, shall adjust the term of the patent to compensate for such delays. (Article 18.46) make available an extension of the duration of the rights conferred by patent protection to compensate the patent owner for reduction in the effective patent life as a result of the administrative marketing approval process. (Article 11.31) pharmaceutical products, parties shall provide for an adequate and effective mechanism to compensate the patent owner for reduction in the effective patent life resulting from unreasonable delays in the granting of first marketing authorization in the respective territories. (Article 8.3)

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11 Data Protection Requires that WTO members protect undisclosed test data against unfair commercial use, but does not state how long to protect. Parties have to protect information to market for a period of at least five years from the date of approval for a pharmaceutical product and ten years from the date of approval for an agricultural chemical product. (Article 16.8) Parties have to protect data to market for at least ten years from the date of marketing approval of the new agricultural chemical product in the territory of the Party. (Article 18.47)

Parties have to protect:

(i) information; or (ii) the marketing approval granted to the person that submitted such information, for at least five years from the date of marketing approval of the new pharmaceutical product in the territory of the party. (Article 18.50) Parties have to protect Test Data Submitted to Obtain an Administrative Marketing Approval to put a Pharmaceutical Product on the Market at least five years from the date of approval (Article 11.33) and a period of at least ten years from the date of approval for Test Data Submitted to Obtain an Administrative Marketing Approval to put an Agricultural Chemical Product on the Market. (Article 11.34) Parties shall protect confidential information and data submitted to the government or governmental agencies for at least five years from the date on which the Party granted approval to the person that produced the data for approval to market its product. (Article 9) Plant Variety Requires WTO Members to protect new plant varieties using patent rights, a sui generis system, or some combination thereof. (Article 27) Parties needs to ratify or accede to the UPOV Convention 1991. (Article 16.1) Parties have to ratify or accede the International Convention for the Protection of New Varieties of Plants, as revised at Geneva, March 19, 1991. (Article 2) Parties have to comply with their obligations under the International Convention for the Protection of New Varieties of Plants. (Article 11.35) Parties shall protect plant varieties rights in accordance with the International Convention for the Protection of New Varieties of Plants (UPOV) as lastly revised in Geneva on March 19, 1991, (also known as the “1991 UPOV ACT”). (Article 11)

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obligations provide Civil and Administrative procedures and remedies concerning the enforcement of IP rights and also provide the border measures to prevent the release of infringement IP-related products. (Part III) ensure that they have fair and transparent judicial and administrative proceedings for the enforcement of intellectual property rights. (Article 16.9) Parties have to adopt and reasonably implement a policy to prevent the release of infringement IP-related products in the area of border measures. (Article 16.9) endeavour to make laws, regulations, procedures and administrative rulings of general application concerning the protection and enforcement of intellectual property rights as transparently as possible. (Article 18.72) Parties have to adopt and reasonably implement a policy to prevent the release of infringement IP-related products in the area of border measures. (Article 18.76)

provide fair and equitable procedures for enforcement of intellectual property rights. (Article 11.36) Requires Parties to cooperate in the area of border measures. (Article 11.48) their commitments under the TRIPS Agreement. (Article 12)

Cooperation - - Parties shall

endeavour to cooperate on the subject matter covered by this chapter, such as training and exchanging information. (Article 18.13. Parties shall endeavour to cooperate among their respective patent offices to facilitate the sharing and use of search and examination work of other parties (Cooperation in area of Patent). - Parties agree to co-operate with a view to support the implementation of the commitments and obligations undertaken under this chapter. (Article 30)

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13 (Article 18.14) Enforcement Dispute submitted under the TRIPS agreement can be brought to the WTO dispute settlement body. (Article 64) - Dispute under this Article can be subjected to the dispute settlement, unless stated otherwise. For example, Article 18.83 stated that Vietnam’s implementation of Article 18.50 (Protection of Undisclosed Test or Other Data) and Article 18.51 (Biologics) three years after the conclusion of the extension period referred to in paragraph (A) shall not be subject to dispute settlement under Chapter 28 (Dispute Settlement). No dispute settlement provision, but has cooperation provision with a view to supporting the implementation of the commitments and obligations undertaken under this Chapter. (Article 11.52) -

It is to be noted that both the EU and the US’s PTAs have expanded their level of IP protection. This is because the domestic IP protection regimes in the US and the EU follow very high standards compared to their trading partners (i.e., developing countries). Pugatch (2007)29 calls the IP protection approach in the US PTAs the “nanny” or “to-do-list” approach because it identifies specific IP amendments that the US’s trading partners have to implement. On the other hand, he calls the EU IP protection approach the “generalist” approach, wherein the IP protection is applied in more general and in less-issue specific ways than the US. However, since 2006, the European Commission adopted a new strategy called “global Europe” for enforcement of the IP protection through the EU’s bilateral trade

29

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agreement with other countries in order to foster the EU’s competiveness30. Hence, the new era of IP protection under the EU PTAs follows a similar approach as the US.

Competition Policy (CP)

Developed countries tend to include competition policy in their new PTAs because a lack of anti-competition rules in developing countries can cause trade barriers and limitation of market access31. The application of completion policy in the PTAs seems to reduce barriers to trade, investment and services. Scholars also find that if there is cooperation between states in the form of an international agreement, it is easier to deal with competitive practices32. For example, successful cartel enforcement in one country will stimulate effort in another country, especially when there is cooperation enforcement authorization. Apart from that, the parties of the agreement can share information to cope with investigation and prosecution in their own territories33. This thesis includes state trading enterprises (STEs) and consumer protection because some PTAs include them in the competition policy chapter.

The competition policy can also be either be part of the WTO Plus or WTO Extra. Under the WTO agreements, Article XXIX of GATT states the obligation of WTO members to observe Chapter V of the Havana Charter which deals with restrictive business practices34. Moreover, Article XVII of GATT requires WTO members to guarantee that their STEs will behave in a non-discriminatory manner and act in accordance with commercial consideration35. However, there are some obligations that fall outside the WTO agreements: the WTO Extra provisions of competition policy mostly require harmonization of competition laws, maintenance or establishment of independent competition authority and maintenance of measures to deal with anticompetitive business conduct36. The general scope of the competition policy in the PTAs can be divided into procedural and substantive commitment. Procedural commitment requires a cooperation between the parties through means such as

30

Anke Moreland, ‘Do Developing Countries Have a Say? Bilateral or Regional Intellectual Property Negotiations with the EU’ [2017] IIC 760.

31

Enrique Valerdi Rodriguez (n 13) 6.

32

Ibid.

33

Julian L. Clarke and Simon J. Evenett, The Singapore issues and the world trading system: the Road to Cancun and Beyond (Bern : Seco, 2003) 117-118.

34

Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10), 1616.

35

Ibid.

36

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notification, consultation, exchange of information, and/or coordination of enforcement37. Substantive commitments can be further distinguished into two obligations: first, transparency, which requires parties of the PTA to publish domestic regulations promoting fair competition and naming anti-competitive practices38. The second commitment is non-discrimination.

The following table extends a comparison of competition provisions in the WTO Agreements, the US regime, and the EU regime.

Table 3: Differences between competition policy (CP) regimes under selected US and EU PTAs

The WTO Agreement

The US’s CP regime The EU’s CP Regime US-Singapore FTA TPP EU-Singapore FTA EU-Vietnam FTA Scope WTO members have obligations to observe Chapter V of the Havana Charter. (Article XXIX of GATT) Anticompetitive business conduct Designated Monopoly and Government Enterprise Anticompetitive business conduct Consumer Protection Antitrust and Mergers Public Undertakings, Undertakings Entrusted with Special or Exclusive Rights, and State Monopolies Subsidies Anticompetitive conduct Subsidies Substantive Provisions - Parties shall maintain measures to forbid anticompetitive business conduct. (Article 12.2) Parties shall ensure that government Parties shall adopt or maintain national competition laws and make an effort to apply its national competition laws to all commercial Parties shall maintain their respective territories’ competition policy legislation and apply it in a transparent and non-discriminatory manner. Moreover, Parties shall adopt or maintain comprehensive competition legislation that proscribes anticompetitive conduct. (Article 2) According to 37

Jacques Bourgeois, Kamala Dawar, and Simon J. Evenett,’ A Comparative Analysis of Selected Provisions of Free Trade Agreements’, European Commission DG Trade, 2007.

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16 enterprises and their designated monopolies act in a manner consistent with parties’ obligations under this Agreement. (Article 12.3) Parties recognize the value of transparency of their competition policies by providing information available when the other parties request such information. (Article 12.5) activities in its territory. (Article 16.1) Parties shall adopt or maintain consumer protection laws or other laws or regulations that proscribe fraudulent and deceptive commercial activities. (Article 16.6) parties shall maintain their authorities to deal with legislation. (Article 12.1) Parties shall adjust state monopolies of a commercial character to ensure that no discrimination is exercised by such monopolies. (Article 12.4) Parties shall ensure transparency in the area of subsidies related to trade in goods and the supply of services. (Article 12.9) subsidies, parties cannot grant subsidy to enterprises providing goods or services when they negatively affect, or are likely to affect, competition and trade. (Article x.1) Parties affirm their rights and obligations under Article 3 of the SCM Agreement39. Parties shall ensure transparency in the area of specific subsidies. (Article x.4) Procedural Provisions - Parties shall establish or maintain an authority responsible for enforcement of its measures to proscribe anticompetitive business conduct. (Article 12.2) Parties shall adopt procedural fairness enforcement in their competition law. (Article 16.2) Parties have to make their competition enforcement policies as transparent as possible, such as by regularly updating information. - According to anticompetitive conduct, parties shall maintain authorities responsible for, appropriately equipped for, and with the powers necessary for the full application and effective enforcement of their competition law. (Article 3) Parties can 39

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(Article 16.7) grant subsidies only in keeping with this Agreement and under Article VI of GATT 1994, the SCM Agreement, and the WTO Agreement on Agriculture. (Articles x.1 and x.3) cooperation - Parties recognize the importance of cooperation to further effective competition law and policy development. (Article 12.4) Parties shall cooperate in the area of competition policies. (Articles 16.4 and 16.5) Parties shall endeavour to coordinate and cooperate in the enforcement of their respective laws to fulfil the objective of this Agreement. (Article 12.11)

A party may ask for consultation with another party, but no legal enforcement for the consultation. (Article 12.13) Parties acknowledge that it is in their common interest to strengthen cooperation with regard to competition policy development. (Article xx.3)

Enforcement - Parties cannot

bring a dispute under this Agreement for any matter arising under Article 12.2 (Anticompetitive business conduct), 12.4 (Corporation), or 12.6 (transparency) to dispute settlement process. (Article Parties cannot bring dispute under this chapter to dispute settlement process. (Article 16.9)

A party may ask for consultation in order to foster understanding between the parties, or to address specific Parties cannot bring any dispute under this chapter, except for prohibited subsidies to dispute the settlement process. (Article 12.14) Parties cannot bring dispute under this chapter to dispute. (Articles 4 and x.7) However, if a party considers that a disputable specific subsidy granted by the other party, the party can request

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12.7) matters that arise under this chapter, but no legal enforcement. (Article 16.9) consultations on the matter. The result of consultation is elimination or minimization of the negative effects on the requesting party’s trade and investment interests caused by the subsidy in question. (Article x.5)

Conclusively, it can be seen that each PTA has a different perspective on conduct of competition. However, the substantive provisions under selected PTAs of the EU and the US seem to be similar: they state that the parties have to provide anticompetitive regulation, which includes non-discrimination and transparency. According to enforcement, this chapter is not subject to dispute settlement mechanism in the agreement. However, it is worthy of notice that the dispute settlement clause in the FTA between the US and Singapore uses different wording from the other selected FTAs (which state that “No Party shall have recourse to dispute settlement for any matter arising in under this Chapter”). The FTA between US and Singapore states that

“A Party shall not have recourse to dispute settlement under this Agreement for any matter arising under Article 12.2, 12.4, or 12.6.”

Thus, it can be interpreted that other articles, except Article 12.2, 12.4, or 12.6, are subject to dispute settlement under this agreement. Apart from that, the area of Consumer Protection is stated only in TPP: it requires parties to harmonize consumer protection laws and exchange of information and train experts40.

A comparison of the STEs provisions in the WTO Agreements, the US regime, and the EU regime is shown in the table below.

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Table 4: Differences between State Trading Enterprises (STEs) regimes under selected US and EU PTAs

The US’s STEs regime The EU’s STEs Regime US-Singapore

FTA

TPP EU-Singapore

FTA

EU-Vietnam FTA

Scope STE means a “State enterprise” or “any

enterprise” that has been granted “formally or in effect, exclusive or special privileges”41. No specific STEs chapter, but it is included in the competition policy. The scope of STE is stated in Article 12.8. This chapter applies with the act of STE, whose scope is stated in Articles 17.1 and 17.2. No specific STEs chapter, but it is included in the competition policy chapter. There is a specific chapter regarding STEs. Articles 1 and 2 state the scope of STE. Substantive Provisions STEs have to act in a manner consistent with the general principles of non-discriminatory treatment. (Article XVII of GATT) Each WTO member shall ensure that any monopoly supplier of a service in its territory does not act inconsistently with the Most- Favoured-Nation Treatment. (Article VIII of Each party shall ensure that any government enterprise that it establishes or maintains acts in a manner that is not inconsistent with the party’s obligations under this agreement. The US ensures that any government enterprise that it establishes or maintains accords with non-discriminatory

Each party shall ensure that each of its state-owned enterprises acts in accordance with commercial considerations. (Article 17.4)

Each party shall ensure it does not have adverse effects on the interests of another party through the use of

non-commercial assistance. Moreover, its STEs also do not cause adverse effects to the interests of another party.

Parties have to ensure that there is no discrimination is exercised by state monopolies (Article 12.4) Parties affirm their rights and obligations under Article XVII of GATT and Article VIII of GATs. (Article 2)

(Non-Discrimination) Parties shall ensure that they accord

treatment no less favourable to enterprises of the other party than they accord to enterprises of the party. (Article 4) (Transparency) A party which has reasonable 41

UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XVII OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art17_e.pdf accessed on 24 April 2018.

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20 GATs) treatment. Singapore ensures that any government enterprise provides non-discriminatory treatment. (Article 12.3) (Article 17.6)

Each party shall provide to the other Parties or otherwise make publicly available on an official website a list of its state-owned enterprises and if other party arks for information. On the written request of another party, a party shall promptly provide the following information concerning a state-owned enterprise or a government monopoly. (Article 17.10) reason to believe that its interests are being adversely affected by the commercial activities of an enterprise of the other party may request in written from that party to supply information about the operations of that enterprise, but this does not require a party to disclose confidential information. (Article 6) Procedural Provisions

- - Each party shall provide its courts with jurisdiction over civil claims against and ensure that any administrative body that the party establishes or maintains and which regulates a state-owned enterprise exercises its regulatory discretion in an impartial manner. (Article 17.5) - -

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Cooperation - - Parties when

appropriate and subject to available resources, may engage in mutually agreed technical cooperation activities such as exchanging information (Article 17.11) Parties shall engage in mutually agreed technical cooperation activities in order to promoting efficiency and transparency of state-owned enterprises (Article 7). Enforcement - Article 12.7 may interpret that parties can bring dispute arising under Article 12.3 (government enterprises and designated monopolies) to dispute the settlement process. There is no dispute settlement article in the main text, but Annex 17-B states that “If a panel has been established pursuant to Chapter 28 (Dispute Settlement) to examine a complaint arising under Article 17.4 (Non-discriminatory Treatment and Commercial Considerations) or Article 17.6 (Non-commercial Assistance), the disputing Parties may exchange written questions and responses…”. This can be interpreted as the chapter under TPP being subject to dispute

A party can ask for consultation with another party in order to foster mutual understanding between the parties or to address specific matters that arise under state monopolies, but the result of consultation is not legally binding. (Article 12.13) -

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settlement mechanism.

It is evident from the table that both the US and the EU have similar regimes that lack an enforcement obligation. Moreover, they are applied on the basis of non-discrimination and transparency. However, under the TPP agreement, there seems to be extra obligation for the parties. The STEs of the party cannot cause adverse effect and injuries to other STEs. It needs to be noted, nevertheless, that in the TPP agreement, there are exceptions for such obligations, which will be discussed in the following section.

Environment

The Environmental chapter in the deep agreements is a WTO Extra provision. The OECD secretariat provides three reasons why PTAs should include the environmental chapter: it will promote sustainable development and result in a high level of protection. Secondly, it will improve environmental cooperation among parties. Finally, it helps parties pursue the agenda in international environmental agreements of which the parties of the PTA are members42. Each agreement contains differential text and content. In general, the environmental chapter under the PTAs requires the development of environmental standards, enforcement of environmental laws and publication of such laws, and establishment of sanctions for violation of environmental laws43.

Table 5: Differences between Environmental regimes under selected US and EU PTAs

The US’s environmental regime The EU’s environmental Regime

US-Singapore FTA TPP EU-Singapore

FTA EU-Vietnam FTA Scope No specific agreement dealing with the environment under WTO rules. Specific environment chapter Specific environment chapter No specific environment chapter, but the environmental protection issue is included in trade and No specific environment chapter, but the environmental protection issue is included in trade and 42

OECD, Regional Trade Agreements and Environment (Com 47, 2007) 25-26.

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23 sustainable development chapter. (Section C) sustainable development chapter. Substantive provisions - Parties can establish their own level of protection, but need to ensure that their laws provide for high levels of environmental protection. (Article 18.1) Parties affirm their commitment to implement multilateral environmental agreements to which they are party. (Article 20.4)

Parties shall take measures to protect the ozone layers by implementing the Montreal Protocol or any subsequent measure that provides an equivalent or higher level of environmental protection. (Article 20.5)

Parties shall take measures to prevent pollution of the marine environment from ships by implementing International Convention for the Prevention of Pollution from Ships (MARPOL). (Article 20.6)

Parties shall seek to operate a fisheries Parties can establish their own levels of environmental and protection. (Article 13.2) Parties reaffirm their commitment to reaching the ultimate objective of the UNFCCC46. (Article 13.6) Parties need to promote the effective use of the Convention on International Trade in the CITES with regard to timber species. (Article 13.7) Parties shall introduce and implement effective measures to combat illegal, unreported and unregulated (hereinafter referred to as “IUU”) fishing. (Article 13.8)

Parties have the right to

implement their own

environmental law, but they need to ensure that their laws and policies provide for and encourage high levels of domestic protection in the environmental areas. (Article 2) Parties reaffirm their commitment to reaching the ultimate objective of the UNFCCC to protect climate change. (Article 5) Parties shall adopt and implement appropriate effective measures consistent with its commitments under the CBD47 and the CITES. (Article 6) Parties shall 46

The UN Framework Convention on Climate Change.

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management systembased on the best scientific evidence available and on internationally recognized best practices for fisheries management such as UNICLOS44, the 2001 IUU Fishing Plan of Action. Parties shall adopt, maintain and implement laws, regulations, and any other measures to fulfil their obligations under CITES45. adopt measures consistent with domestic laws and international treaties to which of which it is a part, such as FLEGT48, to promote the conservation of forest resources and combat illegal logging and related trade. (Article 7) Parties shall comply with long-term conservation and management measures and sustainable exploitation of marine living resources as defined in UNICLOS and the IUUFishing Plan of Action. (Article 8) Procedural provisions - Parties have to ensure that judicial, quasi-judicial or administrative proceedings are available under their environmental law. (Article 18.3) Parties shall ensure that judicial, quasi-judicial or administrative proceedings for the enforcement of their environmental laws are available under their law and that those

- -

44

The United Nations Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of December 1982.

45

The Convention on International Trade in Endangered Species of Wild Fauna and Flora

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proceedings are fair, equitable and transparent, and comply with due process of law. (Article 20.6)

Corporation - Parties may share information and experiences in assessing and taking into account positive or negative environmental effects of trade agreements and policies. (Article 18.6) Parties shall cooperate among the participating parties related to the implementation of this chapter. (Article 20.12) Parties shall work together on trade-related aspects of environmental policies in order to achieve the objectives of this agreement. (Article 13.10) Parties shall exchange information and experience with regard to implementing this chapter. (Article 14)

Enforcement - Consultation and joint committee when the consultation fails. (Article 18.7)

If the party fails to resolve the matter under consultation measures in this chapter, the party can bring the dispute to the Dispute Settlement Body under the TPP agreement. (Article 20.23) Dispute Settlement does not apply to this chapter. (Article 13.16)

Dispute

Settlement does not apply to this chapter. (Article 16)

Thus, the US’s regime requires both substantive and procedural obligations. The procedural obligation can be divided into two models. The first is the Clinton model, which places environmental judicial settlement on a par with other trade commitments. The other model is the Bush model, which contains ‘good-governance’ provisions that create separate dispute mechanisms to increase the transparency of the provision.49 However, it is noteworthy that the TPP agreement requires a high standard of environmental protection by referring to other environmental conventions that the TPP’s parties have to implement in their environmental law. If the parties cannot comply with such obligations, other parties can bring the non-compliance issue to the Dispute Settlement Body under the TPP agreement. On the contrary,

49

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the EU’s regime is only seeking an affirmation of environmental protection. The parties have to commit to protect the environmental provision by enforcing their own domestic environmental laws. It should also be noted that under the EU regime, there is no dispute settlement clause. Thus, it seems less legally enforceable than the US regime.

Section Conclusion

As can be seen from Tables 2 to 5, obligations under the selected PTAs of the EU and the US are very comprehensive and have higher standards than those under the WTO agreements. Even though each PTA has a different form and language depending on negotiation, it is noteworthy that the high standard of obligations is exported from the US and the EU’s regulatory frameworks to their trade partners. It can be seen that the newer PTAs, such as the TPP and the FTA between EU and Vietnam, have stricter obligations than the older. Even when the same developing country negotiates PTAs with different developed countries, the results of negotiations are unlikely to be the same. The US regime in intellectual property protection has stricter obligations than the EU because it forces its trade partners to ratify or accede to international agreements that sometimes its trade partners are not parties. Moreover, even though it is not stated directly in the text, the parties can bring the dispute under the IP chapter to dispute settlement in the agreement. Contrary to the EU regime, it cannot be enforced in the IP chapter and it provides a higher standard than TRIPS in some areas, such as extending the term of protection and scope of IPRs. Apart from that, it requires parties to comply with international agreements that they have already been part of.

Concerning the competition policy and state trading enterprise chapters, most selected PTAs require their parties to have law and policy on this area and treat other parties without discrimination. However, the TPP agreement has another obligation which prohibits a party from causing adverse effects or injury to another party or its STEs. Apart from that, a party can bring a dispute under specific issue under the TPP agreement to dispute settlement, while other PTAs state that this chapter cannot be subject to dispute settlement.

With regard to the environment issue, the US PTAs separate this issue into one chapter, but in the EU’s PTAs, it is included in the trade and sustainable development chapter. All of them refer to existing international agreements which require parties to comply with such agreements. Only disputes in the environmental chapter under the TPP agreement can be submitted to dispute settlement under the TPP agreements. As a result, the TPP agreement is very comprehensive. All selected chapters under the TPP agreement have an enforcement

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procedure in addition to a very high standard of obligations. This will make them legally enforceable, and the trade partners of the US should bear this in mind when negotiating PTAs with the US.

Impact of the WTO Plus and Extra on developing countries

In order to determine the impact of the WTO Plus and Extra on developing countries, it is important to not only consider the obligation that such an agreement contains, but also the enforcement of the obligation. If the obligation is not enforceable, it does not seem to be legally binding with the parties. On the contrary, if it can be successfully invoked in the dispute settlement proceedings, it could have an impact50. In order to interpret the obligations under the selected PTAs, this thesis uses the rule of interpretation under Section 3 (Articles 31-33) of the Vienna Convention on the Law of Treaties (VCLT). Moreover, McCaffrey (2006) indicates that “…the intent to create a legal relationship is distinct from the intent to create a moral obligation or political commitment. This is exemplified by words of obligations, most commonly “shall”, but also “agree”, “undertake”, and the like. Obviously, references to “rights” and “obligation” are also indicators of intent to create a legal relationship. Terminology such as “should” and “will” do not typically indicated such intent…”51.

Intellectual Property Rights (IPRs)

As per Table 2, the TRIP plus obligations in the selected PTAs expand the scope of the protection on patents and other issues such as trade secrets, e-commerce, internet service provides liability, data protection, and plant variety. Concerning patent protection, this issue seems to be the most difficult for developing countries to negotiate in the PTAs due to its relation with the access to essential medication. All selected PTAs seem to increase the level of protection in pharmaceutical patents through patent provision in the PTAs. Moreover, they require more protectable subject matter with border extensive coverage, weakening the flexibilities of the TRIPS agreement52.

All selected PTAs request parties to protect the data of the patent through “data exclusivity”. Data exclusivity means protecting the confidentiality of data used to support a patent application. However, the term and scope of protection are different in each PTA. The TPP

50

Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10), 1580.

51

Stephen C. McCaffrey, Understanding International Law (2nd edn, LexisNexis 2015).

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agreement protects data exclusivity in pharmaceutical products (for 5 years; Article 18.50), biological products (for 8 years; Article 18.52), and agriculture chemical products (for 10 years; Article 18.47). The US-Singapore FTA requires protection of data for least five years from the date of approval for a pharmaceutical product and ten years from the date of approval for an agricultural chemical product (Article 16.7). The EU-Singapore FTA allows data to be protected at least five years for a pharmaceutical product and ten years for an agricultural chemical product (Articles 11.33 and 11.34). The EU-Vietnam FTA provides at least a five-year data protection for pharmaceutical or agrochemical product (Article 9). Data exclusivity means that patent holders will receive data protection apart from the patent protection of their invention, and even upon the expiration of a patent term, the data might still be protected (Article 18.54 of the TPP agreement). Data exclusivity certainly affects developing countries, most of which do not usually provide data protection in their national law. A generic manufacturer will be impacted by this provision because it does not depend on clinical trials and other data submitted by the original applicant before marketing a drug. As a result, the former will have to conduct the clinical trial independently, thus using up a significant amount of resources53. Moreover, conducting tests and generating clinical trials are extremely expensive54. As a result, this will have a detrimental effect on the citizens of developing countries due to the generic manufacturing required to sell a drug at high prices. Furthermore, Lester, Mercurio and Bartels55 claim that data exclusivity is also a de facto patent ensuring minimum period of monopoly for pharmaceutical companies, because a country cannot take advantage of compulsory licensing (CL) in the presence of data exclusivity protection. This is because a generic manufacturer granted authority to produce a CL drug cannot rely on existing data to obtain regulatory approval56. Apart from that, all selected PTAs mandate parties to compensate the unreasonable delay of the patent process by granting a longer period of protection, apart from extending the term of patent protection in the TRIPS agreement. As a result, patent holders will have a longer monopoly over their invention and data. The problem that may occur is considered ‘unreasonable’. The PTAs do not define this word and it may be troublesome when put into practice57.

53

Ibid, 226.

54

One clinical trial costs about one million dollars. See also Robert Weissman, ‘Dying for drugs: how CAFTA will undermine access to essential medicines’ [2004] Multinational Monitor 13.

55

Simon Lester, Bryan Mercurio and Lorand Bartels, Bilateral and Regional Trade Agreements: Commentary and Analysis (2nd edn, Cambridge University Press 2016) 352.

56

Bryan C. Mercurio (n 43) 228.

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Apart from the extension of patent protection, the new PTAs seem to make the process of patent registration much easier. The TPP agreement is a good example. According to the scope of the patentable, Article 18.37 allows new or used applications of an existing product (new indication, new formulation, new method) to be registered as a patent. For example, even if a US company has already been granted the patent for a skin treatment cream, when the cream is repurposed for a new treatment, the parties to the TPP agreement have to grant a patent to the new treatment. Moreover, it requires parties to accede to multilateral IP protection such as The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (called the Budapest Treaty for short), which permits patentability to microorganisms. The extension of patentable scope seems to affect developing countries in that their domestic law and regulations do not allow for the registration of such an invention. Under the TRIPS Agreement, Article 27.1, “Patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.”

Moreover, Article 27.3 allows parties to the TRIPS agreement to be excluded from patentability for “(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.” This means that parties to the TRIPS agreement may exclude Article 27.3 (a) and (b) from patentability, but the TPP agreement seems to extend the scope of patentability. As a result, developing countries may have to amend their law to extend the scope of the patentable.

Furthermore, all selected agreements require parties to accede to the International Union for the Protection of New Varieties of Plants (UPOV) 1991 in order to protect plant variety. The UPOV Agreement provides a period of protection for new plant breeds and creates rights for the breeder over the re-use and sale of seeds. These provisions in the UPOV are controversial in developing countries that are agricultural producers because they are afraid that the farmer that used protected seed may have increased revenue than seed owners. New plant breeders have a monopoly in the market. Most farmers in developing countries have a low income and

Impact of WTO “Plus” and “Extra” Issues on Developing Countries

-Cover-