Originally posted in The Daily Star on 5 July 2021
On June 29, members of the World Trade Organisation (WTO) extended the deadline for Least Developed Countries (LDCs) to protect intellectual property under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) until July 1, 2034. Members agreed to extend the present transition period, which was scheduled to end on July 1, by 13 years. The TRIPS Agreement that facilitates trade in knowledge and creativity, covers areas such as copyright, trademark, geographical indicators, industrial design, patents, layout designs of integrated circuits and undisclosed information. It may also be mentioned that the transition period for pharmaceutical products was earlier extended by the Council for TRIPS until the end of 2032.
On behalf of the LDC Group in the WTO, Chad requested the extension on October 1, 2020. The LDC Group requested an extension of the transition period so that LDCs are exempted from applying TRIPS provisions till an LDC graduates instead of a fixed period which is applicable to all LDCs. Article 66.1 of the TRIPS Agreement provides flexibility to LDCs. These countries have been exempted from applying the provisions of the TRIPS Agreement twice since 2005—the first time from 2005 to 2013 and then from 2013 to 2021. While granting such exemptions, the special requirements of LDCs were taken into consideration. Their economic, financial and administrative constraints and the need to create a technological base have been mentioned by the WTO for such exemptions.
The other request from the LDC Group was exemption of an additional 12-year period after an LDC graduates so that the country can graduate in a smooth manner by overcoming shocks during the new circumstances. However, WTO members did not agree to the LDC request for continuation of the transition period after a country graduates from LDC status to the developing country category.
This is unfortunate since during the initial period after graduation, LDCs face challenges in terms of the loss of several international support measures. These include loss of preferential market access for LDC products in several developed and developing countries, access to concessional finance, TRIPS waiver, LDC-specific funds and technology transfer, among others.
It is widely discussed that though the pandemic has affected all economies, LDCs are more vulnerable to the crisis. These countries are facing health and economic shocks which are reflected through low economic activities, loss of employment and income of people, financial stress, fiscal deficit, and increased poverty. Social challenges such as poor healthcare, learning loss of students, violence against women, burden of unpaid care work, increased child marriage, and greater inequality have also become prominent in these countries during the pandemic. According to the United Nations Conference on Trade and Development (2020), the pandemic could create an additional 32 million extreme poor by 2020 in 47 LDCs. This will increase the number of extreme poor to 377 million people, more than half of the number of poor worldwide. The pandemic is feared to take away some of the achievements in case of the Sustainable Development Goals (SDGs). Under such circumstances, LDCs require even more flexibility than before. A shorter transition period as provided to graduating LDCs in the past is not enough.
LDCs have become more vulnerable in view of the ongoing Covid-19 pandemic. Several studies have apprehended that achievements made by LDCs so far could be reversed due to the impact of the pandemic. This may not be reflected in the average statistical numbers but the inherent strength of their economies will be weaker. Hence, newly graduated LDCs will require a longer time to graduate in a sustainable manner. In such circumstances, LDC-specific support measures need to be continued for a longer period. One of these measures is the continuation of the TRIPS transition period during post-LDC graduation.
Advanced countries are working towards building their economies in a better way than the pre-pandemic period. Not only do they have access to enough vaccines to fight the pandemic, they are also investing heavily in human capital and green technology. LDCs do not have access to affordable knowledge products, healthcare facilities, and green technology. Article 66.2 of the TRIPS Agreement refers to technology transfer to LDCs by developed countries so that a sound and viable technological base is created in LDCs. This is yet to be observed in a significant way. There has been a general lack of interest on the part of the developed countries in transferring technology. Rather, redundant and obsolete technologies are often dumped onto LDCs.
As the advanced countries aspire to “build back better” as part of their recovery plan and remain committed to global goals such as the SDGs, their commitment towards enhanced support to LDCs will be crucial. LDCs are facing uncertainty in getting vaccines while several developed countries have purchased more than their requirements. Therefore, the post-pandemic period will not only exacerbate inequality within countries but also between the rich and poor countries in the world. This requires conscious efforts of the global community.
Bangladesh played an important role in driving the extension of the exemption period for LDCs to implement the obligations of the TRIPS Agreement. Though Bangladesh has fulfilled LDC graduation criteria during the triennial reviews of the United Nations in 2018 and 2021, and is expected to graduate in 2026—it will need the LDC-specific flexibilities for a few years during its post-graduation period. This will help the country to prepare for absorbing the shocks to be felt due to the sudden withdrawal of various international support measures.
At the national level, Bangladesh will have to work towards preparing itself to overcome the challenges following graduation. These include a host of issues, such as diversification of its exports and markets, higher resource mobilisation and its efficient utilisation, increased capacity and productivity, technological adoption, and stronger institutions. As far as TRIPS is concerned, Bangladesh should also develop and strengthen its IP regime with support from the WTO and also by engaging national experts. At the global level, Bangladesh will have to continue its engagement along with the LDC Group for the extension of TRIPS flexibilities both for current and graduating LDCs.
Dr Fahmida Khatun is the Executive Director at the Centre for Policy Dialogue.