DEVELOPING COUNTRIES NEED TO TRADE OFF COSTS AND BENEFITS IN IMPLEMENTING TRIPS AGREEMENT
Press Release
TAD/1840
DEVELOPING COUNTRIES NEED TO TRADE OFF COSTS AND BENEFITS IN IMPLEMENTING TRIPS AGREEMENT
19970306 GENEVA, 4 March (UNCTAD) -- The Trade Related Intellectual Property Rights (TRIPS) Agreement, signed on 15 April 1994 in the framework of the Uruguay Round negotiations, represents a signal change in international standards for protecting intellectual property required by many developing countries, the United Nations Conference on Trade and Development (UNCTAD) says in a report released today. Its implementation is likely to engineer fundamental changes in industrial structure, market competition and growth in many countries, it adds.The UNCTAD argues, however, that the Agreement entails both costs and benefits. In accommodating their economic development goals to the TRIPS requirements, developing countries and economies in transition would do well to safeguard a balance between incentives to innovate and the need for adequate diffusion of technological knowledge into their economies.
The 76-page report, entitled "The TRIPS Agreement and the Developing Countries", was originally commissioned by the World Intellectual Property Organization (WIPO), which invited UNCTAD to study the financial and other implications of the TRIPS Agreement for developing countries. At the ninth session of the Conference (UNCTAD IX, Midrand, South Africa, May 1996) member States asked the secretariat "to assist developing countries in collaboration with WIPO and the World Trade Organization (WTO) to identify opportunities provided by the TRIPS Agreement, including for attracting investment and new technologies".
The Agreement covers a breadth of disciplines on intellectual property rights (IPRs) that is unprecedented at the international level. For example, they include patents, copyrights, trademarks, industrial designs, sui generis protection for integrated circuits and plant varieties, and trade secrets. Each of these disciplines is analysed from a development perspective in the report.
Three key points arise from UNCTAD's assessment of the long-term costs and benefits stemming from TRIPS. First, the Agreement requires substantially strengthened protection and enforcement of intellectual property rights in many countries. Strengthening of IPR regimes is expected to have a positive impact in developing countries. More local innovation, additional inward foreign direct investment and higher technology transfers are among likely benefits. On the other hand, it could also lead to higher prices for
- 2 - Press Release TAD/1840 6 March 1997
protected technologies and products and restricted ability for developing countries to increase sales through product imitation or copying.
The UNCTAD's second major conclusion is that, in implementing the TRIPS Agreement, developing nations should try to strike a balance between the needs of innovative firms and their licensees for protection from easy appropriation of their intellectual property, on the one hand, and the needs of follow-on competitors and consumers. Countries are more likely to benefit from additional technology transfer under TRIPS if they link strengthened IPRs with technology development.
Thirdly, the study argues, the impact of the various disciplines of IPRs covered in the TRIPS Agreement will differ significantly among countries. They will vary according to countries' existing IPRs systems, the level of their economic and technological development, and the mode of implementation. The report explains that beneficial impacts are most likely in those newly industrializing economies that have developed strong industrial and technological bases increasingly applied to technical innovation. However, in those nations in which technological development is rudimentary and to which technology transfer and diffusion is limited, with little in the way of offsetting local innovation, there could be a net financial cost.
One immediate challenge is to bring national laws, institutions and procedures in line with the provisions of the TRIPS Agreement. The implementation of the Agreement requires significant improvements, adaptation and enlargement of legal, administrative and particularly enforcement frameworks, as well as human resource development. This task may impose only a few obligations for those developing countries, mainly in Asia and Latin America, which began the process of changing their legal regimes for intellectual property and supporting institutions in the late 1980s and early 1990s, which include Chile, China, Republic of Korea and Thailand.
For the least developed countries in particular, however, the legal and administrative changes required in their TRIPS regimes could entail significant expenditure and have social implications. For instance, the report indicates that in order to comply with the Agreement over the transition period, Bangladesh will need to spend $250,000 in one-time costs for legislative drafting and over $1.1 million in annual costs for judicial work, equipment and enforcement measures over that period. This latter sum does not include the substantial training costs.
The UNCTAD thus calls on industrialized countries and international organizations to provide assistance to developing countries to help them adapt to and implement the TRIPS Agreement.
For more information, contact Assad Omer, International Investment, Transnationals and Technology Branch, Division on Investment, Enterprise Development and Technology, UNCTAD, tel.: 41-22-907-56-96, fax: 41-22-907-01- 94, or e-mail: assad.omer@unctad.org.
* *** *