Intellectual Property Rights in the Free Trade Area of the Americas Discussions

Steve Suppan, Ph.D.
Director of Research
Institute for Agriculture and Trade Policy

The following review of discussions about intellectual property protection at the Free Trade Area of the Americas (FTAA) is intended to stimulate thinking about these discussions might affect their work in food security and the conservation of biodiversity. The review may also prompt NGOs to discuss how and to what end NGOs might intervene in FTAA discussions. At present, only for-profit entities, through the Business Forum of the Americas, have the privilege of meeting with and making formal recommendations to the FTAA Working Groups of government officials. Hopefully, the consequences of excluding civil society from trade policy formulation discussions and negotiations will lead governments in the near future to provide NGOs the formal and informal venues for recommending trade policy now only accorded to representatives of for profit entities.

In February 1997, the United States presented a proposal for a FTAA Work Group on Intellectual Property Rights (IPRs) that would "go beyond" the commitments of the Trade Related Intellectual Property Rights Agreement (TRIPs) of the World Trade Organization. The proposal contends that new and more stringent protection of intellectual property privileges are needed for IPR-dependent industries, such as pharmaceuticals, computers, film and sound recordings and biotechnology, in which the U.S. is dominant. The U.S. would like to begin negotiating a FTAA chapter on intellectual property privilege protections by April, 1998, a target that many Latin American nations have thus far resisted. If U.S. negotiators repeat past tactics, the negotiations towards a "WTO-plus" form of intellectual property privilege protection will likely be cited as a precedent for more stringent protectionism at the meetings to amend TRIPs in 1999 and 2000.

The U.S. "Suggested 1997 Action Plan" recommends that the "private sector, which already has extensive experience in the [IPR] enforcement area, could play a particularly significant role in advising the Working Group" on how to write policies that would deter piracy and counterfeiting. The U.S. suggests that would- be FTAA members could mount "public campaigns describing the economic, social and legal costs of piracy and counterfeiting."

Under the recommended goal to "reduce barriers for obtaining intellectual property rights in the Hemisphere," the U.S. suggests that prospective FTAA members ratify the Trademark Treaty Law, and that a FTAA IPR Working Group "identify and implement ways in which unnecessary duplication in patent examination systems in the region could be implemented through, for example, data sharing (in areas like biotechnology), exchanging data bases and confirmation of patents." Under such a "simplified" and "modernized" system of patent examination, patents approved in the U.S., for example in agro-biotechnology, would be more readily granted and recognized as valid in other FTAA countries.

The U.S. paper also recommends that the governments represented in the Working Group also "reaffirm their commitment to full implementation of WTO's TRIPs Agreement" and "consideradopting standards of treaties such as the Budapest Treay on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure, the Patent Cooperation Treaty and the Trademark Law Treaty." The paper's authors contend that "full implementation of these agreements and treaties will further enhance the ability of FTAA countries to attract investments in high-wage and advanced technology industries and jobs." (However, it is doubtful whether substantial profits from these investments will remain in the signatory countries or whether any of the high-wages jobs will go to nationals, if they also sign on to the Multilateral Agreement on Investment, as advocated by the United States.)

Finally, the paper's comment the "Role of the Private Sector" states the U.S. government's position on the public's role in Working Group consultations: "Recognizing that intellectual property rights are private rights, it is imperative that any government group on intellectual property establish and maintain close ties to the private sector. . . . An awareness of the private sector's interests, concerns and goals is key to achieving a FTAA that protects IPR now and in the future." The paper offers the U.S. government's consultation process with the private sector as an exemplar.

To judge by the minutes of the July 10-11 FTAA meeting on Intellectual Property, held at the Organization of American States in Washington, DC, most of the U.S. suggestions for the Working Group have been incorporated, including the April 1998 start date for the formal beginning of negotiations. For example, the minutes state that "with respect to the fifth point of the agenda "Analysis of the implications of emerging technologies with respect to the protection of intellectual property rights," the Working Group held a seminar/workshop the day prior to the meeting, which allowed for an exchange of views and information on these issues among countries. Costa Rica, Mercosur, Mexico and the United States made contributions on biotechnology, and Columbia and the United States on the implications of new technologies on copy rights." Thus far, it has not been possible to obtain copies of the papers presented at the Working Meeting.

At the October 2-5 meeting of the Working Group in Cartagena, Columbia, four approaches were debated without resolution for negotiating intellectual property privileges protection under FTAA. The first approach, supported by the Andean Community, Costa Rica, Guatemala, Honduras, Jamaica, the Dominican Republic, and Mercosur (for the most part), calls for "gradual" negotiations, consisting of implementing business facilitation measures before proceeding to the negotiating of the IPR chapter itself. Mexico also presented a proposal for "gradual" negotiations, in which business facilitation measures would be negotiated concurrently with the IPR chapter. Both gradual approaches call for studies prior to negotiations on the impact of IPR regimes on the Gross Domestic Product, and IPR technical assistance programs and a longer phase-in period for smaller economies.

Mercosur alone put forward a third approach, which in addition to steps towards gradual negotiations, requires that FTAA prospective members must reach consensus on which international IPR agreements are to be referenced as the basis for an FTAA IPR chapter. Mercosur does not want to negotiate enforcement and dispute resolution as part of the IPR chapter, in opposition to other governments represented in the Working Group.

The U.S. approach reiterates the tenets of its February "Suggested Plan of Action," and calls for "immediate negotiations on all substantive and enforcement obligations" and simultaneous implementation of business facilitation measures. The U.S. proposal also calls for technical assistance to smaller economies to help them carry out their obligations under an IPR chapter Impact studies, training of bureaucrats in intellectual property protection enforcement and the formation of IPR institutions would all be done simultaneously with the negotiation of an FTAA IPR chapter. The United States traditionally favors a "simultaneous" approach to negotiating all issues, since it has the most financial and bureaucratic resources to produce an agreement in its interests. The senior officials on intellectual property protection issues will meet again at the end of October to come to some agreement about how to launch the IPR negotiations in April 1998 at the Summit of the Americas in Santiago, Chile.

Meanwhile, as the U.S. is working to make its IPR agenda that of the FTAA, it has not neglected trying to impose parts of that agenda through bilateral negotiations. On September 20, 1996, Ambassador Myles Frechette that Colombia would have to negotiate bilateral agreements in intellectual property protection and in investment, as prerequisites for Colombia or other nations to join the FTAA. He said that Colombia would have to agree to "pipeline" protections for pharmaceutical products, heightened protection for computer software, enhanced IPR enforcement mechanisms, and new laws on trademark and textile design protection. Ambassador Frechette said that the Colombia constitution would have to be amended to require compensation for expropriation of private property taken in the public interest. In June 1997, the United States told Colombia that it would have to implement the TRIPs Agreement fully by June 1998, in advance of TRIPs obligations for developing countries, in order to negotiate a bilateral investment agreement with the United States.

Throughout 1997, the U.S. threatened to use Section 301 trade sanctions in September against Ecuador, if its Congress did not ratify a bilateral IPR agreement signed by Ecuador and the United States in 1993. The Congress has been pressured not to ratify by indigenous groups, particularly COICA, a group with membership in nine countries in the Amazon Basin. Instead, the Congress passed a biodiversity conservation and protection law in response to charges that corporate bio-piracy was stripping Ecuador of its genetic resources, and that ratifying the bi-lateral agreement would legitimize bio-piracy.

These are but two examples of recent U.S. bilateral diplomatic initiatives to create legal precedents for the IPR rules it would like to see codified in an FTAA IPR chapter. It is by no means certain that the U.S. agenda for IPRs will prevail. However, the current agenda setting success of the U.S. in FTAA IPR negotiations, together with the pressure it exercises through bilateral negotiations and sanctions, pose a great challenge to those who would grant intellectual property privilege protections only in exchange for demonstrated performance in achieving social development and environmental objectives, such as those outlined in Agenda 21. Given the unwillingness or inability of many industrialized countries, including the United States, to carry out their Agenda 21 commitments, it seems likely that it will be a while before there will be a reciprocity between the granting of intellectual property privileges by the state in the name of its citizens and the fulfillment of socio-economic and environmental obligations for those privileges.