Talk on Biodiversity and Intellectual Property Rights under the Free Trade Area of the Americas: U.S. Diplomatic and Biotechnology Industry Strategy and Tactics

Trade and Environment Forum: Peoples’ Summit – Santiago de Chile – April 16, 1998

Steve Suppan, Ph.D. [email protected]
Research Director, Institute for Agriculture and Trade Policy (United States)
phone: 612-870-3413; fax: 612-870-4846

On behalf of the Institute for Agriculture and Trade Policy, I wish to thank the organizers of this Peoples’ Summit for the opportunity of discussing with you whether and how trade policy might help conserve biodiversity and improve the lives of the stewards of biodiversity, particularly those whose resources are being stripped from them. More generally, we are discussing the nexus of trade, environment and development.

It is fitting that we are gathered here to strategize about this topic, for in a 1972 meeting in Santiago of the United Nations Conference on Trade and Development (UNCTAD), a study of the role of the patent system in development was planned. The resulting report, The Role of the Patent System in the Transfer of Technologies, published in 1975 by the United Nations Secretary General, UNCTAD and the World Intellectual Property Organization remains the classic study on the failure of patents to aid development. The study further underlined the failure of industrialized countries to keep the commitments they had made in signing on to UNCTAD’s Code on Technology Transfer and the Organization of Economic Cooperation and Development’s recommendations against abuse of patent law.¹ The proponents of today’s Intellectual Property Rights (IPRs) systems would likely wish to ignore these commitments as non-binding. However, we would lose political advantage against those proponents if we did not honor such path-breaking research by relentlessly recalling in public the failure of IPRs to enable the technology transfer that might aid development. Indeed, the Multilateral Agreement on Investment, and versions of it being promoted by the United States in bilateral negotiations with Latin American governments and in the Free Trade Area of the Americas (FTAA) discussions, would prohibit governments from requiring technology transfer as a condition of investment.² What has been happening in fact would become legitimized by law.

The position of the U.S. government is to negotiate an IPR agreement in the FTAA that would go "beyond" the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) – that is, a so-called TRIPs plus agreement.³ There has been stiff resistance during the FTAA discussions to the U.S. position that IPR obligations should apply to all technologies without exception and not permit the special and differential treatment of developing countries – particularly phase-in periods for assuming obligations – stipulated in the Uruguay Round agreements.⁴ The fourth Ministerial Declaration in San José on March 19th showed no evidence that the differences between the U.S. and other countries concern IPR issues had been resolved. However, U.S. Trade Representative Charlene Barchefsky declared herself very satisfied with the negotiations, noting in a press statement that the U.S had achieved its objectives, including "[c]reating nine working groups for trade negotiations which play to America’s strengths, including agriculture, market access, services, and, importantly, intellectual property rights."⁵ I have written a four-page summary of the development of the U.S. position on IPRs in the FTAA discussions. Copies are available in English and Spanish for those interested. So I won’t comment further on the U.S. position except to welcome and encourage the work of Latin American NGOs in pressuring their governments not to cave in to U.S. IPR demands. Not coincidentally, Ecuador, one of the many countries under permanent threat of U.S. trade sanctions for legislatively resisting U.S. demands,⁶ is the vice chair of the IPR Working Group of FTAA. Venezuela will be the IPR Working Group chair for the first eighteen months of negotiations, scheduled to begin no later than September 1998.⁷

Having recalled a grim tale of trade diplomacy that has failed development, I now have the happier task of outlining some of the strategic options that we NGOs have, working jointly with some governments and even businesses, for frustrating U.S. plans. With hard work and good fortune we may be able to use the trade and environmental policy process to help conserve biodiversity, and improve the lives of its stewards, particularly those whose resources are being taken without their consent and for prices that no asset valuation analysis could justify. Let us further hope that our work can help avoid the sacrifice of human life that may occur as the police enforce IPRs, particularly in rural communities.

One option that has not been explored sufficiently to my knowledge is cooperating with business representatives whose views and business practices suggest how trade policy can be a tool for development in the FTAA process. I noted with pleasure that some delegates at the FTAA Business Forum last month in San José articulated positions that largely coincide with the "No Patents On Life" position held by so many NGOs worldwide. For example, the Centro Industrial de Laboratorios (CILFA) of Argentina and the Federación Latinoamericana de la Industria Farmaceutica (FIFARMA) based in Venezuela presented the following position to the IPR Workshop: "No patenting of existing substances in nature, even though isolated or purified."⁸ Since the Business Forum claims to operate on the basis of full consensus, neither this recommendation, nor 160 of 162 other recommendations received full consent. Nonetheless, I believe it is worth pursuing this process because of the alliances that might be built in the lobbies, the information that might be shared, and even the funding that might be gained. Last month, very few NGO representatives joined me in the IPR Workshop in San José, yet we had sufficient success that the president and vice president of the Workshop, both lawyers for transnational firms, tried to prevent NGOs from speaking in the Business Forum. However, other business representatives from Brazil, Argentina, Costa Rica, the Dominican Republic and other countries supported our continuing participation in the Forum. We should identify sympathetic business representatives, such as those of agricultural cooperatives, sustainable forestry federations and generic pharmaceutical manufacturers, who might likewise support NGO interests in the FTAA and WTO-TRIPs process. Even if NGOs themselves are prevented from speaking or posting papers on the Business Forum Web site, their views can be expressed to a great extent through some business representatives.

A second strategic option is to support the February 11 call of the Consultative Group for International Agricultural Research (CGIAR) for a moratorium on the patenting of all germ plasm held in CGIAR research centers. The call for this ban was prompted by the work of RAFI, the Rural Advancement Foundation International and other NGOs, in documenting cases of bio-piracy by seed companies claiming extremely wide patents on CGIAR germ plasm. Forms of tactical support might include publicizing the CGIAR call for the moratorium, incorporating the moratorium into national legislation governing other publicly held germ plasm collections, documenting further cases of bio-piracy and patent abuse, and submitting friend of the court briefs to disallow patents on bio-pirated genetic resources and knowledge about them.⁹

In explaining the decision to call for the moratorium, CGIAR chair Dr. Ismail Seregeldin said that the broad patent claims filed by corporations were hindering crop improvements, as researchers were forbidden from communicating about their work due to patent related confidentiality claims. "Will we be able to do good science five or ten years from now?" Dr. Seregeldin asked and then answered "I’m not sure."¹⁰ Since corporations such as Cargill and Pioneer have received up to a third of their germplasm from just one CGIAR center,¹¹ there will be great pressure on CGIAR to cave in to pressure to extinguish the moratorium. Yet this pressure may be resisted if NGOs can help raise public and legal awareness about how the broad patent claims and the anti-competitive patent stacking that make the combined genetic trait products of agricultural biotechnology technically feasible and potentially profitable are founded on extremely controversial legal ground. (The anti-competitive nature of present trends in patenting was tacitly confirmed at the San José Business Forum when, to the astonishment of some business representatives, no consensus could be reached on the following recommendation: "Patents should not be used to protect anti-competitive business practices."¹²) Even the legal counsel to the Biotechnology Industry Organization has admitted that there is no legal consensus on what life forms can be patented.¹³ Public debate over the role of patenting in agricultural research during a moratorium may facilitate fortifying barriers of legal opinion and public opposition against trade negotiators who would eliminate the public domain and public purpose of biodiversity use and conservation. CGIAR scientists could be brought to testify to national legislatures and TRIPs and FTAA ministerials about patent abuse and how it has hindered their work and determined the direction of agricultural research. Any retaliation against such testimony could offer opportunity for further public debate, with the consent of scientists, of course.

A third strategic option is to support governments that resist the U.S. government’s demand that developing countries comply with TRIPs in advance of the phase-in periods negotiated during the Uruguay Round.¹⁴ TRIPs Article 1.1 states that World Trade Organization members "are free to determine the appropriate method of implementing the provisions of this agreement within their own legal system." However, such freedom is extremely limited. As you know better than I, Ecuador, Brazil, Argentina, Thailand and other countries have been pressured with threats of trade sanctions and investment blockades to conform their national IPR legislation to the U.S. interpretation of TRIPs in advance of TRIPs requirements and FTAA negotiations. However, in many countries, there is still time to develop sui generis legislation at the national level that can entrench the public domain of genetic resources.

A fourth tactic is to pursue socio-environmental justice through ratification and strengthening of the Convention on Biological Diversity. At the meeting on the Protocol on Biosafety in February in Montreal, the United States delegates, via its spokespersons from the Russian Federation, strongly opposed any language that would create institutional mechanisms to hold parties to the CBD liable for environmental damage caused by transboundary movement of genetically modified organisms. A button worn by NGO representatives and a few governmental delegates to the Protocol negotiations demanded "No Liability, No Protocol." The technical analysis and political organization to win such a demand might be found through NGO dialogue with insurance companies that are reeling from the effects of paying out liability claims due to avoidable environmental catastrophes. Such a dialogue with insurance company representatives could further be pursued through the highly controversial facilities for civil society participation outlined in the San José Ministerial Declaration.

The globalization of insurance services made legally possible in the WTO Agreement on Financial Services, concluded on December 12, 1997, expose insurance companies more, not less, to such liability payouts. In view of this greater liability exposure, fiscally responsible insurance company representatives might welcome invitations to dialogue with NGOs not only in multilateral environmental negotiations, such as the Biosafety Protocol, but also in the preparations for the often delayed United Nations summit on Finance and Development presently scheduled for 2001. In any event, we should extend the invitations.

I would like to close by inviting you to discuss these options and tactics, and others you may have during this panel or afterwards. In my country – where the Monsanto company can advertise to farmers that their saving of seed, in violation of Monsanto’s seed technology contract, is "biopiracy" – we need all the help we can get. Thank you for your attention and response to these remarks.

References

1 Surendra J. Patel, "Intellectual Property Rights in the Uruguay Round: A Disaster for the South?" ECONOMIC AND POLITICAL WEEKLY (India; May 6, 1989), 978-993.

2 "Investment Pact Can Be First FTAA Task, Business Execs Tell Ministers," AMERICAS TRADE, May 29, 1997.

3 "U.S. Proposes NAFTA Plus IPR Protection for Region-Wide Trade Pacts," INSIDE U.S. TRADE, February 21, 1997.

4 "Quad Ministers Call on Advanced LDCs To Take On New Obligations," INSIDE U.S. TRADE, October 1, 1996 and "Trade Officials Narrow Gaps on FTAA, Fail to Settle Crucial Issues," and "Draft Objectives and Principles for FTAA," INSIDE U.S. TRADE, November 7, 1997.

5 "Barchefsky Statement on FTAA Trade Negotiations," U.S. Information Agency, March 20, 1998.

6 E.g. "EEUU amenaza con sanciones," HOY (Quito) May 16, 1997.

7 "Ministerial Declaration of San José: Summit of the Americas Fourth Trade Ministerial Meeting," San José, Costa Rica, March 19, 1998.

8 Foro Empresarial de las Americas IV "Workshop: Intellectual Property Rights," Recommendation 37.

9 Danielle Knight, "Biopiracy: Beg, Borrow or Steil," TERRAVIVA (InterPress Service), January 27, 1998 and RAFI press releases at http://www.rafi.ca.

10 "Researchers against gene patents," THE WESTERN PRODUCER, February 19, 1998.

11 "A Memo to EU Ministers to Oppose Directives on Biotech," THIRD WORLD RESURGENCE, No. 87/88 (November-December 1997), 3.

12 Foro Empresarial de las Americas IV "Workshop: Intellectual Property Rights," Recommendation 108.

13 David Dickson, "Legal fight looms over patent bid on human/animal chimaeras," NATURE (vol. 392, April 1998), 423-424.

14 E.g. "Quad Ministers Call on Advanced LDCs to Take On New Obligations," INSIDE U.S. TRADE, October 1, 1998.