On October 15-16, 2020, the Council for Trade-Related Aspects of Intellectual Property Rights of the WTO (WTO-TRIPS Council) will be holding an important meeting that has a special interest for the LDCs, in particular for graduating LDCs such as Bangladesh. The meeting will initiate discussion on the extension of waivers granted to the LDCs under Article 66.1 of the TRIPS Agreement.
According to the TRIPS Agreement of 1995, WTO members are to comply with various provisions relating to enforcement of intellectual property rights in connection with international trade. The Agreement had introduced intellectual property law into multilateral trading system and requires members to enforce various disciplines with regard to patents, licence, trademarks, geographical indicators, designs, dispute resolution, etc. In view of the special needs of LDCs, Article 66.1 of the Agreement accorded LDC members a ten-year exemption (till 2005) from most obligations under the Agreement. The waiver allows LDCs exemptions from applying provisions of the TRIPS Agreement except for most favoured nation (MFN) and national treatment obligation. The flexibility took into consideration economic, financial and administrative constraints of the LDCs, and allowed them time to put in place necessary institutional and technical capacities. In response to requests by the LDCs, the general transition period was subsequently extended twice as per decisions of the TRIPS Council—in 2005, for eight years, till July 2013, and following this, in June 2013, for another eight years, till July 1, 2021.
It can be noted that in addition to the general transition period, LDCs were also granted a specific transition period for pharmaceutical products in 2001, in accordance with the WTO's Doha Ministerial Conference declaration on TRIPS Agreement and Pharmaceutical Products. This was initially granted for 15 years, till January 2016, followed by a second extension for 17 years, till January 1, 2033. The pharmaceutical decision provided legal cover for waiver of patent in producing pharmaceutical products, and for using compulsory licensing exclusively for exports.
Bangladesh is one of the very few LDCs that have been able to take advantage of both the TRIPS Article 66.1 and, more particularly, the pharmaceutical waiver. In view of the above, and in consideration of Bangladesh's upcoming graduation, the discussion to be held in the TRIPS Council is thus of heightened interest to our country.
The 2015 decision on TRIPS and Pharmaceuticals specifically mentions that an LDC will no longer be eligible to enjoy the benefits if it ceases to be an LDC prior to expiry of the transition period ("whichever is earlier"). This would mean that Bangladesh will not be able to benefit from the pharmaceutical waiver once it graduates out of the LDC group in 2024, although the waiver has been granted till end of 2032. This will understandably have important repercussions for our pharmaceutical industry as it will then be required to comply with patent and licence requirements as per the TRIPS Agreement.
The 2016 decision of the TRIPS Council stipulates that an LDC can submit a duly motivated request for an extension of the transition period (which, as was noted before, ends in 2021). However, this can be done as long as a country is an LDC and not after it had already graduated. Accordingly, now is an appropriate time for the LDCs to take the initiative for yet another extension of the TRIPS waiver. This the LDC group in the WTO has done, and the duly motivated request proposal will be discussed in the upcoming TRIPS Council meeting.
It needs to be recalled, and appreciated, that Bangladesh has played a key role in the submission to the TRIPS Council made by Chad on October 1, 2020 on behalf of the LDC group in the WTO. The submission rightly mentions the adverse implications of Covid-19 pandemic on the economies of the LDCs as an immediate motivating factor. The submission argued that pre-existing difficulties of the LDCs have been exacerbated by the various health-related adverse impacts of Covid-19, lockdown, supply-chain disruptions, and demand-side constraints. It mentioned that LDCs need more time to build the technology base and supply-side capacities which will enable them to garner the required strength to comply with the TRIPS obligations.
In this connection, it may also be noted that India and South Africa, both (non-LDC) developing country members of the WTO, have also submitted a proposal seeking waiver as regards compliance with TRIPS Agreement—concerning such areas as copyrights, industrial design, patents and protection of undisclosed information—citing the adverse impacts of the pandemic.
Sometimes it is said that, in WTO, countries get not what they deserve but what they negotiate. LDCs will, therefore, need to demonstrate a unified stand in the upcoming discussion in the TRIPS Council, irrespective of their graduating or non-graduating status. Bangladesh and other graduating LDCs should remain proactively engaged since they have high stakes in the outcome of the discussions.
It is important to note that the text of the duly motivated request states that in view of the TRIPS provision (other than Articles 3, 4 and 5 relating to MFN and national treatment), LDCs seek waiver for as long as they remain an LDC, and for a period of twelve years from the date of entry into force of the decision of the General Assembly to exclude a member from the LDC category. This would allow Bangladesh to enjoy the benefit of the waiver till 2036 should the country graduate in 2024.
The other critically important point for Bangladesh relates to the TRIPS waiver for pharmaceuticals. As was noted above, the TRIPS and Pharmaceuticals decision categorically mentions that whilst the transition period has been extended till December 31, 2032, a beneficiary LDC will cease to enjoy the waiver if it is no longer an LDC. This would mean that Bangladesh will no longer be eligible to enjoy the pharmaceutical waiver following its graduation in 2024. Bangladesh obviously has a keen interest to bring this issue to the TRIPS Council; it is understood that it has already made a submission to this effect. Whether other LDCs will demonstrate solidarity with Bangladesh in equal measure—as in the case of extension of the aforesaid Article 66.1 of the TRIPS Agreement—is not clear since the majority of the LDCs don't have a strong domestic or export-oriented pharmaceutical industry, as is the case with Bangladesh. In view of this, whether the upcoming discussion on TRIPS Article 66.1 transition may be taken advantage of to include the pharmaceutical issue in an all-encompassing TRIPS extension decision is worth thinking about.
If Covid-19 is the key area of concern and the reference point in considering the TRIPS Article 66.1 extension, in the course of the upcoming discussions in the TRIPS Council members ought to also give equal importance to the interests of LDCs with regard to medicines and production of pharmaceutical items. While most LDCs do not have a strong pharmaceutical industry of their own, they have benefitted significantly from the import of low-cost pharmaceutical products from Bangladesh under compulsory licence and otherwise. Indeed, in FY 2020, about 29 percent of Bangladesh's global export of pharmaceutical products, worth about USD 136.0 million, went to 27 LDCs. Bangladesh should use the upcoming discussion on transition as an opportunity to bring on board the issue of extension of the TRIPS and Pharmaceuticals decision from the vantage point of graduating LDCs.
Bangladesh and other graduating LDCs should ask for an extension of pharmaceuticals waiver till the end of the transition period (till end of 2032)—irrespective of the status of the WTO member as LDCs or graduated LDCs—similar to the one that has been sought in the duly motivated request placed before the TRIPS Council in view of the TRIPS Article 66.1.
Prof. Mustafizur Rahman is Distinguished Fellow, Centre for Policy Dialogue (CPD).