OTN Special Update - Innovation - A New Frontier in Trade Multilateralism [2013-04-25]
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OTN Special Update - Innovation - A New Frontier in Trade Multilateralism [2013-04-25]

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OTN' Special Updates on selected trade issues

OTN' Special Updates on selected trade issues

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OTN Special Update - Innovation - A New Frontier in Trade Multilateralism [2013-04-25] OTN Special Update - Innovation - A New Frontier in Trade Multilateralism [2013-04-25] Document Transcript

  • OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developmentsgermane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandateand related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policydevelopments of currency and importance to the Caribbean.http://www.crnm.orgInnovation is emerging on the multilateral agendaarguably as the new frontier of multilateralcooperation at the WTO. This is not surprising for anumber of reasons.It is clear that innovation as a development issue wouldincreasingly influence the multilateral trade agendabecause as the Global Knowledge and CreativeEconomy deepens, developed and developingcountries are becoming concerned about the importantlinkage between innovation performance and tradeperformance and competitiveness.Although there are many factors that affectinternational competitiveness, innovation is the onlyfactor that allows countries regardless of their currentstages of development, to achieve sustainableeconomic growth and competitiveness in the longterm. Innovation is in its own way amassing a politicaleconomy within the global knowledge and creativeeconomic system in the sense that the ability toharness and wield innovation effectively will determinethe future ‘winners’ of this economic landscape andcan be a tool to close the development gap betweenrich and poor countries.The prospects for the evolution of the multilateraltrade agenda are also worth some consideration. Asbarriers to trade progressively reach de minimislevels, the WTO agenda as it currently stands willeventually reach natural conclusion. The questionthat emerges is what will be the future of multilateraltrade cooperation?IInnnnoovvaattiioonn –– AA nneeww ffrroonnttiieerr iinn ttrraaddeemmuullttiillaatteerraalliissmmOOFFFFIICCEE OOFF TTRRAADDEE NNEEGGOOTTIIAATTIIOONNSS…… ffoorr ttrraaddee mmaatttteerrssSPECIALOTN UpdateApril 22, 2013
  • OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developmentsgermane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandateand related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policydevelopments of currency and importance to the Caribbean.http://www.crnm.orgThe removal of barriers to trade should beconsidered but a single component of a widercomprehensive framework to ensure the effectiveand sustainable participation of both developed anddeveloping countries within the global tradingsystem. Arguably, an essential next step for trademultilateralism is facilitating the promotion of trade.Given that the nexus between innovation and tradeis inherently trade promoting, there should be roomfor this issue within a multilateral trade agenda thatis predicated on trade promotion.The TRIPS Council Discussion on the Nexus betweenIP and InnovationIn light of the foregoing, it is noteworthy that inNovember 2012, a new agenda item, ‘IntellectualProperty (IP) and Innovation’, was proposed fordebate and discussion by the United States ofAmerica (U.S) and Brazil at the meeting of the WTOTRIPS Council. In addition to the US and Brazil, anumber of countries participated in the discussionincluding, China, Egypt, India, Bangladesh, Chile,Chinese Taipei, Mexico, Peru, Canada, Australia, NewZealand, Switzerland, Japan, the European Union(EU), and Korea.In addition to recording measures that are beingadopted by WTO Members within their own2jurisdictions to encourage and promote innovation,the Meeting revealed a range of perspectives on therole of IP in innovation development and promotion.Amongst the various interventions that were offeredby the participating WTO Members, which offeredperspectives with varied nuances, certain trends inviewpoint emerged.It appeared that all the Member States concurredthat intellectual property protection is important forinnovation development but IP protection is but oneof a larger mix of different tools to promoteinnovation.With respect to providing IP rights protection thatoptimally encouraged innovation development, therewere concerns articulated about finding theappropriate balance of rights and obligations. Suchconcerns primarily related to balancing such rightsand obligations with respect to the health andpharmaceuticals sectors. In this regard, primarilydeveloping countries such as India and Brazilemphasized the need to take advantage of the TRIPSflexibilities. On the other hand, the EU cautionedabout the use of TRIPS flexibilities, signalling thatmeasures adopted under the TRIPS flexibilitiesshould not be construed as the norm but as theexception otherwise IPR regimes would be rendereduncertain and unsustainable.These opposing comments between developingcountries and developed countries seem to reflectthat frictions still remain regarding the interpretationof TRIPS flexibilities. The debate on the TRIPS,including the TRIPS Flexibilities, to some degree,pitted developing countries against developedcountries prior to the adoption of the DohaDeclaration, which affirmed categorically that theTRIPS “can and should be interpreted andimplemented in a manner supportive of WTOMembers’ right to protect public health and inparticular, to promote access to medicines for all”.The recognition of the need to maximise the use of
  • OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developmentsgermane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandateand related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policydevelopments of currency and importance to the Caribbean.http://www.crnm.orgTRIPS flexibilities does however underscore aprevious point that the WTO Members didthemselves observe, which is that IP protection is notenough to facilitate innovation development. It isclear moreover that IP protection regimes areinsufficient to achieve sustainable innovationperformance evenly across both developing anddeveloped countries.Defining the Appropriate WTO Forum for InnovationDevelopment IssuesThe observation cogently made by Egypt that thereexists an innovation divide amongst WTO Membersthat needs to be bridged in order to secure‘innovation for all’, provides an interesting segwaythat takes the discussion about innovation outsidethe narrow confines of the protection of IP and theTRIPS agenda.If it is accepted that innovation development isconcerned with a number of variables other thanappropriate levels of IP protection, and thatinnovation development is necessary for tradepromotion and trade competitiveness, then outsideof the TRIPS Council, what would be the appropriateWTO forum to deal with trade and innovationdevelopment issues in a manner that wouldengender ‘innovation for all’ and as a corollary,promote effective trade participation andcompetitiveness for all?The answer to this question is not immediatelyapparent. However, arriving at a solution is notinsurmountable. The circumstance under whichinnovation has appeared on the WTO agenda is notdissimilar to the circumstance that defined howintellectual property and trade were initially linked inthe multilateral trade agenda.Although the GATT 1947 does mention types ofintellectual property rights, there was no referenceto a programme to address the trade related aspectsof intellectual property rights per se. The linkage3between IP and trade that culminated in the TRIPSAgreement was advanced primarily through theinfluence of the United States. Similarly,notwithstanding the textual reference to innovationunder the TRIPS Agreement, there is no distinctprogramme to address innovation development as aspecific trade issue within the WTO.A linkage between innovation and trade in the WTO,albeit under a discussion about IP, has beenpromoted through the initiative of two countries –Brazil and the U.S. An important distinction is thatunlike the context that led to the TRIPS Agreement,with respect to innovation, a developed and adeveloping country have both influenced the agenda.This coalition of interests between a developed anddeveloping country augurs well for the potential forcreating a platform for innovation within the WTO.The creation of such a platform would not beimpaired by a perception that the platform itselfwould benefit developed country interests alone – astatus that beleaguered the IP and trade agendaprior to the conclusion of the Uruguay Round.An early multilateral consensus that innovation iscritical and that it is linked to trade competitiveness View slide
  • OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developmentsgermane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandateand related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policydevelopments of currency and importance to the Caribbean.http://www.crnm.orgcan help lead to the negotiation and adoption of a specific and appropriately calibrated agenda or agreement on tradeand innovation within the WTO in the future.Significance for CARICOMAt this juncture however, it is essential that CARICOM countries enter the fray before the dust settles in order to weighin on this subject matter and related agenda as it evolves. Just as other WTO members have done at the meeting of theTRIPS Council it would be useful for CARICOM to register how it regards the linkage between IP and innovation.Importantly it would be necessary for CARICOM to go further to provide its own advice on how it perceives the contextof trade and innovation development for small developing economies and what kind of multilateral cooperation,platform and rules of engagement would be appropriate to deal with that context.As long as the subject of innovation remains on the agenda of the TRIPS Council, CARICOM should utilise opportunitiesto participate in upcoming TRIPS Council Meetings to ensure that the agenda for trade and innovation is not dismissedand that it is influenced in a manner that is not inimical to small developing states interests.It should be remembered that with respect to the subject of the nexus between trade and innovation, CARICOM hasalready been a distinct leader and pioneer. In its bilateral trade negotiations with developed countries namely theEuropean Union and Canada, CARICOM has been seeking to persuade with the argument that innovation is inextricablylinked to trade performance and competitiveness, and that for this reason, innovation needs to be treated squarelywithin the trade cooperation agenda with its trading partners.Within the multilateral trade arena, CARICOM should exploit its trade diplomacy and capital that it has been leveragingwithin the bilateral trade arena. Furthermore, in this regard, CARICOM should seek to encourage consensus and to makestrategic alliances with other WTO Members that would bolster its position on this issue which is central to its economicdevelopment.The OTN invites you to participate in dialogue on trade and innovation development by registering with your respectiveeconomic planners and trade representatives within your own countries your perspectives on the linkages betweeninnovation, trade performance and sustainable economic development.The summary of the discussion on IP and Innovation from the Minutes of the November TRIPS Council Meeting isavailable on the OTN website for your reflection and discussion. Please access the Minutes on the OTN websitehomepage at http://www.crnm.org/index.php?option=com_docman&Itemid=113&task=doc_download&gid=1444*************4 View slide