OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN). The newsletter provides analyses of international trade policy issues and developments relevant to the Caribbean. It focuses on the OTN's work, trade negotiation topics within its mandate, and related activities. The intention is to provide stakeholders awareness of important trade policy changes affecting the Caribbean. The document discusses innovation emerging as a new frontier in multilateral trade cooperation at the WTO. It notes that as knowledge and creative economies grow, countries are increasingly concerned with the link between innovation, trade performance, and competitiveness. While intellectual property protection is important, innovation depends on broader factors. The prospects for multilateral trade cooperation expanding beyond reducing barriers to

1. 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 developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org
Innovation is emerging on the multilateral agenda
arguably as the new frontier of multilateral
cooperation at the WTO. This is not surprising for a
number of reasons.
It is clear that innovation as a development issue would
increasingly influence the multilateral trade agenda
because as the Global Knowledge and Creative
Economy deepens, developed and developing
countries are becoming concerned about the important
linkage between innovation performance and trade
performance and competitiveness.
Although there are many factors that affect
international competitiveness, innovation is the only
factor that allows countries regardless of their current
stages of development, to achieve sustainable
economic growth and competitiveness in the long
term. Innovation is in its own way amassing a political
economy within the global knowledge and creative
economic system in the sense that the ability to
harness and wield innovation effectively will determine
the future ‘winners’ of this economic landscape and
can be a tool to close the development gap between
rich and poor countries.
The prospects for the evolution of the multilateral
trade agenda are also worth some consideration. As
barriers to trade progressively reach de minimis
levels, the WTO agenda as it currently stands will
eventually reach natural conclusion. The question
that emerges is what will be the future of multilateral
trade cooperation?
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SPECIAL
OTN Update
April 22, 2013

2. 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 developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org
The removal of barriers to trade should be
considered but a single component of a wider
comprehensive framework to ensure the effective
and sustainable participation of both developed and
developing countries within the global trading
system. Arguably, an essential next step for trade
multilateralism is facilitating the promotion of trade.
Given that the nexus between innovation and trade
is inherently trade promoting, there should be room
for this issue within a multilateral trade agenda that
is predicated on trade promotion.
The TRIPS Council Discussion on the Nexus between
IP and Innovation
In light of the foregoing, it is noteworthy that in
November 2012, a new agenda item, ‘Intellectual
Property (IP) and Innovation’, was proposed for
debate and discussion by the United States of
America (U.S) and Brazil at the meeting of the WTO
TRIPS Council. In addition to the US and Brazil, a
number of countries participated in the discussion
including, China, Egypt, India, Bangladesh, Chile,
Chinese Taipei, Mexico, Peru, Canada, Australia, New
Zealand, Switzerland, Japan, the European Union
(EU), and Korea.
In addition to recording measures that are being
adopted by WTO Members within their own
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jurisdictions to encourage and promote innovation,
the Meeting revealed a range of perspectives on the
role of IP in innovation development and promotion.
Amongst the various interventions that were offered
by the participating WTO Members, which offered
perspectives with varied nuances, certain trends in
viewpoint emerged.
It appeared that all the Member States concurred
that intellectual property protection is important for
innovation development but IP protection is but one
of a larger mix of different tools to promote
innovation.
With respect to providing IP rights protection that
optimally encouraged innovation development, there
were concerns articulated about finding the
appropriate balance of rights and obligations. Such
concerns primarily related to balancing such rights
and obligations with respect to the health and
pharmaceuticals sectors. In this regard, primarily
developing countries such as India and Brazil
emphasized the need to take advantage of the TRIPS
flexibilities. On the other hand, the EU cautioned
about the use of TRIPS flexibilities, signalling that
measures adopted under the TRIPS flexibilities
should not be construed as the norm but as the
exception otherwise IPR regimes would be rendered
uncertain and unsustainable.
These opposing comments between developing
countries and developed countries seem to reflect
that frictions still remain regarding the interpretation
of TRIPS flexibilities. The debate on the TRIPS,
including the TRIPS Flexibilities, to some degree,
pitted developing countries against developed
countries prior to the adoption of the Doha
Declaration, which affirmed categorically that the
TRIPS “can and should be interpreted and
implemented in a manner supportive of WTO
Members’ right to protect public health and in
particular, to promote access to medicines for all”.
The recognition of the need to maximise the use of

3. 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 developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org
TRIPS flexibilities does however underscore a
previous point that the WTO Members did
themselves observe, which is that IP protection is not
enough to facilitate innovation development. It is
clear moreover that IP protection regimes are
insufficient to achieve sustainable innovation
performance evenly across both developing and
developed countries.
Defining the Appropriate WTO Forum for Innovation
Development Issues
The observation cogently made by Egypt that there
exists an innovation divide amongst WTO Members
that needs to be bridged in order to secure
‘innovation for all’, provides an interesting segway
that takes the discussion about innovation outside
the narrow confines of the protection of IP and the
TRIPS agenda.
If it is accepted that innovation development is
concerned with a number of variables other than
appropriate levels of IP protection, and that
innovation development is necessary for trade
promotion and trade competitiveness, then outside
of the TRIPS Council, what would be the appropriate
WTO forum to deal with trade and innovation
development issues in a manner that would
engender ‘innovation for all’ and as a corollary,
promote effective trade participation and
competitiveness for all?
The answer to this question is not immediately
apparent. However, arriving at a solution is not
insurmountable. The circumstance under which
innovation has appeared on the WTO agenda is not
dissimilar to the circumstance that defined how
intellectual property and trade were initially linked in
the multilateral trade agenda.
Although the GATT 1947 does mention types of
intellectual property rights, there was no reference
to a programme to address the trade related aspects
of intellectual property rights per se. The linkage
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between IP and trade that culminated in the TRIPS
Agreement was advanced primarily through the
influence of the United States. Similarly,
notwithstanding the textual reference to innovation
under the TRIPS Agreement, there is no distinct
programme to address innovation development as a
specific trade issue within the WTO.
A linkage between innovation and trade in the WTO,
albeit under a discussion about IP, has been
promoted through the initiative of two countries –
Brazil and the U.S. An important distinction is that
unlike the context that led to the TRIPS Agreement,
with respect to innovation, a developed and a
developing country have both influenced the agenda.
This coalition of interests between a developed and
developing country augurs well for the potential for
creating a platform for innovation within the WTO.
The creation of such a platform would not be
impaired by a perception that the platform itself
would benefit developed country interests alone – a
status that beleaguered the IP and trade agenda
prior to the conclusion of the Uruguay Round.
An early multilateral consensus that innovation is
critical and that it is linked to trade competitiveness

4. 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 developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org
can help lead to the negotiation and adoption of a specific and appropriately calibrated agenda or agreement on trade
and innovation within the WTO in the future.
Significance for CARICOM
At this juncture however, it is essential that CARICOM countries enter the fray before the dust settles in order to weigh
in on this subject matter and related agenda as it evolves. Just as other WTO members have done at the meeting of the
TRIPS 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 context
of 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 opportunities
to participate in upcoming TRIPS Council Meetings to ensure that the agenda for trade and innovation is not dismissed
and 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 has
already been a distinct leader and pioneer. In its bilateral trade negotiations with developed countries namely the
European Union and Canada, CARICOM has been seeking to persuade with the argument that innovation is inextricably
linked to trade performance and competitiveness, and that for this reason, innovation needs to be treated squarely
within 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 leveraging
within the bilateral trade arena. Furthermore, in this regard, CARICOM should seek to encourage consensus and to make
strategic alliances with other WTO Members that would bolster its position on this issue which is central to its economic
development.
The OTN invites you to participate in dialogue on trade and innovation development by registering with your respective
economic planners and trade representatives within your own countries your perspectives on the linkages between
innovation, trade performance and sustainable economic development.
The summary of the discussion on IP and Innovation from the Minutes of the November TRIPS Council Meeting is
available on the OTN website for your reflection and discussion. Please access the Minutes on the OTN website
homepage at http://www.crnm.org/index.php?option=com_docman&Itemid=113&task=doc_download&gid=1444
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