Intellectual Property and Electronic Commerce: Proposals in the WTO and Policy Implications for Developing Countries
This policy brief explains the mandate of the World Trade Organization (WTO) on electronic commerce under the work program on e-commerce, which was adopted by the WTO Ministerial Conference in 1998 and periodically renewed by subsequent Ministerials. It describes what has taken place on intellectual property related issues pertaining to e-commerce in the WTO TRIPS (Agreement on Trade Related Aspects of Intellectual Property Rights) Council. It also summarizes various proposals and suggestions that have been advanced in the Council since the Nairobi Ministerial Conference in December 2015 as well as recent proposals that have been advanced in the General Council until December 2018, some of which contain specific intellectual property (IP) related issues. As part of the recently launched plurilateral negotiations on e-commerce, a forum that is likely to become more prominent for this discussion, proposals have been re-submitted in March 2019, as well as others which have been tabled in April and May 2019. Finally, this brief presents an explanation of how IP issues may also affect other elements of e-commerce and the digital economy. Such issues are not the subject of existing proposals in the WTO, but may feature in future discussions.
Notification and Transparency Issues in the WTO and the US’ November 2018 Communication
Various WTO Members submitted a Communication to the WTO in November 2018 which, if accepted, would affect the implementation of Members’ transparency and notification obligations at the WTO. It would strengthen the already burdensome notification obligations and introduce new punitive administrative measures should obligations not be complied with. This paper provides information about WTO Members’ current notification obligations and their level of compliance; looks at the history of discussions on notifications, particularly in the Working Group on Notification Obligations and Procedures which took place in 1995 – 1996; and provides an analysis of the Communication. The analysis focuses on the extent to which the elements are consistent with or go beyond the current WTO disciplines. It concludes that non-compliance with notification obligations is real. However, rather than expanding obligations and introducing punitive measures, constructive and effective solutions should be based on nuancing of obligations in the context of a Special and Differential Treatment approach and through the use of incentives. It also acknowledges that countries with a chronic lack of capacities will continue to struggle with the WTO’s complex notification obligations and requirements until they attain higher levels of development and, thus, improved institutional capacities.
Why the US Proposals on Development will Affect all Developing Countries and Undermine WTO
US submitted two highly problematic proposals to the WTO in January and February 2019, undermining the place of Special and Differential Treatment (S&D) for developing countries at the WTO. In the first paper (WT/GC/757), US criticises the practice of self-declared development status by developing countries arguing that the North-South construct no longer makes sense due to “great development strides”. The second paper (WT/GC/764) – a proposed Decision for the General Council – provides a way to operationalise what was in the first paper. It gave criteria that would exclude 34 Members or 53.6 percent of global population from S&D treatment in “current and future WTO negotiations”. This fundamentally changes S&D from an unconditional right for all developing countries to a concession that may or may not be provided. Even for those developing countries that are not part of the 34 excluded Members, the US notes that in sector-specific negotiations, other Members could also be “ineligible for special and differential treatment.” This paper critiques the US approach on Special and Differential Treatment and concludes that these papers by the US cannot be the basis for any further discussions. All developing countries must be able to decide the pace of their adjustment to trade rules.
WHY THE US PROPOSAL (WT/GC/W/764) WILL AFFECT ALL DEVELOPING COUNTRIES AND UNDERMINE THE MULTILATERAL SYSTEM
US’ recent submissions to the WTO attempt to fundamentally change the concept of Special and Differential Treatment (S&D) at the WTO from an unconditional right for all developing countries to conditioned concessions available to only a few. This will affect developing countries and undermine the multilateral trading system!