Towards Seattle

Print edition : September 11, 1999

The Ministerial Conference of the World Trade Organisation in Seattle in the United States will provide an opportunity for poor countries, including India, to come together and fight for justice in trade-related matters.

THE Ministerial Conference of the World Trade Organisation (WTO), which is to be held at Seattle, Washington, from November 30 to December 31, presents both an opportunity and a danger. A great opportunity because if the poor countries of the world manag e to form an effective trade alliance, do their homework well and bargain hard, they may succeed in rectifying at least to some extent the injustice that had been done to them during the 1994 Marrakesh agreement on TRIPs (Trade Related Aspects of the Int ellectual Property Rights). On the other hand, should they fail to present a united front, there is a real and ominous possibility that whatever little remains of economic sovereignty in the TRIPs Agreement will be taken away by the rich countries. In th e language of economics, it is a zero sum game: the poor countries cannot play for a draw: it is a win or lose situation.

The Indian side should have begun the preparation for this crucial meeting from the beginning of this year, at the latest. In February, when the Patents Bill incorporating exclusive marketing rights (EMR) was being debated in Parliament, the Left parties reminded the Government about the need to prepare for this task in time. However, so far virtually nothing has been done by way of preparation for a meeting that would decide, effectively, whether India, ranked among the poorest countries in the world, would ever be able to move out of the poverty trap and meet the very modest objective of advancing a few inches towards becoming a middle-level income country like South Korea or Taiwan in a few generations' time.

If the Government were sincere about protecting India's economic interests, it could have done one of the following: First, it could have made an attempt to evolve a national consensus on this vital issue either by way of a meeting of the Rajya Sabha or, at the least, by holding consultations with the Opposition parties. Had this been done and a national consensus arrived at, no matter which party or coalition came to power after the elections, the country would have been ready with an agenda for the ne w government to work on. Unfortunately, so far no White Paper or Position Paper has been released setting out the issues that the Government of India would wish to raise in this important world meeting, or around which it would seek to form a trade allia nce with other poor countries. Since nothing has been done so far in this direction, the government that is to be formed in October, barely a month before this crucial conference, will hardly have the time to evolve a national consensus and act on it, no t to speak of forging alliances with other poor countries.

The second route could have been to take advantage of the election campaign to initiate a national debate on this vital issue. In keeping with one of the well-established norms of parliamentary democracy, the government could have placed before the elect orate its agenda for the Seattle meet and challenged other parties to place theirs, so that the people could comprehend the main issues and the various standpoints and then exercise their choice between the alternative positions, through the ballot box.

Rather than follow one of these two routes - of evolving a national consensus or of engaging in a national debate during the election campaign - the tendency has been to shy away from any discussion. And this is not the first time that a government has d eliberately sought to keep the people in the dark about an issue that would profoundly influence their lives and those of also future generations. Both the Congress(I) and Bharatiya Janata Party-led governments adopted devious means over the past four an d a half years to suppress information and to get one Patents Bill through Parliament with virtually no discussion.1 Both the Congress(I) and the BJP opposed the proposal of the Left parties for an in-depth scrutiny by a parliamentary committe e, assisted by experts, since they were motivated by their common desire not to let the people know or understand how their future was being mortgaged in order to appease the multinational companies domiciled in rich countries. In February, only four hou rs were allocated in the Rajya Sabha to discuss the Patents Bill incorporating exclusive marketing rights (EMR). The BJP and the Congress(I) did not find it necessary to field any speaker and relied on their joint voting strength to get the bill through.

In their common concern to avoid any meaningful dialogue on this sensitive issue they were helped by the obscure nature of the bill, which was loaded with legal, technical and scientific jargon making it virtually impossible for the uninitiated to compre hend what it was all about. Further, unlike a rise in the prices of, say vegetables, or the closure of a factory leading to unemployment, the impact of the global patents regime is not immediate. It is not known and understood that the global patents reg ime has irreversibly closed for India the option of ever becoming industrialised or even mildly developed.

The time constraint is serious for yet another reason. Even if one assumes that the new government is honest and sincere and is willing to rectify the injustices done at Marrakesh by raising the issues at Seattle, that cannot be done by India alone; it w ill have to be done by forming trade alliances with other less developed countries. Given its appallingly low share in world trade - 0.6 per cent, compared to 2.67 per cent at the time of Independence - India alone will not count for much. The rich count ries take care to form alliances to augment their bargaining strength: for example, the European Union (E.U.); the North American Free Trade Agreement (NAFTA) covering the U.S., Canada and Mexico; the Japanese connection with South-East Asia; organisatio ns and institutions such as the Organisation for Economic Cooperation and Development (OECD) and the G-7; and the global trinity of the World Bank, the International Monetary Fund and the WTO, which maintain year-round vigil to protect the interests of r ich countries.

Among the poor countries too one finds similar regional trade alliances, such as the ten-member Association of South East Asian Nations (ASEAN) in South-East Asia, the Andean Pact, Central American Common Market (CACM), the Caribbean Community (Caricom), the Mercado Caomu del Sur (Mercosur) in Latin America, the Preferential Trade Area for Eastern and Southern Africa (PTA), and the Union Douaniere et Economique de l'Afrique Centrale (UDEAC) in Africa. A major incentive for the formation of such alliance s was that these were permitted, under the General Agreement on Tariffs and Trade (GATT) rules, to extend to intra-region members additional concessions that were denied to other GATT members.

Where is the trade alliance that India belongs to? The most natural of such alliances could have been called the South Asian Common Market, comprising India and its immediate neighbours, countries that were once part of the British empire and share a com mon historical experience and common cultural roots. These countries also share many common economic interests; for example, they are concerned about the world prices of jute and tea and have opposed the patenting of basmati rice by an American company and the distribution of trade gains that would follow from the dismantling of the textile quotas with the conclusion of the infamous multi-fibre agreement (MFA) in 2005, to name a few. Such trade blocs, could have, by joining hands with other trade blocs in Asia, Africa and Latin America, effectively changed the world trade scenario and vastly improved the bargaining position of poor countries. So far, virtually nothing has been done to achieve this. Still, we have about three more months to work on suc h an alliance and put our diplomatic skills to test on economic issues. These days international diplomacy has more to do with the objective of furthering a country's economic interests than with the question of frontiers and war. It should not be the ca se that our soldiers would die in Kargil to protect our frontier against the infiltration of foreign soldiers and mercenaries while the managers of our economy sell the country to multinationals under what the government describes as "external compulsion ". Often, the "There Is No Alternative" (TINA) argument is advanced as an excuse for not doing anything.

We already know from the way the 8th (Uruguay) Round of GATT negotiations operated (1986-1993) what is in store for Indian negotiators in the Seattle meeting. The three key players in the Uruguay negotiations were the U.S., Europe and Japan. They exchang ed drafts among themselves and finalised everything and without bothering to seek the opinion of the poor countries. As the Jamaican Ambassador to GATT commented on the Dunkel Draft: "The draft package is reflective of the distribution of negotiating pow er and whether or not we are prepared to accept it as a reasonable basis for the further phase is academic."2 Apart from these three, a fourth player who was sometimes consulted was the Cairns Group of 14 members, representing rich and middle- income countries specialising in agricultural exports and having close links with the G-7. These included Australia, New Zealand, Argentina, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia, Malaysia, the Philippines and Thailand. These countrie s, accounting for one-tenth of the world's Gross Domestic Product (GDP) and manufacturing output and 30 percentage of the world's agricultural exports, made a much bigger impact than the much larger group of less developed countries.3 If the r ich countries ever wanted to consult the less developed countries, they talked to South Korea or Taiwan. The poor countries operated in the periphery, seldom consulted until the rich ones completed negotiations amongst themselves. As one commentator poin ted out: "Whatever the skills of the negotiators from the South, for the most part they are like extras on the GATT stage; the show can't go on without them, but nobody is remotely interested in what they have to say."4

One major reason for the poor performance of the less developed countries in the negotiations, apart from their weak economic power and lack of unity, was the absence of specialised staff and advises. In the 1990 Brussels meeting during the Uruguay Round negotiations, Carla Hills, the U.S. Trade Representative, brought along 400 advisers, a number that exceeded the combined strength of all the sub-Saharan Africa and Latin American trade missions. The formidable intellectual strength of those 400 people was augmented by another 200 or so, who were lent to Hills by corporate giants such as American Express, Citibank and IBM, and agro-chemical conglomerates such as Pfizer, Monsanto, Cargill and Du Pont. They had the ability to examine an issue from all po ssible angles and then to project into their drafts U.S. interests under the guise of benefitting the entire humankind. Although 70 of the 108 countries in GATT negotiations were the less developed ones, they had no voice and they expressed their views - on the few occasions on which they did - "within a framework scripted by the major industrialised states".5 It is hardly possible for India to bring together, as the U.S. did, such an array of skills or to match it in terms of the number of e xperts. But the least one would expect of a government is not to surrender without a fight, and to devote as much time and energy as possible to a proper homework. It seems likely that the Indian delegation will reach Seattle without having done adequate homework and without any significant skilled assistance, thanks to the criminal indifference, if not actual complicity with the multinationals, on the part of our government.

BROADLY speaking, five types of issues can be raised by the Indian delegation at the Seattle conference, all of which relate to the major changes brought about by the 1994 TRIPs Agreement at Marrakesh.

First, until the TRIPs Agreement, patents were a matter of national law. Each country formulated its own legislation taking into account its own national and human resources, national characteristics, the stage of development and history. Now, under TRIP s, each and every member-country of the WTO has to conform to an international patent regime and change its national law accordingly. The all-important question is: why this attempt to standardise and harp on conformity and make everything - in TRIPs and in some of the other proposals under discussion such as patents, labour standards, environmental standards, investment norms - uniform, when this is diametrically opposed to the norms laid down in the 1993 Convention on Bio-Diversity (CBD), which emphas ises that life cannot be sustained without diversity. If 150 countries have signed TRIPs, 170 countries have signed the CBD, and an overwhelming majority have signed both without taking notice of the essential conflict between these two international doc uments in terms of prescription. The CBD, in its Article 16.5, asserts that intellectual property rights must not be in conflict with conservation and sustainable use of biodiversity, a provision that has been totally ignored by those who composed the TR IPs Agreement. While in the case of agriculture, the higher yield of patented products induces the farmers to switch to these products from a more varied production pattern, the resulting narrowing of genetic base makes the economy and society more vulne rable to plant diseases and epidemics.6 The emphasis on conformity in TRIPs and that on diversity in the CBD cannot be right at the same time; one or the other has to go.

Secondly, we can question this concern over "piracy" of intellectual property now when, historically, every developed country of today has at some time borrowed or copied technology from other countries in the course of its development. Japan, South Kore a, Taiwan, Singapore and Hong Kong were among the last to adopt foreign technology on a large scale by way of what came to be known as "reverse engineering", but the developed European countries also did the same - to a larger extent in the case of Italy and to a smaller extent as in the case of U.K., while they were undergoing the process of industrialisation. The reason for the globalisation of the patent regime now is to make such copying impossible and thus to take away the option of reverse enginee ring. The result is that backward countries of today will remain backward and poor for ever as they will not have the option of copying and eventually developing their own technologies and thereafter selling those under their own brand names. They will b e forced to depend permanently for technology on multinational companies, which control more than 80 per cent of world patents.

Thirdly, we can challenge the extension of the patent period to 20 years under TRIPs when there are strong arguments against doing so, and demand that it be revised downwards to four or five years in this age of fast changing technologies and emergence o f new products. In the case of India, black-and-white and colour television sets, video cassette recorders, cable televison and multimedia came in quick succession - after every four or five years. Over the past 10 to 12 years, we have seen how 286 compu ters were replaced by the 386 ones, then by the 486 ones, and this in turn by the Pentium and its subsequent versions. We have also seen how the measure of the hard-disk capacity of computers has changed from kilobytes to megabytes and then to gigabytes, all within the last 10 years or so. In such a situation, a product becomes grossly out of date long before its patent period of 20 years expires. The only rationale behind lengthening the patent period to 20 years is to perpetuate the technological depe ndence of poor countries on multinationals.

Fourthly, we can challenge conceptually the decision to extend patenting to life forms in the TRIPs Agreement, and the consequent rush of multinational agri-business firms to scour the countryside of poor countries to collect, by means legal or illegal, plants and their germplasm. Such plant varieties are taken to their own countries and, after some tinkering, patented under their own names to establish themselves as their legal owners for the patent the period world over, and to take away from others, including indigenous Third World producers who would have been producing them for centuries, the right to produce them. This conference gives us the opportunity to establish safeguards against bio-piracy, particularly of medicinal plants.

Fifthly, we can question how the U.S. can exercise both the options, multilateral action through the WTO and unilateral action by way of "special 301" which is actually article 1303 of the U.S. Trade Act, which operates like Article 301, also known as Su per 301. Under the law the U.S. Congress has passed on the Uruguay Round of GATT negotiation, in case of any conflict between the GATT-WTO rules and the U.S. law, the latter would prevail. We can insist that the U.S. should desist from such open and decl ared violation of GATT-WTO rules and that it should not flex its superpower muscles to force poor countries to do what it is itself not willing to do.

There are many other issues that can be raised, but these are major ones. In case Third World countries fail to unite and push these demands, some of the safeguards that still exist in the TRIPs Agreement are likely to be taken away. Under Articles 27.2 and 27.3 of the Marrakesh TRIPs Agreement, the countries may deny patent protection on a number of grounds - for reasons of public order, morality, or protecting human, animal or plant life, or protecting the environment. Protection can also be denied fo r inventions involving "diagnostic, therapeutic and surgical methods for the treatment of humans and animals, and plants and animals (other than micro-organisms) and biological process (other than microbiological processes) for their production".7 Reference to public order and morality are wide enough to permit a significant amount of discretionary power to the governments. "Immorality" can mean obscenity, blasphemy, breach of peace, immoral activities and so on, while the French counterpart of "public order", "ordre public" is closer to "public policy" than to "public order". The U.K. used this provision to refuse twice a patent on a contraceptive device.8 There is a serious risk that this provision would be taken away at Seattle unless the poor countries resolve to unite and fight.

Biplab Dasgupta, an economist, is a CPI(M) Rajya Sabha member.

1. Biplab Dasgupta, "Patent Lies and Latent Danger - a study of the political economy of patent in India", in Economic and Political Weekly, 17-24 April, 1999, pp 979-993.

2. Kevin Watkins, Fixing the Rules: North South Issues in International Trade and GATT Uruguay Round, Catholic Institute for International Relations, London, 1992, p 31.

3. Rod Typres, "The Cairns Group Perspective", in K.A. Ingersent, A.J. Rayner, and R.C. Hine(eds.), Agriculture in the Uruguay Round, St. Martin's Press, New York, 1994, pp 88-109.

4. Watkins, op. cit., p 37.

5. Raymond F. Hopkins, "Developing Countries in the Uruguay Round: Bargaining under uncertainty and inequality", in William P. Avery (ed.) World Agriculture and the GATT, Lynn Rienner Publishers, Boulder and London, 1993. pp 143-163.

6. H. William Lesser, Equitable Patent Protection in the Developing World-Issues and Approaches, Eubios Ethics Institute, Christchurch (New Zealand) and Sukuba (Japan), 1991, p 6.

7. UNCTAD (United Nations Conference on Trade and Development), Trade and Development Report, 1993, UNCTAD, Geneva, 1994; The Outcome of the Uruguay Round: An Initial Assessment, UNCTAD, Geneva, 1994; Biplab Dasgupta, Structural Adjustme nt, Global Trade and the New Political Economy of Development, Sage-Vistaar (Delhi) and Zed Books (London), 1998, Chapter IV; Jeffrey J. Schott (assisted by Johanna W. Buurman), The Uruguay Round, Institute for International Economics, Washing ton DC, 1990.

8. Edward Armitage and Ivor Davis, 1994, Patents and Morality in Perspective, Common Law Institute of Intellectual Property, London.

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