Introduction the right balance between the interests of those

Introduction

The eighth
round of global trade negotiations carried out under the GATT began in 1986
with a meeting in Punta del Este and was concluded in April 1994 in Marrakesh.
The round produced some important results for the liberalization of
international trade and relevant administrative reforms were put in action.
With the Uruguay Round, moreover, intellectual property rights (IPRs)
officially entered into the multilateral system of trade.

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Intellectual property is defined by the World
Intellectual Property Organization (WIPO) as referring to “creations of the
mind, such as inventions; literary and artistic works; designs; and symbols,
names and images used in commerce”. Intellectual property rights are protected
in law by patents, copyright, trademarks and other instruments to recognize or
financially benefit people from what they invent or create. The IP system’s
goal is to help creativity and innovation to flourish; moreover, IPRs try to
ensure the right balance between the interests of those who hold the rights to
intellectual property and those who seek to use that property. In so doing, they
promote innovation and create research incentives, which drives economic growth
(European Parliament, 2017).

Recent studies demonstrate
the important contribution of intellectual property rights to the American and
European economies. The differences between the respective IPRs systems are
comparatively small, yet seen as hard to overcome. The negotiation of the EU-US
Transatlantic Trade and Investment Partnership may present the opportunity for
a step change in EU-US relations in respect of intellectual property rights
(European Parliament, 2014, p. 1).

The Trade-Related Aspects of Intellectual Property
Rights (TRIPs) Agreement

Since 1994, defining the international application of international
property rights has become a major preoccupation for the General Agreement on
Tariffs and Trade (GATT) system and for the World Trade Organization (WTO). In
that year, indeed, an international agreement about the application of intellectual
property rights was concluded: the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPs).

As many other agreements concluded under the WTO, the TRIPs agreement
was integrated with some previously concluded conventions on the matter of
intellectual property rights, the most important being the Paris Convention for
the Protection of Industrial Property adopted in 1883 and the Berne Convention for
the Protection of Literary and Artistic Works concluded in 1886.

The problem of intellectual property rights has
increasingly become an important issue for international trade. For a long
period, many newly industrializing countries (NICs) and least developed
countries (LDCs) opposed to involving the issue of IP into the multilateral
system, asserting that a specific international organization, expressly created
to handle multilateral conventions on the question, already existed since the end
of the 20th century: this was the WIPO.  Nowadays, the reciprocal sustaining relation
between the two organizations represents a successful case of cooperation
between international organizations, despite their differences in structure,
goals and mechanisms.

In the 1980s and 1990s, a number of the most economically advanced
industrialized nations faced increasing competition in manufactured exports
from NICs in Asia and Latin America. This increasing competition focused
attention on domestic policies of these nations that may adversely or even
unfairly disadvantage American or European trading interests (Treibilcock,
Howse, Eliason, 2013, p. 514).  As a
matter of fact, before the Uruguay Round, many NICs and LDCs did not protect or
insufficiently protected intellectual property related to more technologically
advanced countries: piracy, trade mark forgery and systematical violation of
patents were commercial strategies largely abused in some geographical areas,
and had become real instruments of economic policy for some countries.

The main concerns which dominated the developed-country demands were
that, firstly, many developing countries had often afforded a shorter period of
patent protection to products such as pharmaceuticals than the United States and
most European countries, with the result that domestic imitations of these
products often dominated developing-country markets and the original North
American or European producer who financed the innovation in the first place
faced a resultant loss of potential foreign sales. Furthermore, the
patent-granting process has been seen as lacking in transparency, legal
security and certainty in many developing countries. Finally, the tolerance of
some developing-country governments with respect to the production and sale of
pirate sound recording and videos, and their attachment to cheap imitations which
have no relationship to the original producer’s own manufactures, sharply
influenced the resistance of those countries as well. (Treibilcock, Howse,
Eliason, 2013, p. 514). 

The attempt to introduce the issue of
intellectual property rights into the negotiations of the Tokyo Round failed
because of the resistance of the developing countries. As a result of the
persistence of the abuses of the use of intellectual property rights, the USA,
the Japan and the European Communities (CE) decided to introduce in their
territories unilateral measures of retaliation against the firms of those
countries which did not respect the intellectual property related to them.

Consequently, many developing countries and LDCs agreed to start the
negotiations in the Uruguay Round; those countries, however, asked to the most
technologically advanced countries to took on precise commitments about the
transfer of technologies, about the installation of the production units and
about the formation of local workers in order to accelerate the development of
the less advanced areas, as a condition for starting the consultations. Under
these provisions, the negotiations were concluded and the agreement was
stipulated.  

Further steps towards an improvement in the dealing of the issue were
mainly the Pharmaceutical Access Act of 2003 and the consequent decision to
make it permanent and to officially introduce it into the TRIPs agreement.

It is in this manner that the issue of intellectual property rights has
become a prominent item on the trade agenda, as reflected in the extensive
provisions on intellectual property in both the Uruguay Round Final Act and the
North American Free Trade Agreement (NAFTA), and the very far-reaching
‘TRIPS-plus’ provision of more recent Preferential Trade Agreements
(Treibilcock, Howse, Eliason, 2013, p. 514).

The TRIPs Agreement consists of seven parts:

1.      A statement of general principles
and of the interaction of the Agreement with the Paris and Berne Conventions;

2.      Substantive norms with respect to
the protection of the various forms of intellectual property;

3.      Obligations with respect to the domestic
enforcement of intellectual property rights;

4.      Obligations with respect to the
facilitation in domestic legal systems of the acquisition and maintenance of
intellectual property rights;

5.      Dispute settlement;

6.      Transitional arrangements;

7.      A WTO-based institutional framework
for TRIPs.

The Agreement in the Uruguay Final
Act represents a complex balance between conflicting national perspectives and
interests with respect to the protection of intellectual property rights (Treibilcock,
Howse, Eliason, 2013, p. 528).

 

 

 

 

 

 

 

The Transatlantic Trade and Investment Partnership
(TTIP)

The Transatlantic Trade and Investment Partnership is a proposed trade
agreement between the United States and the European Union, whose aim is the
promotion of trade and multilateral growth “on both sides of the Atlantic”, to
increase employment and competitiveness, as well as creating a common approach
to global trade. The TTIP would create the world’s largest Free Trade Agreement
(FTA), as the USA and EU accounted for almost half of global GDP and 30% of
world trade in 2012 (European Parliament, 2014, p. 25).

The TTIP is the largest bilateral trade initiative ever negotiated according
to Karel de Gucht, European Commissioner for Trade between 2010 and 2014, not
only because it involves the two largest economies in the world but also
“because of its potential global reach in setting an example for future
partners and agreements”.

Even if the initial intentions were good, the agreement is far from
being concluded, as there are still many outstanding issues, especially in the
area of market access. In general, it presents many controversial elements and
it is source of disagreement from all over the world.

            The deal was designed
by the ‘High Level Working Group on Jobs and Growth’ (HLWG), which was set up
in 2011 and chaired by the European Trade Commissioner Karel De Gucht and the
then US Trade Representative Ron Kirk. In its final report, the Group not only
recommended entering into the negotiations but went into some detail as to what
should be put on the table, with the far-reaching aim of moving towards a
“transatlantic marketplace.” (Todhunter, 2014).

On the 14th of June 2013, the Member States
of EU gave the European Commission the green light to start talks with the
United States and adopted clear guidelines for the European Commission. In
particular, the Member States asked the European Commission to ensure “a
balanced outcome between the elimination of duties, the elimination of
unnecessary regulatory obstacles to trade and an improvement in rules, leading
to a substantial result in each of these components and effective opening of
each other’s markets.”   (European
Commission, 04/2016, p. 2).

Twenty-four joint EU-US working groups are set for working
and developing the TTIP Agreement texts, each of them considering a separate
aspect of the deal. Negotiations should be held in weekly cycles alternating
between the USA and Brussels. The negotiators were hoping to conclude their work by the end of 2016,
but it did not happen.

In 2014 the European Commission released some
documents about the negotiations, in which the main areas treated are
underlined; those are: market access, regulatory convergence and non-tariff
barriers (NTBs) and, finally, broader rules, principles and modes of co-operation
for global trade.  

The TTIP includes chapters on market access for goods and services that
aim to remove “custom duties on goods and restrictions on services,
gaining better access to public markets, and making it easier to invest”. The
goods part includes rules on market access for goods, agriculture and processed
agricultural products, and rules of origin. The European objective is to ensure
an ambitious and balanced outcome across the three main market access areas
(tariffs, services and public procurement) (European Commission, 04/2016, p. 4).

As for regulatory cooperation, the EU aims to establish a framework for
enhanced cooperation between regulators from both sides in a way that reduces
obstacles to trade, and which provides specific outcomes on key industrial
sectors. The main principle followed is that outcomes would never lower
existing standards of protection (European Commission, 04/2016, p. 5).

Finally, the last part, which is about general rules and modes of
co-operation, sees the EU wanting to contribute to the development of
international trade rules, both bilaterally and in the multilateral context.
The main areas discussed are: sustainable development, competition, investment
protection, customs and trade facilitation, energy and raw materials and
intellectual property rights.

Many concerns have arisen about the transparency and democratic base of
the agreement. About the issue, the European Commission has developed an
unprecedented policy of transparency in the TTIP negotiations. All the EU
position papers and negotiating proposals are made public shortly after they
are tabled in the negotiations (European Commission, 04/2016, p.6-7).

            The
parties of the agreement hoped to conclude the deal before the end of 2016; however,
international circumstances have changed and the objective set could not be
achieved. The decision of Great Britain to exit the European Union first, and
the change of Presidential Office in the USA with the election of Donald Trump
then, have influenced the path of the conclusion of the TTIP, which is now
increasingly uncertain. In particular, French and German ministers have blamed
American “protectionism” for the failure of the TTIP. Indeed, the revival of
protectionist ideas and the belief that opening to a higher liberalization of
trade with foreign countries would damage the domestic competition leaving the
own country worse off, have stopped the process of conclusion of the agreement
and it seems that the TTIP negotiations will go nowhere in the next years.

 

 

 

 

Intellectual property rights in the TTIP

In the context of the TTIP, intellectual property rights are, as
mentioned before, part of the broader rules on trade which are dealt in the
proposed agreement. However, IPRs have always been  controversial in international trade and their
regulation is difficult to solve in the TTIP as well.

According to the European Commission, discussions are ongoing to identify
issues of common interest. Both sides have presented proposals on some of
potential components of the TTIP. The EU, for example, has made proposals on
border measures. The EU would also like to find a pragmatic solution to
guarantee an appropriate level of protection for Geographical Indications (GIs)
on agricultural products, foodstuffs and those wines and spirits not yet
protected under the existing 2006 EU-US bilateral Trade in Wine Agreement. (European
Commission, 04/2016, p. 7).

Both parties apply the WTO Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPs) as well as other
major international conventions on IP rights. U.S. policies are based on
broadly similar principles to EU rules, but some differences remain.

With regard to the enforcement of intellectual property rights, the EU
and the USA are both interested in high intellectual property rights standards
and in promoting strong policies against counterfeiting. However, positions
differ strongly on two main issues: geographical indications (GIs) and
anti-piracy policy on the internet (European Parliament, 2017).

            Geographical
Indications are an important issue of IP for European countries, as many food
and drink products are produced or processed in specific regions; those
products have ‘names of origin’ linked to the place they are from. The EU and
the USA currently protect names of origin differently: European laws protect
them as Geographical Indications, whereas US laws allow producers to protect
them as trademarks, but many European products are not registered and thus they
are not protected. Consequently, consumers in the USA are often lead to misleads
and European producers lose a lot. That’s the reason why the EU would like to
better regulate the issue, through an agreed list of protected EU GIs, with
rules aiming to stop other users misusing them. From a U.S. perspective, which
protects GIs through trademark law, it would appear to be very difficult to
find a solution within TTIP (European Parliament, 2017).

Concerning anti-piracy policy on the internet, and aspects of copyright
in general, such as resale rights for visual artists and public performance and
broadcasting rights, the EU aims at agreeing with the USA stronger binding
commitments than the existing ones.

As underlined before, the USA and the EU,
together with other industrialized nations, have always pushed for better
enforcement measures against counterfeit and pirated goods and for regulation
of IP from the perspective of trade policy. Moreover, a number of bilateral and
regional Free Trade Agreements between the EU or USA and third countries have
included IPRs chapters or IPRs provisions going beyond the minimum standards
agreed at multilateral level (European Parliament, 2014, p. 1).

Since an IP chapter is then expected to feature in the TTIP under
negotiation, as a joint effort to promoting strong IP protection globally
(European Parliament, 2014 p. 1), the spontaneous question which arises is:
what could this chapter give as added value to both parties, and especially,
from an European point of view, why should European countries want such
agreement?

Civil societies and consumer associations have
risen concerns about the advantages that the TTIP could give to the area of
IPR. As previously shown, the main concerns are about specific issues, such as
GIs and copyright questions. These attentions, however, could really prove a
stumbling block in the talks due to differences of approach between the
parties.

The common believe is that including copyright and patent provisions
will lock up technology and stifle independent innovation, leading ultimately
not to job creation but to stagnating employment. Moreover, criticisms point to
the lack of transparency in similar deals such as the Anti-Counterfeiting Trade
Agreement (ACTA) and the Trans-Pacific Partnership (TPP). Skepticism that
negotiators take into account the broader interests of Internet users, then,
arose: the belief is that TTIP will be another opportunity to have binding
ACTA-like provisions.

The Transatlantic Consumer Dialogue (TCD) has expressed concerns that
the IP provisions in TTIP could “weaken the rights to health, culture and
expression of U.S. and EU citizens by unfairly limiting access to knowledge and
access to medicine”. Additionally, some experts believe that, due to the
rejection by the European Parliament of ACTA, including IPRs in the talks could
jeopardize the entire deal, as many would make a connection between TTIP and
ACTA’s IP provisions. Moreover, they maintain that the differences in IP
systems between the EU and the USA are quite small, although hard to reconcile,
and in any case they do not constitute significant trade barriers (European
Parliament, 2014, p. 26-27).

Nevertheless, at the same time industry and business associations in the
EU have been calling for the inclusion of IPRs in the TTIP, which could act as
a framework for encouraging better protection of IP in third countries, as well
as innovation and technological development in the transatlantic economy (European
Parliament, 2014, p. 26).

In February 2016 the European Commission released a
document which gives an overview of the situation of the negotiations at that
time, describing the goals it aims to achieve, which, for what concerns IP
rights, are mainly the ones underlined above. The document also discusses some
controversial issues between the parties, as well as in the public opinion, and
proposes some ways to overcome them.

The first
controversial issue is the ACTA, which was rejected by the European Parliament
in 2012, reason why the EU assures that it is not willing to negotiate on rules
regarding questions such as penal enforcement and internet penal liability
already refused. Many concerns regard then the possibility of raising prices
for new pharmaceutical products, but the EU guarantees that this won’t happen
as European public health service really intends to keep on having a right
balance between innovation and keeping medicines affordable. Finally, the EU
reaffirms that the level of protection of GIs currently offered will never be
lowered (European Commission, 02/2016, pp. 46-48).

Given these elements and explanations, European
countries should be able to see the benefits which a further regulation of IPR
in international trade with the USA would give to them. The chapter included in
the TTIP should provide enhanced protection of EU geographical indications, it
will not bring back potential controversial position of ACTA, and
pharmaceutical products will still be at the same level of availability.

As a matter
of fact, a deeper regulation of IPRs with the USA should be seen as a mean to
further stimulate innovation and creativity and, finally, as a source of economic
growth.

Of course, some changes are needed in order to make
the parties more confident about the advantages of a reciprocal and mutual
regulation which goes over the extent of what has already been achieved under
the TRIPs Agreement. There is a necessity of more transparency in the talks and
of clarification about what exactly will be in the Agreement and what will not,
about how the rights will be dealt and which are the main intentions of the
agreeing parties. Only in this way will everybody understand how important and
beneficial a chapter about IP rights in such an agreement as the TTIP could be.

 

 

 

 

 

 

 

 

 

Conclusion

Innovation and creativity drive economic growth in both the EU and the
United States. They also help give consumers more choice and create jobs. Intellectual
property rights reward individuals and firms that innovate or put their
creativity to work (European Commission, 02/2016, p. 49).

Intellectual property is an issue that is here
to stay on the international trade agenda. A range of recent bilateral and
regional trade agreements contain provisions that require intellectual property
protection above that stipulated in TRIPs. Such agreements have been used by
developed countries to further increase protection beyond the TRIPs level
(Treibilcock, Howse, Eliason, 2013, p. 561).

However,
this expansion of IPRs, in multilateral and bilateral agreements, as well as to
new subject matters led mainly by developed countries, has raised a range of
concerns and opposition from developing countries, mostly concerned with
ensuring transfers of technology and access to generic medicines (European
Parliament, 2017). Nevertheless, IP rights proved to be an important potential
factor of growth for a nation, therefore many efforts have to be done to
increasingly improve their international regulation.

The Transatlantic Trade and Investment Partnership is
one of the current “key arena of political struggle” (Krisis, 2016); it
presents many controversial aspects which have raised preoccupations. Moreover,
it was inaugurated in a substantial different environment and in different
political circumstances than the ones present nowadays. After the election of
Donald Trump as President of the United States of America, talks on TTIP have
officially stopped in 2017. At the moment, the EU needs to clarify with its U.S.
counterparts if there is sufficient level of shared ambition and common ground
to resume negotiations (European Parliament, 2017).

In its
resolution of the 8th of July 2015 containing recommendations to the
European Commission on the TTIP negotiations, the European Parliament called on
the European negotiators to ensure that the TTIP includes an ambitious,
balanced and modern chapter on intellectual property rights (European Parliament,
2017). The intentions shown in the subsequent negotiations between the EU and
the USA, if correctly analyzed, demonstrate that, despite the common concerns,
the European countries would benefit from a regulation of IP rights in the
context of the TTIP. They should therefore try not to block the process of
negotiations, but instead solve those causes of concerns, such as the problem
of transparency, in order to impart the right messages about the issue.

Finally, due to increasing protectionism and
mistrust in the benefits of international trade and of mutual cooperation, we
cannot be sure about the future of the TTIP Agreement . As for intellectual
property rights, what has been achieved through the WTO regulation and the
TRIPs Agreement is important; however we still are far from a considerable and
correct regulation of one potentially substantial tool in innovation and
economic growth.