GDAE Working Paper No. 09-01 Resources, Rules and International Political Economy
In the period since the conclusion of the Uruguay Round and the establishment of
the WTO, the North-South conflict over IP has been most intense as regards access to
essential medicines.17 The reason for this is that there remained substantial uncertainty
regarding just what measures countries were and were not allowed to take with regard to
compulsory licenses and parallel imports, legal uncertainty that was exacerbated and
compounded by developing countries facing considerable political pressure to exceed
their new obligations in the area of IP. The principal source of pressure came from the
US, which demanded accelerated implementation of TRIPS obligations (i.e. forego
transition periods allowed by TRIPS) and discouraged countries from utilizing policy
prerogatives (i.e. forego policy measures allowed by TRIPS). The “TRIPS Plus”
campaign is illustrated by considering the treatment of developing countries in the
USTR’s annual Special 301 Reports on IPRs. Throughout the 1990s, developing
countries were routinely placed on the Watch List and Priority Watch List for what the
U.S. regarded as “insufficient” protection of intellectual property. In the seven years after
the WTO entered into effect, more than half of the countries subject to this pressure were
developing countries. Developing countries also accounted for nearly two-thirds of the
countries identified on the Priority Watch List. Developing countries often found
themselves under threat even when they were behaving in compliance with the Uruguay
Round’s IPR obligations. In pursuit of higher standards of intellectual property
protection, the USTR singled out countries that were in compliance with TRIPS but that,
in taking advantage of the agreement’s flexibilities, had introduced IPR regimes that the
U.S. deemed objectionable. Thus, developing countries often found themselves subject to
penalties not for violating TRIPS or even for being too slow in making their IPR regimes
TRIPS-compliant, but rather for using the flexibility that TRIPS formally permits —for
not adapting “TRIPS Plus” regimes.
The focal point of the North-South conflict over IP was over compulsory licenses
for essential drugs. A compulsory license allows a public or private actor to use patented
knowledge without the authorization of the owner.18 Although TRIPS places conditions
on countries’ ability to issue compulsory licenses, conditions that, as indicated above, are
more restrictive than pre-Uruguay Round rules, the agreement does not prohibit the use
of CLs. But external pressures certainly discouraged developing countries from taking
TRIPS-acceptable measures. Many of the countries included on the USTR’s Special 301
lists, for example, were there because of the provisions in their IPR legislation regarding
compulsory licenses. And because the US and the major pharmaceutical companies
expressed disapproval of the use of flexibilities, countries that took advantage of their
rights under TRIPS feared retaliation.19 Ultimately, this strong opposition to the use of
CLs, and prominent statements regarding their alleged illegality, cast a shadow of doubt
and uncertainty over an issue that is already marked by high levels of legal complexity.
Indeed, as one developing country representative noted, the challenges presented by CLs’
legal complexity was greatly exacerbated by external pressures and the uncertainty as to
what falls outside of TRIPS.20
Vulnerability to external pressures prompted developing countries to seek real,
and not just formal, flexibilities in IP policy. Developing countries, thus, launched a
campaign to secure political space to take advantage of their rights under the