The African Group has proposed initiatives for reforming the World Trade Organization (WTO) to promote industrial development.
With the upcoming WTO’s 13th ministerial conference in February 2024, the African group aims to rebalance existing WTO rules to foster their industrial growth.
These proposals highlight six themes, with a focus on the transfer of technology and resilience building across sectors like agriculture, climate change, and e-commerce.
The group criticizes the impact of the TRIPS Agreement on the response to the COVID-19 pandemic and manufacturing capacity in developing nations, suggesting that the TRIPS Council should explore ways to promote technology that benefit both producers and users.
On trade facilitation, the group calls for reflection on the effects of digital technologies, intellectual property protections, and how they could impact the transfer of technology to developing nations. They also stress the importance of technology transfer in building agricultural resilience, considering the role of technology in revolutionizing agricultural trade in industrialized nations.
In regards to climate change, they propose a reset of the narrative, focusing on applying existing WTO rules on technology transfer to diffuse climate change technologies, including compulsory licensing.
They also want to address accessibility to source codes in the context of a secure, transparent, and trusted technology environment as part of the E-commerce work program.
The proposal aims to analyze the relationship between technology transfer and economic development, assess the role of the “flexibilities” contained in the TRIPS agreement, assess the role of technical assistance and capacity-building programs, and consider how to best enable micro, small, and medium enterprises to benefit from various technology transfer tools. The proposal, however, is a call for change and it's unclear how the African Group plans to negotiate these reforms.
The African Group has exposed the failings of the World Trade Organization’s TRIPS Agreement in combating the COVID-19 pandemic, underscoring the need for “policy space” in grappling with unaddressed issues so as to ensure mistakes are not repeated in future health emergencies, our correspondent reports.
Under the overall rubric of WTO reforms as mandated in the outcome document of the 12th Ministerial Conference last June, the African Group has brought certain fundamental issues centering on rebalancing WTO rules to the TRIPS Council negotiating table.
The African Group seems to have turned the tables on a range of issues concerning industrialization and rebalancing of rules to be decided at the WTO’s 13th ministerial conference to be held in Abu Dhabi, in February 2024.
In a proposal titled, “The Role of Transfer of Technology in Resilience Building: the TRIPS Agreement,” and circulated on July 3 (WT/GC/W/884), the African Group says “existing mechanisms of technology transfer have not adequately boosted the productive capacities of developing countries in a broad-based fashion.”
The African Group is raising bread-and-butter issues concerning "Policy space for industrial development.”
The group – comprising more than 50 countries – is seeking “rebalancing trade rules to promote industrialization and to address emerging challenges such as climate change, the concentration of production and digital industrialization.”
The African Group tabled submissions “on Agreement-specific issues as pertain to industrial development in general, including the role, towards that end, of transfer of technology and trade.”
The group issued a strong message that the failure to boost the productive capacities of the countries in the region is one of the telling phenomena of COVID-19, creating more problems for African countries during the past three years. “This is particularly true of African countries which severely hampered the continent's ability to respond to the COVID-19 pandemic and other health emergencies, as well as other pressing challenges such as food insecurity and the impact of climate change.”
Technology Transfer
“Shortcomings of existing mechanisms for technology transfer include, among others: restrictive contractual terms in licensing agreements; information asymmetries related to R&D and pricing; and market concentration,” the African Group says in its proposal.
Further, “Pricing strategies are based on determinants such as inter alia the cost of R&D, costs of production or financial returns to incentivize future R&D programs,” the AG maintained.
It draws attention to the “true costs of R&D, especially for pharmaceuticals are often unknown and highly variable, while the contribution made by public and non-profit-making sectors is not always accounted for.”
Worse still, “the lack of transparency in the true cost of technologies, how public funding is taken into account and determinants of the market price contributes to concerns about inaccessibility of key technologies, especially those that contribute to the global commons,” it argues.
It is time that WTO members “engage on the role of the private sector and mechanisms that need to be put in place to ensure better accountability by the private sector in relation to technology transfer, especially in promoting affordable access to key technologies required to address global commons such as public health and green technologies to fight climate change.”
Key Objective
The key objective of the discussions should enable countries in Africa to “harness the potential of WTO instruments to render technologies accessible and affordable on fair and reasonable terms,” according to the proposal.
It suggests discussions on “reinvigoration” need to be centered around the following issues and questions, proposing that “each theme or sub-theme will be thoroughly analyzed and discussed among Members, with a view to making recommendations to Trade Ministers for adoption at MC13.”
It urged members to discuss the following issues in the TRIPS Council:
a. How have the flexibilities contained in the TRIPS Agreement contributed to technology transfer to developing countries and in particular to LDCs? How many developed countries have allowed for compulsory licensing in their national legislations?
b. In light of the Paragraph 6 system, following the Doha Declaration on TRIPS and Public Health, how have member countries addressed the problem of countries with insufficient or no manufacturing capacities in the pharmaceutical sector?
c. How have compulsory licensing and the Paragraph 6 system contributed to the issue of technology transfer in the pharmaceutical sector?
d. What kind of flexibilities are needed to promote the transfer of technology in the industrial sector more generally, and in particular for the benefit of Small and Medium Sized Enterprises in developing countries, including LDCs?
e. How can TRIPS provisions be utilized to boost industrial development and productive capacities?
f. What kind of flexibilities are required, and which TRIPS provisions are relevant to support climate change mitigation and adaptation efforts, green industrialization, and integration of developing countries, including LDCs in global value chains in the green economy?
g. How can existing mechanisms of technology transfer be improved within the context of the multilateral trading system and the TRIPS Agreement in particular to ensure equitable and affordable access?
h. The participation of developing countries in R&D takes many forms, including clinical trials – how can this be leveraged to ensure better terms of accessibility and affordability to medical products from this contribution?
i. What are the mechanisms that can be put in place to encourage greater transparency on the true cost of R&D with a view to ensuring affordable access to key technologies?
In short, the African Group posed some difficult issues to be addressed in the run-up to the WTO’s 13th ministerial conference. It remains to be seen whether industrialized countries will address the above issues with a degree of sincerity, said a trade negotiator who asked not to be quoted.
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