TRIPS vs GATT

TRIPS vs GATT

Introduction

This paper provides a comparison of special and differential rights available to developing countries in connection with the Trade Related Intellectual Property Rights, (TRIPS) and the General Agreement on Trade and Tariffs, (GATT).

The purpose of GATT was to reverse protectionist measures that had existed since the early 1930s. Following World War II, conventional wisdom held that the cause of the Great Depression of the 1930s was a decline of world trade that brought about irresponsible trade and monetary policies. Seeking to ensure a favorable balance of trade, nations frequently devalued their currencies to make their own goods cheaper in other countries, thus increasing exports.

One of the more pressing issues negotiated at Doha involved trade-related aspects of intellectual property rights (TRIPS). The stated goal of the declaration was to allow access to existing medicines and to encourage the development of new pharmaceutical drugs to improve public health in developing nations. These countries lobbied for relaxed rules on pharmaceutical inventions from developed nations. Building on talks held at the Uruguay Round, Third World nations demanded greater access to essential medicine to deal with epidemics such as AIDS. This accessibility involved offering lower-priced generic drugs to countries unable to solve public health crises. Demonstrating the grand importance placed on this issue, the ministers at Doha created a separate declaration on TRIPS.

Discussion

International trade law represents the need to balance two competing interests: (1) the protection of local industries from harm by foreign competitors, and (2) the encouragement of trade across national borders. Since the 1990s, there has been a shift toward freer international trade. However, restrictive trade devices that impede or distort trade still create problems in the international trade of goods, services, intellectual property, and investment.

The most common devices used to restrict trade are tariff barriers, such as import duties and export duties, and non-tariff trade barriers (NTBs), such as import quotas; import licensing procedures; safety, environmental, and other minimum manufacturing standards; import testing requirements; complex customs procedures (including valuation); government procurement policies; and government subsidies.

The General Agreement on Tariffs and Trade (GATT), now replaced by the World Trade Organization (WTO), was an international trade agreement created in 1945. Through GATT, numerous countries sought ways of promoting international trade and making it freer. Today, the GATT 1947 Agreement has been superseded by the substantially similar GATT 1994 Agreement, which is part of the WTO package of trade agreements that took effect in 1995.

The Core Principles of GATT

One of the core provisions of both GATT 1947 and GATT 1994 is article I, which requires each contracting party to accord unconditional MFN status to all other contracting parties. Thus, any privilege granted by any contracting party to any product imported from any other country (WTO member or not) must also be “immediately and unconditionally” granted to any “like product” imported from any other contracting party.

GATT article III requires, with some exceptions, that “national treatment” be given to imported goods. Thus, goods imported from any contracting state must be treated in the same ...