The least developed country Members of the WTO represent the poorest and weakest segment of the international community. The economies of least developed country Members are extremely vulnerable, with large segments of their population living in poverty. They also face numerous challenges such as high burdens of infectious and non-infectious disease, low literacy, and inadequate access to clean water and sanitation, low agricultural productivity, environmental and climate-related challenges.
In 2003 when the TRIPS Agreement of the World Trade Organization (WTO) came into force, the Least Developed Countries (LDCs) were allowed an exemption for 10 years on the obligations of the TRIPS Agreement regarding the intellectual property rights, among others the obligation of providing patents on medicines. This was done in order to respect the special needs and requirements of these countries, so that their economic, financial and administrative development would not be hindered and to allow them certain flexibility to create a viable technological base.
The marginalisation of LDCs is in many ways worse than in the early 1970s. These countries have not been able to develop their productive capacities and have not beneficially integrated with the world economy. Their role in the world economy is very marginal, and their integration in the global market has been very limited. As the situation of LDCs has not changed significantly since the time the TRIPS exemption was decided, and the LDCs exemption comes to an end 1 July 2013, Haiti, on behalf of the LDCs, has submitted a request to the WTO TRIPS Council for an extension period to comply with the TRIPS Agreement “for as long as the country remains a least developed country”.
Other reasons put forward for Haiti for the exemption to be “indefinite” is that the Least developed countries’ productive capacity is limited. They have serious infrastructure deficits and are lagging behind in critical areas, which are key drivers for transformation and the development of least developed countries. They continue to face serious economic, financial and administrative constraints and need maximum flexibility to create a sound and viable technological base. Developing a viable technological base is a long-term process. Given the increasing complexity of modern industrial practices, least developed country Members need a continuing waiver from TRIPS in order to be able to grow economically viable industrial and technological sectors, to consolidate capacity, and to work their way up the technological value chain. Because of their extreme poverty, least developed countries need the policy space to access various technologies, educational resources, and other tools necessary for development. Most Intellectual Property protected commodities are simply priced beyond the purchasing power of least developed country Members and their nationals.
The proposed draft TRIPS Council decision on the extension of the transition period for LDCs, is as follows: “The Council for Trade-Related Aspects of Intellectual Property Rights (the “Council for TRIPS”), Decides as follows: “Least developed country Members shall not be required to apply the provisions of the Agreement, other than Articles 3, 4 and 5, until they cease to be a least developed country Member.” This draft will be confirmed or refused in March 2013 at Geneva.