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Impact of WTO “Plus” and “Extra” Issues on Developing Countries
Name- Matchima Borrisutphongsakul
Mastertrack – International Trade and Investment Law
Name of supervisor - Dr. J.H. (James) Mathis
Date of submission – 6th July 2018
Abstract
Even though the Trans-Pacific Partnership (TPP) agreement has been withdrawn by the
United States, its impact, coupled with the recent Preferential Trade Agreements (PTAs)
between the European Union (EU) and the US, has been cause for anxiety in developing
countries when negotiating a PTA with the EU and the US. This is because these new PTAs
are more comprehensive and complex than the older ones, in addition to having a deeper
integration and being more detailed, in the light of border coverage. Scholars call this “deep
integration”. The sectorial coverage of deep agreement is further divided into two groups:
“WTO Plus”, which relates to the existing provisions under the World Trade Organization
(WTO) but has deeper commitments, and “WTO Extra”. The WTO Extra’s provisions fall
outside the scope of the WTO. The recent PTAs can be negotiated between developed and
developing countries with different stages of economic development since they go beyond the
reduction of tariffs to include topics outside the commitment in the WTO agreement. As a
result, developing countries are likely to be impacted by these PTAs. However, if the country
decides to gain more preferential market access to the big import and export countries such as
the US and the EU, they cannot avoid negotiating PTAs.
The first part of this thesis compares the PTAs of the US and the EU with developing
countries. It also attempts an explanation of WTO “Plus” and “Extra”. In order to allow a
more in-depth understanding of these policies, the second section compares three provisions,
i.e., Intellectual Property (“WTO Plus” and “WTO Extra”), Competition Policy (“WTO
Extra”), and Environmental Law (“WTO Extra”) between the US (the free trade agreement
between the US and Singapore and the TPP, wherein Vietnam is part of the TPP’s party) and
the EU’s PTAs (FTAs between the EU and Singapore and the EU and Vietnam). These are
the three most controversial topics in developing countries. Non-governmental organizations
(NGOs) place a lot of importance to these issues since they seem to directly affect the citizens
of developing countries, claiming that the Intellectual Property and Competition Policy
chapters hinder the competitiveness of domestic companies in the market. Moreover, the
Intellectual Property provision may have a detrimental effect on the accession of essential
pharmaceuticals. The Environment chapter may also affect the rights of agricultural
producers in developing countries. The third section analyses the impact of the “WTO Plus”
and “WTO Extra” provisions on developing countries. The fourth and concluding section
offers suggestions in negotiating these provisions to developing countries.
Table of Contents
Introduction ................................................................................................................................ 1
WTO “Plus” and WTO “Extra” issues ...................................................................................... 4
The WTO “Plus” and WTO “Extra” in the US and the EU regimes: Similarity and Difference
.................................................................................................................................................... 7
Intellectual Property Rights (IPRs) ........................................................................................ 7
Competition Policy (CP) ...................................................................................................... 14
Environment ......................................................................................................................... 22
Section Conclusion ............................................................................................................... 26
Impact of the WTO Plus and Extra on developing countries .................................................. 27
Intellectual Property Rights (IPRs) ...................................................................................... 27
Competition Policy (CP) ...................................................................................................... 30
Environment ......................................................................................................................... 33
Section Conclusion ............................................................................................................... 35
Conclusion ............................................................................................................................... 36
1
Introduction
The WTO’s 2011 report on the WTO and preferential trade agreements shows that 300 PTAs
were entered into force1, where all members of the WTO are party to at least one PTA
2.
PTAs include reciprocal preferential agreements in bilateral, multilateral or regional
agreements, and may be created in the form of a free trade agreement (FTA). It has to be
noted that PTAs were introduced before the establishment of the General Agreement on
Tariff and Trade in 1947. Before the creation of the WTO, countries secured and
strengthened their trade relations in various ways, such as through colonial preferential
agreements and bilateral commercial treaties, in order to achieve more openness and
liberalization in trade.
The General Agreement on Tariffs and Trade 1994 (GATT) obliges members of the WTO to
comply with the basic framework of the WTO, which is non-discrimination. The non-
discrimination rule relating to PTAs is stated in Article I of the GATT (Most-Favoured-
Nation Treatment; MFN), which requires members to not provide differential treatment,
favouring some countries’ like products over those of other contracting parties. However, the
WTO allows members from the PTAs deeper integration than the WTO itself.
The formation of PTAs has to fall under specific conditions under WTO agreements, i.e.,
Article XXIV of GATT 1994 (GATT), Article V of (General Agreement on Trade in
Services (GATS), and the Enabling clause. Under Article XXIV of GATT, the parties of
these PTAs can justify a violation of Article I. It also allows member parties of the WTO to
negotiate an FTA or customs union among parties to increase elimination of trade
restrictiveness. The parties of the FTA or customs union will have access to more favourable
advantages than third parties. However, if challenged, the members of the FTAs or customs
union need to prove that the provisions of the GATT make impossible the formation of a
customs union or an FTA3. In the Turkey-Restrictions on Imports of Textile and Clothing
Products case, the Appellate Body states the following:
two conditions must be fulfilled for invoking Article XXIV as a defence. First, the
party claiming the benefit of this defence must demonstrate that the measure at issue
is introduced upon the formation of a customs union that fully meets the requirements
1 World Trade Organization, The WTO and preferential trade agreements: From co-existence to coherence, (World Trade
Report, 2011) 47. 2 Ibis 42.
3 Turkey: Restrictions on Imports of Textile and Clothing Products-Report of Appellate Body (22 October 1999)
WT/DS34/AB/R.
2
of Sub-paragraph 8(a) and 5(a) of Article XXIV. Second, the party must demonstrate
that the formation of that custom union would be prevented if it were not allowed to
introduce the measure at issue.4
According to Article XXIV:8(a), a customs union indicates preferential treatment for a
specific country. Thus, two countries eliminate duties and ORRCs on substantially all trade
and have the same duties and regulations imposed on a third country. According to Article
XXIV:8(b), an FTA has only an internal preferential policy between its members, but no
external component. As per Article V of GATS, this provides the conclusion of PTAs in the
area of trade in services which seem similar to Article XXIV of GATT. However, there are
some differences. Article V.1 of GATS states that a PTA has substantial sectorial coverage
and Article V.4 of GATS requires that PTA members cannot raise the overall level of barriers
against non-members. The enabling clause, such as the 1979 Decision on Differential and
More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries,
allows the establishment of PTAs in trade in goods between developing member countries.
Although the WTO was created to reduce trade barriers between countries, members continue
to use specific conditions under the WTO agreements to create PTAs between them in order
to deepen economic integration. This deeper integration occurs because members require
increased trade openness to promote trade in certain sectors, and more broadly, to allow for
economic integration5 or deep agreements. These deep agreements occur throughout the
world, between developed countries, developing countries, and between developed and
developing countries. Moreover, most current PTAs go beyond elimination and reduction of
tariff, covering issues affecting domestic regulation (or behind-the-border measures) of the
parties of PTAs, including services, investment, intellectual property protection, competition
policy, environmental laws, government procurement, labour, and so on. These issues, called
“WTO Plus” and/or “WTO Extra”, require change or amendment of the domestic regulation
for compliance; thus, veto players argue that a country, specifically a developing country,
should not enter into such PTAs, resulting in less ratification for these PTAs6.
It cannot be denied that there is a significant gap in the trade competitiveness between
developed and developing countries. It seems that deep PTAs force equal rules on unequal
4 Ibis, para. 58
5 World Trade Organization (n.1) 44.
6 Ibid, 96.
3
partners7. As a result, negotiating the deep PTA might adversely affect developing countries.
The three topics under the deep PTAs, namely competition policy, intellectual property and
environment, are cause for controversy in some developing countries that have weak
regulation and enforcement in these areas. Moreover, these issues are relatively novel, and
the high standards of developed countries are imposed on developing countries. The veto
powers in developing countries are primarily concerned about Intellectual Property Rights
issues, since they are directly related to access to essential medicine. Stricter obligations
under the Intellectual Property Rights issue may result in pharmaceutical products becoming
more expensive and thus, not easily accessible to all citizens. Furthermore, Veto powers try
to influence a government’s stand on competition policy areas, including state-owned
enterprises, because they think that a competition policy could result in government
pharmaceutical producers being banned from manufacturing essential medicines. The veto
powers have also begun focusing on environmental laws in recent PTAs. They claim that
these laws will pose difficulties to farmers and agricultural producers in developing countries.
Furthermore, the veto powers consider these three aspects to be related, resulting in
undermining the competitiveness of domestic companies in developing countries8.
This thesis will study the selected deep PTAs and estimate the impact of the aforementioned
three chapters on developing countries. Thus, the first section of this thesis will elaborate on
the WTO Plus and WTO Extra issues. The second section will compare the US and the EU’s
WTO Plus and Extra provisions with the standards of the WTO agreement. In order to
compare EU and US PTAs and discuss their impact on developing countries, this paper
examines those PTAs negotiated between those two regions with developing countries. The
selected PTAs negotiated by the US are the Trans-Pacific Partnership (TPP) Agreement (of
which developing countries such as Vietnam are parties) and the FTA between US and
Singapore. The selected PTAs negotiated by the EU are the FTA between EU and Singapore
and FTA between the EU and Vietnam (which is poised to conclude in 2018). The TPP is
selected because it is the newest PTA of the US as same as the EU-Vietnam FTA for the EU.
Singapore’s FTAs are selected because Singapore is a valuable example of an advanced
developing country. Singapore seems to have high standards of domestic regulations and a
high-income economy9. Following this evaluation, the third part of this paper will analyse
7 Rick Rowden, ‘9 ways the TPP is Bad for Developing Countries’ (Foreign Policy Magazine, 7 July 2015)
<http://foreignpolicy.com/2015/07/07/9-ways-the-tpp-is-bad-for-developing-countries/> accessed 15 May 2018. 8 ibid.
9 The World Bank In Singapore, ‘The World Bank In Singapore’ (The World Bank, 19 April 2018) <
http://www.worldbank.org/en/country/singapore/overview> accessed 18 June 2018.
4
and deduce the impact of such WTO Plus and Extra provisions on developing countries. In
conclusion, the thesis will provide suggestions where developing countries need to negotiate
WTO Plus and Extra issues.
WTO “Plus” and WTO “Extra” issues
According to the World Trade Report 2011, the number of PTAs has been on a continuous
increase. In 2010, 300 PTAs were enforced, both developed and developing countries
participating in the enlargement of the number of PTAs. The report also claims that 75 per
cent of notified PTAs are the result of agreements between developing and developing
countries (south-south agreements) and 25 per cent are the result of agreement between
developing and developed countries (south-north agreements). This shows that developing
countries are showing increased participation in world trade and are more concerned with
preferential trading relationship over the unilateral preferential tariffs provided by developed
countries (Generalized System of Preferences; GSP).
The scope of recent PTAs focuses on deeper integration rather than reduction of tariffs. Old
PTAs or PTAs before the establishment of the WTO focused primarily on border measures
since, at the time, applied tariffs between countries were quite high. Before the WTO, the
average tariffs among countries were between 20 to 30 per cent10
. This type of PTA is called
a “simple agreement”. However, after the establishment of the WTO, the provisions in the
GATT oblige members to include more trade liberalization such as non-discrimination, and
transparency. The obligations under the GATT reduced the applied border tariff between
members to a mere 4 per cent in 200911
. Thus, the scope of exchanging preferential border
measure is unlikely to be extensive. The recent trade agreements, called “deep agreements”,
focus on domestic policies that fall inside the border. The deep agreements have a wide
scope, but they can be largely divided into two dimensions12
. The first dimension is the
extensive margin which refers to the coverage of an agreement beyond the reduction of
tariffs, such as the harmonization of national regulations. The second dimension is the
intensive margin, which focuses on the institutional depth of an agreement, such as the
formation of customs or monetary union.
10
World Trade Organization (n.1), 124. 11
Ibid. 12
Ibid, 110.
5
As discussed above, tariffs are no longer a priority when negotiating recent PTAs. There are
claims that the new PTAs signed by the US and the EU go beyond the WTO agreements13
.
Mavroidis and Sapir examined the EU and the US’s PTAs and came up with ways to identify
policy areas in such PTAs. They found that there are 52 policy areas in such agreements,
which can be further divided into two groups. The first group is called the “WTO Plus”,
which includes policy areas that fall under the current WTO commitments and are already
subjected to a form of obligation in WTO agreement. However, they are more detailed and
have more binding provisions than the WTO. The second group is the “WTO Extra”, which
includes provisions outside the WTO regime. The table below lists the 52 policy areas as they
fall within WTO Plus or WTO Extra.
Table 1: WTO “Plus” and WTO “Extra” policy areas in PTAs
WTO “Plus” WTO “Extra”
PTA industrial goods PTA agricultural goods Customs administration Export taxes SPS measures State trading enterprises Technical barriers to trade Countervailing measures Anti-dumping State aid Public procurement TRIMS measures GATS TRIPS
Anti-corruption Health Competition policy Human rights Environmental laws Illegal immigration IPR Illicit drugs Investment measures Industrial cooperation Labour market regulation Information society Movement of capital Mining Consumer protection Money laundering Data protection Nuclear safety Agriculture Political dialogue Approximation of legislation Public administration Audiovisual Regional cooperation Civil protection Research and technology Innovation policies SMEs Cultural cooperation Social matters
13
Henrik Horn, Petro C. Mavroidis and Andre Sapir, ‘Beyond the WTO? : An Anatomy of EU and US Preferential Trade Agreements’ [2009] The World Economy 1565.
6
Economic policy dialogue Statistics Education and training Taxation Energy Terrorism Financial assistance Visa and asylum
Source: Horn et al. (2010)
Since 1958, the average number of PTAs, which include WTO Plus issues between
developing countries and developed countries, has been increasing. Moreover, the PTAs of
developing countries and developed countries which came into force since 2000 cover more
WTO Extra provisions than previous PTAs14
. However, it is noticeable that although the
WTO Plus provisions have become legally enforceable in developing countries, the WTO
Extra is yet to find legal enforceability. The reason behind this is that developing countries
have higher barriers in goods and services than developed countries. Hence, developed
countries may decide to use a PTA with WTO Plus provisions as a tool to obtain a deeper
level of commitments than those established in the WTO. Developed countries might provide
a fuller and greater security on market access in their countries in exchange for obtaining a
deeper level of commitments. Apart from that, because WTO Plus provisions have already
been stated in the WTO agreements, it is easier for developing countries to adopt the WTO
Plus in their legal regime. In contrast, the WTO Extra seems more difficult to enforce in
developing countries. Although some developing countries such as Singapore, Chile and the
Republic of Korea are willing to negotiate these areas, others do not have the proper domestic
legislations in place. As a result, it appears that developed countries are unilaterally seeking
to export their regulatory regime to developing countries. However, some of these WTO
Extra regimes, such as competition policy, intellectual property rights, investment, and the
movement of capital, are of interest to developing countries that wish to encourage investors
to invest in their countries15
. Thus, it would be better to enforce these areas in developing
countries.
14
Ibid, 131. 15
David Hindman, ‘The Effect of Intellectual Property Regimes on Foreign Investments in Developing Economies’ [2006]
Arizona Journal of International & Comparative Law 467.
7
The WTO “Plus” and WTO “Extra” in the US and the EU regimes:
Similarity and Difference
The WTO “Plus” and WTO “Extra” provisions mostly appear in the US and the EU’s PTAs.
Some researchers are of the view that developed countries (i.e., the US and the EU) export
their regulations to developing countries when negotiating a PTA. Consequently, this section
focuses on the following issues: Intellectual Property Rights and Competition Policy and
Environment chapters in EU and US PTAs to compare the similarities and differences
between both regimes and compare them with WTO Agreement obligations. These issues
have been chosen because veto powers in developing countries normally protest the joining
of PTAs with the EU and the US, claiming that these chapters link together and have a
negative impact on developing countries. The Intellectual Property and Competition Policy
chapters hinder the competitiveness of domestic companies in local markets. Moreover, the
Intellectual Property provision may have a detrimental effect on the accession of essential
pharmaceuticals. The Environment chapter may also affect the rights of agricultural
producers in developing countries16
. The third section analyses the impact of the “WTO Plus”
and “WTO Extra” provisions on developing countries. Thus, the selected US PTAs (TPP and
FTA between US and Singapore) and EU PTAs (FTAs between EU and Singapore and
between EU and Vietnam) are examined.
Intellectual Property Rights (IPRs)
Developed countries seek to establish IPR protection rules under a PTA because their market
access in IP-related products are reduced in developing countries with a weak IP protection
regulation.17
Thus, developed countries strive to standardize the level of IP protection that
may be different between the parties18
. IPR provisions are the concern of both the WTO Plus
and WTO Extra. WTO agreements contain Trade-Related Aspects of Intellectual Property
(TRIPS) Agreement, and the provision in some of the new PTAs reaffirms the TRIPS
agreement, i.e., harmonization of standards, enforcement, national treatment, and most-
16
FTA Watch, ‘Fighting FTAs: the experience in Thailand’ (bilaterals.org, October 2007) <
https://www.bilaterals.org/?fighting-ftas-the-experience-in&lang=en> accessed 18 June 2018.
See Also Pratch Rujivanarom, ‘Activists sound alarm over trade deal’ The Nation (13 June 2018) <
https://www.bilaterals.org/?activists-sound-alarm-over-trade&lang=en> accessed on 18 June 2018.
17 Enrique Valerdi Rodriguez, ‘The European Union Free Trade Agreement: Implications for Developing Countries’ [2009]
Real Instiuto Elcano 1. 18
Meir P. Pugatch, ‘A Transatlantic Divide? The US and EU’s Approach to the International Regulation of Intellectual Property Trade-Related Agreements’ [2007] Ecipe Working Papers 1.
8
favoured nation treatment. However, the PTAs may consider the obligations under the TRIPS
agreement unsuitable for their IP protection, hence negotiating an obligation, resulting in the
TRIPS “Plus”. Moreover, IP protection obligations under the deep PTAs may also be
categorized in the WTO “Extra” group at times, since, in some PTAs, the IPRs chapter refers
to other international agreements that are not included in the TRIPS agreement19
which
oblige parties of the PTAs to provide IP protection that is not stated in the TRIPS agreement.
There are three major areas of IPRs that changed considerably when they became WTO Plus
or Extra provisions. The first area is copyrights: both the US and EU’s PTAs increase the
level of copyrights protection by strengthening the ability of copyrights holders to prevent
others from using their works. The US’s PTA tends to extend the period of copyrights
protection as long as the period stated in US domestic law20
. The EU, on the other hand,
refers to multilateral agreements such as the WIPO Copyrights Treaty of 199621
. The second
area is trademarks: the US and the EU decide to have a higher level of trademarks protection
than provided in the TRIPS Agreement. However, they use a different regime in order to
reach their goal. The US expands the types of marks, such as scent marks, that can be
registered as trademarks, as well as the period of protection, whereas the EU refers to
multilateral treaties to provide a higher level of protection22
. The last and most complex area
is patents, particularly pharmaceutical. Both the US and EU’s PTAs allow a longer period of
patent protection when there is an unreasonable delay in the process of granting patents or in
the process of authorizing patents for market use23
. Furthermore, they include data
exclusivity in the PTAs aimed at protecting and safeguarding the data of registered
pharmaceutical products. Data exclusivity is a very controversial issue. Some scholars think
that it will encourage inventors to produce new pharmaceutical products; others argue that it
will create a monopoly and lead to very expensive medicines. The US-led PTAs adopt the
period of protection under Section 355 of the Federal Food Drug and Cosmetic Act of 1997,
which allows a five-year period for new drugs and three years for new indication of existing
drugs24
. On the other hand, the EU domestic regulation (Directive 2001/83/EC) provides a
ten-year protection period for data exclusivity, but the EU-led PTAs do not adopt this regime.
According to the selected PTAs, legal differences between the TRIPS regime, the EU regime,
19
Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10) 1579. 20
Meir P. Pugatch (n 12) 17. 21
Ibid. 22
Ibid, 18-19. 23
Ibid. 16. 24
Ibid, 14.
9
and the US regime can be found, as listed in the table below. In order to not delve into too
much detail and stay within the limits of this thesis, Table 2 compares only the important
provisions of patent and plant variety protection, since these areas relate to access to
medicines, which has the highest impact on developing countries.
Table 2: Differences between TRIPS and TRIPS-Plus and TRIPS-Extra in the light of
patents protection under selected US and EU PTAs
The TRIPS
Agreement
The US’s IP protection regime The EU’s IP protection Regime
US-Singapore
FTA25
TPP26
EU-Singapore
FTA27
EU-Vietnam
FTA28
Scope Copyrights,
Trademarks, GIs,
Industrial
Designs, Patents,
Layout-Designs of
Integrated Circuit,
Undisclosed
information
All IP scope
under TRIPS,
including
specific
provisions on
data protection
and plant
variety rights.
All IP scope
under TRIPS,
including specific
provisions on
data protection
and plant variety
rights.
All IP scope under
TRIPS, including
specific provisions
on data
protection and
plant variety
rights. (Article
11.2)
All IP scope
under TRIPS,
including specific
provisions on
data protection
and plant variety
rights. (Article 2)
Patents Protects any
inventions that
are new,
innovative, and
capable of
industrial
application.
(Article 27)
Provides exclusive
rights to prevent
third parties from
making, using,
processing,
selling, offering
for sale, or import
patented
products. (Article
28)
Protects any
invention,
whether a
product or a
process, in all
fields of
technology,
provided that
the invention is
new, innovative,
and is capable
of industrial
application
(Article 16.7).
Parties have to
ratify or accede
to the Patent
Cooperation
Protects a
product or
process in all
fields of
technology,
provided that the
invention is new,
innovative, and is
capable of
industrial
application.
Moreover, parties
shall accept
patents that are
available for
inventions
claimed as at
least one of the
following: new
Parties have to
comply with the
obligations under
the Patent
Cooperation
Treaty and make
reasonable
efforts to comply
with Article 1 to
Article 16 of the
Patent Law Treaty
in a manner
consistent with
their domestic
law and
procedures.
(Article 11.29)
Parties have to
Parties affirm
their rights and
obligations
under the
Patent Co-
operation
Treaty and shall
simplify and
develop its
patent
registration
procedures
using the Patent
Law Treaty,
inter alia, as a
reference point.
(Article 8.3)
According to
25
Free Trade Agreement between US and Singapore, concluded on 15 January 2003 < https://ustr.gov/trade-agreements/free-trade-agreements/singapore-fta/final-text> assessed on 17 April 2018. 26
Trans-Pacific Partnership Agreement (TPP) < https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/tpp-full-text> assessed on 17 April 2018. 27
Free Trade Agreement between EU and Singapore, Authentic text as of May 2015 < http://trade.ec.europa.eu/doclib/press/index.cfm?id=961> assessed on 30 April 2018. 28
Free Trade Agreement between EU and Vietnam, Agreed text as of January 2016 < http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437> assessed on 30 April 2018.
10
Allows third-party
use without
authorization by
the right holder in
some situations.
(Article 31)
Term of
protection is 20
years from the
filing date.
(Article 33)
Treaty (1984)
(Article 16.1).
When there is
an
unreasonable
delay in the
process of
registration,
parties shall
extend the term
of a patent to
compensate the
patent owners.
(Article 16.7)
uses of a known
product, new
methods of using
a known product,
or new processes
of using a known
product. (Article
18.37)
Parties have
ratified or
acceded to the
following
agreements:
(1) The Budapest
Treaty on the
International
Recognition of
the Deposit of
Microorganisms
for the Purposes
of Patent
Procedure (1977),
as amended on
September 26,
1980.
(2) The Patent
Cooperation
Treaty, as
amended
September 28,
1979. (Article 2)
If there are
unreasonable
delays in a party’s
issuance of
patents, that
party shall
provide the
means to, and at
the request of the
patent owner,
shall adjust the
term of the
patent to
compensate for
such delays.
(Article 18.46)
make available an
extension of the
duration of the
rights conferred
by patent
protection to
compensate the
patent owner for
reduction in the
effective patent
life as a result of
the
administrative
marketing
approval process.
(Article 11.31)
pharmaceutical
products,
parties shall
provide for an
adequate and
effective
mechanism to
compensate the
patent owner
for reduction in
the effective
patent life
resulting from
unreasonable
delays in the
granting of first
marketing
authorization in
the respective
territories.
(Article 8.3)
11
Data
Protection
Requires that
WTO members
protect
undisclosed test
data against
unfair commercial
use, but does not
state how long to
protect.
Parties have to
protect
information to
market for a
period of at
least five years
from the date of
approval for a
pharmaceutical
product and ten
years from the
date of approval
for an
agricultural
chemical
product. (Article
16.8)
Parties have to
protect data to
market for at
least ten years
from the date of
marketing
approval of the
new agricultural
chemical product
in the territory of
the Party. (Article
18.47)
Parties have to
protect:
(i) information; or
(ii) the marketing
approval granted
to the person that
submitted such
information,
for at least five
years from the
date of marketing
approval of the
new
pharmaceutical
product in the
territory of the
party.
(Article 18.50)
Parties have to
protect Test Data
Submitted to
Obtain an
Administrative
Marketing
Approval to put a
Pharmaceutical
Product on the
Market at least
five years from
the date of
approval (Article
11.33) and a
period of at least
ten years from
the date of
approval for Test
Data Submitted
to Obtain an
Administrative
Marketing
Approval to put
an Agricultural
Chemical Product
on the Market.
(Article 11.34)
Parties shall
protect
confidential
information and
data submitted
to the
government or
governmental
agencies for at
least five years
from the date
on which the
Party granted
approval to the
person that
produced the
data for
approval to
market its
product. (Article
9)
Plant
Variety
Requires WTO
Members to
protect new plant
varieties using
patent rights, a
sui generis
system, or some
combination
thereof. (Article
27)
Parties needs to
ratify or accede
to the UPOV
Convention
1991. (Article
16.1)
Parties have to
ratify or accede
the International
Convention for
the Protection of
New Varieties of
Plants, as revised
at Geneva, March
19, 1991. (Article
2)
Parties have to
comply with their
obligations under
the International
Convention for
the Protection of
New Varieties of
Plants. (Article
11.35)
Parties shall
protect plant
varieties rights
in accordance
with the
International
Convention for
the Protection
of New
Varieties of
Plants (UPOV)
as lastly revised
in Geneva on
March 19, 1991,
(also known as
the “1991 UPOV
ACT”). (Article
11)
Procedural Members must Parties shall Parties shall Parties have to Parties reaffirm
12
obligations provide Civil and
Administrative
procedures and
remedies
concerning the
enforcement of IP
rights and also
provide the
border measures
to prevent the
release of
infringement IP-
related products.
(Part III)
ensure that
they have fair
and transparent
judicial and
administrative
proceedings for
the
enforcement of
intellectual
property rights.
(Article 16.9)
Parties have to
adopt and
reasonably
implement a
policy to
prevent the
release of
infringement IP-
related
products in the
area of border
measures.
(Article 16.9)
endeavour to
make laws,
regulations,
procedures and
administrative
rulings of general
application
concerning the
protection and
enforcement of
intellectual
property rights as
transparently as
possible. (Article
18.72)
Parties have to
adopt and
reasonably
implement a
policy to prevent
the release of
infringement IP-
related products
in the area of
border measures.
(Article 18.76)
provide fair and
equitable
procedures for
enforcement of
intellectual
property rights.
(Article 11.36)
Requires Parties
to cooperate in
the area of
border measures.
(Article 11.48)
their
commitments
under the TRIPS
Agreement.
(Article 12)
Cooperation - - Parties shall
endeavour to
cooperate on the
subject matter
covered by this
chapter, such as
training and
exchanging
information.
(Article 18.13.
Parties shall
endeavour to
cooperate among
their respective
patent offices to
facilitate the
sharing and use of
search and
examination work
of other parties
(Cooperation in
area of Patent).
- Parties agree to
co-operate with
a view to
support the
implementation
of the
commitments
and obligations
undertaken
under this
chapter. (Article
30)
13
(Article 18.14)
Enforcement Dispute
submitted under
the TRIPS
agreement can be
brought to the
WTO dispute
settlement body.
(Article 64)
- Dispute under
this Article can be
subjected to the
dispute
settlement,
unless stated
otherwise.
For example,
Article 18.83
stated that
Vietnam’s
implementation
of Article 18.50
(Protection of
Undisclosed Test
or Other Data)
and Article 18.51
(Biologics) three
years after the
conclusion of the
extension period
referred to in
paragraph (A)
shall not be
subject to dispute
settlement under
Chapter 28
(Dispute
Settlement).
No dispute
settlement
provision, but has
cooperation
provision with a
view to
supporting the
implementation
of the
commitments and
obligations
undertaken under
this Chapter.
(Article 11.52)
-
It is to be noted that both the EU and the US’s PTAs have expanded their level of IP
protection. This is because the domestic IP protection regimes in the US and the EU follow
very high standards compared to their trading partners (i.e., developing countries). Pugatch
(2007)29
calls the IP protection approach in the US PTAs the “nanny” or “to-do-list”
approach because it identifies specific IP amendments that the US’s trading partners have to
implement. On the other hand, he calls the EU IP protection approach the “generalist”
approach, wherein the IP protection is applied in more general and in less-issue specific ways
than the US. However, since 2006, the European Commission adopted a new strategy called
“global Europe” for enforcement of the IP protection through the EU’s bilateral trade
29
Ibid, 9-10.
14
agreement with other countries in order to foster the EU’s competiveness30
. Hence, the new
era of IP protection under the EU PTAs follows a similar approach as the US.
Competition Policy (CP)
Developed countries tend to include competition policy in their new PTAs because a lack of
anti-competition rules in developing countries can cause trade barriers and limitation of
market access31
. The application of completion policy in the PTAs seems to reduce barriers
to trade, investment and services. Scholars also find that if there is cooperation between states
in the form of an international agreement, it is easier to deal with competitive practices32
. For
example, successful cartel enforcement in one country will stimulate effort in another
country, especially when there is cooperation enforcement authorization. Apart from that, the
parties of the agreement can share information to cope with investigation and prosecution in
their own territories33
. This thesis includes state trading enterprises (STEs) and consumer
protection because some PTAs include them in the competition policy chapter.
The competition policy can also be either be part of the WTO Plus or WTO Extra. Under the
WTO agreements, Article XXIX of GATT states the obligation of WTO members to observe
Chapter V of the Havana Charter which deals with restrictive business practices34
. Moreover,
Article XVII of GATT requires WTO members to guarantee that their STEs will behave in a
non-discriminatory manner and act in accordance with commercial consideration35
.
However, there are some obligations that fall outside the WTO agreements: the WTO Extra
provisions of competition policy mostly require harmonization of competition laws,
maintenance or establishment of independent competition authority and maintenance of
measures to deal with anticompetitive business conduct36
. The general scope of the
competition policy in the PTAs can be divided into procedural and substantive commitment.
Procedural commitment requires a cooperation between the parties through means such as
30
Anke Moreland, ‘Do Developing Countries Have a Say? Bilateral or Regional Intellectual Property Negotiations with the EU’ [2017] IIC 760. 31
Enrique Valerdi Rodriguez (n 13) 6. 32
Ibid. 33
Julian L. Clarke and Simon J. Evenett, The Singapore issues and the world trading system: the Road to Cancun and Beyond (Bern : Seco, 2003) 117-118. 34
Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10), 1616. 35
Ibid. 36
Ibid, 1579.
15
notification, consultation, exchange of information, and/or coordination of enforcement37
.
Substantive commitments can be further distinguished into two obligations: first,
transparency, which requires parties of the PTA to publish domestic regulations promoting
fair competition and naming anti-competitive practices38
. The second commitment is non-
discrimination.
The following table extends a comparison of competition provisions in the WTO
Agreements, the US regime, and the EU regime.
Table 3: Differences between competition policy (CP) regimes under selected US and
EU PTAs
The WTO
Agreement
The US’s CP regime The EU’s CP Regime
US-Singapore
FTA
TPP EU-Singapore
FTA
EU-Vietnam
FTA
Scope WTO
members
have
obligations to
observe
Chapter V of
the Havana
Charter.
(Article XXIX
of GATT)
Anticompetitive
business conduct
Designated
Monopoly and
Government
Enterprise
Anticompetitive
business
conduct
Consumer
Protection
Antitrust and
Mergers
Public
Undertakings,
Undertakings
Entrusted with
Special or
Exclusive Rights,
and State
Monopolies
Subsidies
Anticompetitive
conduct
Subsidies
Substantive
Provisions
- Parties shall
maintain
measures to
forbid
anticompetitive
business
conduct. (Article
12.2)
Parties shall
ensure that
government
Parties shall
adopt or
maintain
national
competition
laws and make
an effort to
apply its
national
competition
laws to all
commercial
Parties shall
maintain their
respective
territories’
competition
policy legislation
and apply it in a
transparent and
non-
discriminatory
manner.
Moreover,
Parties shall
adopt or
maintain
comprehensive
competition
legislation that
proscribes
anticompetitive
conduct.
(Article 2)
According to
37
Jacques Bourgeois, Kamala Dawar, and Simon J. Evenett,’ A Comparative Analysis of Selected Provisions of Free Trade Agreements’, European Commission DG Trade, 2007. 38
Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10), 1707.
16
enterprises and
their designated
monopolies act
in a manner
consistent with
parties’
obligations
under this
Agreement.
(Article 12.3)
Parties recognize
the value of
transparency of
their
competition
policies by
providing
information
available when
the other parties
request such
information.
(Article 12.5)
activities in its
territory.
(Article 16.1)
Parties shall
adopt or
maintain
consumer
protection laws
or other laws or
regulations that
proscribe
fraudulent and
deceptive
commercial
activities.
(Article 16.6)
parties shall
maintain their
authorities to
deal with
legislation.
(Article 12.1)
Parties shall
adjust state
monopolies of a
commercial
character to
ensure that no
discrimination is
exercised by such
monopolies.
(Article 12.4)
Parties shall
ensure
transparency in
the area of
subsidies related
to trade in goods
and the supply of
services. (Article
12.9)
subsidies,
parties cannot
grant subsidy to
enterprises
providing goods
or services
when they
negatively
affect, or are
likely to affect,
competition
and trade.
(Article x.1)
Parties affirm
their rights and
obligations
under Article 3
of the SCM
Agreement39
.
Parties shall
ensure
transparency in
the area of
specific
subsidies.
(Article x.4)
Procedural
Provisions
- Parties shall
establish or
maintain an
authority
responsible for
enforcement of
its measures to
proscribe
anticompetitive
business
conduct. (Article
12.2)
Parties shall
adopt
procedural
fairness
enforcement in
their
competition
law. (Article
16.2)
Parties have to
make their
competition
enforcement
policies as
transparent as
possible, such
as by regularly
updating
information.
- According to
anticompetitive
conduct, parties
shall maintain
authorities
responsible for,
appropriately
equipped for,
and with the
powers
necessary for
the full
application and
effective
enforcement of
their
competition
law. (Article 3)
Parties can
39
Agreement on Subsidies and Countervailing Measures.
17
(Article 16.7)
grant subsidies
only in keeping
with this
Agreement and
under Article VI
of GATT 1994,
the SCM
Agreement, and
the WTO
Agreement on
Agriculture.
(Articles x.1 and
x.3)
cooperation - Parties
recognize the
importance of
cooperation to
further effective
competition law
and policy
development.
(Article 12.4)
Parties shall
cooperate in
the area of
competition
policies.
(Articles 16.4
and 16.5)
Parties shall
endeavour to
coordinate and
cooperate in the
enforcement of
their respective
laws to fulfil the
objective of this
Agreement.
(Article 12.11)
A party may ask
for consultation
with another
party, but no
legal
enforcement for
the consultation.
(Article 12.13)
Parties
acknowledge
that it is in their
common
interest to
strengthen
cooperation
with regard to
competition
policy
development.
(Article xx.3)
Enforcement - Parties cannot
bring a dispute
under this
Agreement for
any matter
arising under
Article 12.2
(Anticompetitive
business
conduct), 12.4
(Corporation),
or 12.6
(transparency)
to dispute
settlement
process. (Article
Parties cannot
bring dispute
under this
chapter to
dispute
settlement
process. (Article
16.9)
A party may ask
for consultation
in order to
foster
understanding
between the
parties, or to
address specific
Parties cannot
bring any dispute
under this
chapter, except
for prohibited
subsidies to
dispute the
settlement
process. (Article
12.14)
Parties cannot
bring dispute
under this
chapter to
dispute.
(Articles 4 and
x.7)
However, if a
party considers
that a
disputable
specific subsidy
granted by the
other party, the
party can
request
18
12.7)
matters that
arise under this
chapter, but no
legal
enforcement.
(Article 16.9)
consultations
on the matter.
The result of
consultation is
elimination or
minimization of
the negative
effects on the
requesting
party’s trade
and investment
interests caused
by the subsidy
in question.
(Article x.5)
Conclusively, it can be seen that each PTA has a different perspective on conduct of
competition. However, the substantive provisions under selected PTAs of the EU and the US
seem to be similar: they state that the parties have to provide anticompetitive regulation,
which includes non-discrimination and transparency. According to enforcement, this chapter
is not subject to dispute settlement mechanism in the agreement. However, it is worthy of
notice that the dispute settlement clause in the FTA between the US and Singapore uses
different wording from the other selected FTAs (which state that “No Party shall have
recourse to dispute settlement for any matter arising in under this Chapter”). The FTA
between US and Singapore states that
“A Party shall not have recourse to dispute settlement under this Agreement for
any matter arising under Article 12.2, 12.4, or 12.6.”
Thus, it can be interpreted that other articles, except Article 12.2, 12.4, or 12.6, are subject to
dispute settlement under this agreement. Apart from that, the area of Consumer Protection is
stated only in TPP: it requires parties to harmonize consumer protection laws and exchange of
information and train experts40
.
A comparison of the STEs provisions in the WTO Agreements, the US regime, and the EU
regime is shown in the table below.
40
Ibid, 1579.
19
Table 4: Differences between State Trading Enterprises (STEs) regimes under selected
US and EU PTAs
The WTO
Agreement
The US’s STEs regime The EU’s STEs Regime
US-Singapore
FTA
TPP EU-Singapore
FTA
EU-Vietnam FTA
Scope STE means a
“State
enterprise” or
“any
enterprise”
that has been
granted
“formally or in
effect,
exclusive or
special
privileges”41
.
No specific
STEs chapter,
but it is
included in the
competition
policy.
The scope of
STE is stated in
Article 12.8.
This chapter
applies with the
act of STE,
whose scope is
stated in Articles
17.1 and 17.2.
No specific STEs
chapter, but it is
included in the
competition
policy chapter.
There is a
specific chapter
regarding STEs.
Articles 1 and 2
state the scope
of STE.
Substantive
Provisions
STEs have to
act in a manner
consistent with
the general
principles of
non-
discriminatory
treatment.
(Article XVII of
GATT)
Each WTO
member shall
ensure that any
monopoly
supplier of a
service in its
territory does
not act
inconsistently
with the Most-
Favoured-
Nation
Treatment.
(Article VIII of
Each party
shall ensure
that any
government
enterprise that
it establishes
or maintains
acts in a
manner that is
not
inconsistent
with the
party’s
obligations
under this
agreement.
The US ensures
that any
government
enterprise that
it establishes
or maintains
accords with
non-
discriminatory
Each party shall
ensure that each
of its state-
owned
enterprises acts
in accordance
with commercial
considerations.
(Article 17.4)
Each party shall
ensure it does
not have adverse
effects on the
interests of
another party
through the use
of non-
commercial
assistance.
Moreover, its
STEs also do not
cause adverse
effects to the
interests of
another party.
Parties have to
ensure that there
is no
discrimination is
exercised by state
monopolies
(Article 12.4)
Parties affirm
their rights and
obligations
under Article
XVII of GATT and
Article VIII of
GATs. (Article 2)
(Non-
Discrimination)
Parties shall
ensure that they
accord
treatment no
less favourable
to enterprises of
the other party
than they
accord to
enterprises of
the party.
(Article 4)
(Transparency)
A party which
has reasonable
41
UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XVII OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art17_e.pdf accessed on 24 April 2018.
20
GATs) treatment.
Singapore
ensures that
any
government
enterprise
provides non-
discriminatory
treatment.
(Article 12.3)
(Article 17.6)
Each party shall
provide to the
other Parties or
otherwise make
publicly available
on an official
website a list of
its state-owned
enterprises and
if other party
arks for
information. On
the written
request of
another party, a
party shall
promptly
provide the
following
information
concerning a
state-owned
enterprise or a
government
monopoly.
(Article 17.10)
reason to
believe that its
interests are
being adversely
affected by the
commercial
activities of an
enterprise of
the other party
may request in
written from
that party to
supply
information
about the
operations of
that enterprise,
but this does
not require a
party to disclose
confidential
information.
(Article 6)
Procedural
Provisions
- - Each party shall
provide its
courts with
jurisdiction over
civil claims
against and
ensure that any
administrative
body that the
party establishes
or maintains and
which regulates
a state-owned
enterprise
exercises its
regulatory
discretion in an
impartial
manner. (Article
17.5)
- -
21
Cooperation - - Parties when
appropriate and
subject to
available
resources, may
engage in
mutually agreed
technical
cooperation
activities such as
exchanging
information
(Article 17.11)
Parties shall
engage in
mutually agreed
technical
cooperation
activities in
order to
promoting
efficiency and
transparency of
state-owned
enterprises
(Article 7).
Enforcement - Article 12.7
may interpret
that parties
can bring
dispute arising
under Article
12.3
(government
enterprises
and designated
monopolies) to
dispute the
settlement
process.
There is no
dispute
settlement
article in the
main text, but
Annex 17-B
states that “If a
panel has been
established
pursuant to
Chapter 28
(Dispute
Settlement) to
examine a
complaint arising
under Article
17.4 (Non-
discriminatory
Treatment and
Commercial
Considerations)
or Article 17.6
(Non-
commercial
Assistance), the
disputing Parties
may exchange
written
questions and
responses…”.
This can be
interpreted as
the chapter
under TPP being
subject to
dispute
A party can ask
for consultation
with another
party in order to
foster mutual
understanding
between the
parties or to
address specific
matters that arise
under state
monopolies, but
the result of
consultation is
not legally
binding. (Article
12.13)
-
22
settlement
mechanism.
It is evident from the table that both the US and the EU have similar regimes that lack an
enforcement obligation. Moreover, they are applied on the basis of non-discrimination and
transparency. However, under the TPP agreement, there seems to be extra obligation for the
parties. The STEs of the party cannot cause adverse effect and injuries to other STEs. It needs
to be noted, nevertheless, that in the TPP agreement, there are exceptions for such
obligations, which will be discussed in the following section.
Environment
The Environmental chapter in the deep agreements is a WTO Extra provision. The OECD
secretariat provides three reasons why PTAs should include the environmental chapter: it will
promote sustainable development and result in a high level of protection. Secondly, it will
improve environmental cooperation among parties. Finally, it helps parties pursue the agenda
in international environmental agreements of which the parties of the PTA are members42
.
Each agreement contains differential text and content. In general, the environmental chapter
under the PTAs requires the development of environmental standards, enforcement of
environmental laws and publication of such laws, and establishment of sanctions for violation
of environmental laws43
.
Table 5: Differences between Environmental regimes under selected US and EU PTAs
The WTO
Agreement
The US’s environmental regime The EU’s environmental Regime
US-Singapore FTA
TPP EU-Singapore
FTA
EU-Vietnam
FTA
Scope No specific
agreement
dealing with
the
environment
under WTO
rules.
Specific
environment
chapter
Specific
environment
chapter
No specific
environment
chapter, but the
environmental
protection issue
is included in
trade and
No specific
environment
chapter, but the
environmental
protection issue
is included in
trade and
42
OECD, Regional Trade Agreements and Environment (Com 47, 2007) 25-26. 43
Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10), 1579.
23
sustainable
development
chapter.
(Section C)
sustainable
development
chapter.
Substantive
provisions
- Parties can
establish their own
level of protection,
but need to ensure
that their laws
provide for high
levels of
environmental
protection. (Article
18.1)
Parties affirm
their
commitment to
implement
multilateral
environmental
agreements to
which they are
party. (Article
20.4)
Parties shall take
measures to
protect the ozone
layers by
implementing the
Montreal
Protocol or any
subsequent
measure that
provides an
equivalent or
higher level of
environmental
protection.
(Article 20.5)
Parties shall take
measures to
prevent pollution
of the marine
environment
from ships by
implementing
International
Convention for
the Prevention of
Pollution from
Ships (MARPOL).
(Article 20.6)
Parties shall seek
to operate a
fisheries
Parties can
establish their
own levels of
environmental
and protection.
(Article 13.2)
Parties reaffirm
their
commitment to
reaching the
ultimate
objective of the
UNFCCC46
.
(Article 13.6)
Parties need to
promote the
effective use of
the Convention
on International
Trade in the
CITES with
regard to
timber species.
(Article 13.7)
Parties shall
introduce and
implement
effective
measures to
combat illegal,
unreported and
unregulated
(hereinafter
referred to as
“IUU”) fishing.
(Article 13.8)
Parties have the
right to
implement their
own
environmental
law, but they
need to ensure
that their laws
and policies
provide for and
encourage high
levels of
domestic
protection in
the
environmental
areas. (Article 2)
Parties reaffirm
their
commitment to
reaching the
ultimate
objective of the
UNFCCC to
protect climate
change. (Article
5)
Parties shall
adopt and
implement
appropriate
effective
measures
consistent with
its
commitments
under the
CBD47
and the
CITES. (Article 6)
Parties shall
46
The UN Framework Convention on Climate Change. 47
The Convention on Biological Diversity
24
management
system based on
the best scientific
evidence
available and on
internationally
recognized best
practices for
fisheries
management
such as
UNICLOS44
, the
2001 IUU Fishing
Plan of Action.
Parties shall
adopt, maintain
and implement
laws, regulations,
and any other
measures to fulfil
their obligations
under CITES45
.
adopt measures
consistent with
domestic laws
and
international
treaties to
which of which
it is a part, such
as FLEGT48
, to
promote the
conservation of
forest resources
and combat
illegal logging
and related
trade. (Article 7)
Parties shall
comply with
long-term
conservation
and
management
measures and
sustainable
exploitation of
marine living
resources as
defined in
UNICLOS and
the IUU Fishing
Plan of Action.
(Article 8)
Procedural
provisions
- Parties have to
ensure that
judicial, quasi-
judicial or
administrative
proceedings are
available under
their
environmental law.
(Article 18.3)
Parties shall
ensure that
judicial, quasi-
judicial or
administrative
proceedings for
the enforcement
of their
environmental
laws are available
under their law
and that those
- -
44
The United Nations Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of December 1982. 45
The Convention on International Trade in Endangered Species of Wild Fauna and Flora 48
The conclusion of a Forest Law Enforcement Governance and Trade (“FLEGT”) Voluntary Partnership Agreement
25
proceedings are
fair, equitable
and transparent,
and comply with
due process of
law. (Article 20.6)
Corporation - Parties may share
information and
experiences in
assessing and
taking into account
positive or
negative
environmental
effects of trade
agreements and
policies. (Article
18.6)
Parties shall
cooperate among
the participating
parties related to
the
implementation
of this chapter.
(Article 20.12)
Parties shall
work together
on trade-related
aspects of
environmental
policies in order
to achieve the
objectives of
this agreement.
(Article 13.10)
Parties shall
exchange
information and
experience with
regard to
implementing
this chapter.
(Article 14)
Enforcement - Consultation and
joint committee
when the
consultation fails.
(Article 18.7)
If the party fails
to resolve the
matter under
consultation
measures in this
chapter, the party
can bring the
dispute to the
Dispute
Settlement Body
under the TPP
agreement.
(Article 20.23)
Dispute
Settlement does
not apply to this
chapter. (Article
13.16)
Dispute
Settlement does
not apply to this
chapter. (Article
16)
Thus, the US’s regime requires both substantive and procedural obligations. The procedural
obligation can be divided into two models. The first is the Clinton model, which places
environmental judicial settlement on a par with other trade commitments. The other model is
the Bush model, which contains ‘good-governance’ provisions that create separate dispute
mechanisms to increase the transparency of the provision.49
However, it is noteworthy that
the TPP agreement requires a high standard of environmental protection by referring to other
environmental conventions that the TPP’s parties have to implement in their environmental
law. If the parties cannot comply with such obligations, other parties can bring the non-
compliance issue to the Dispute Settlement Body under the TPP agreement. On the contrary,
49
Jacques Bourgeois, Kamala Dawar, and Simon J. Evenett (n 17), 71.
26
the EU’s regime is only seeking an affirmation of environmental protection. The parties have
to commit to protect the environmental provision by enforcing their own domestic
environmental laws. It should also be noted that under the EU regime, there is no dispute
settlement clause. Thus, it seems less legally enforceable than the US regime.
Section Conclusion
As can be seen from Tables 2 to 5, obligations under the selected PTAs of the EU and the US
are very comprehensive and have higher standards than those under the WTO agreements.
Even though each PTA has a different form and language depending on negotiation, it is
noteworthy that the high standard of obligations is exported from the US and the EU’s
regulatory frameworks to their trade partners. It can be seen that the newer PTAs, such as the
TPP and the FTA between EU and Vietnam, have stricter obligations than the older. Even
when the same developing country negotiates PTAs with different developed countries, the
results of negotiations are unlikely to be the same. The US regime in intellectual property
protection has stricter obligations than the EU because it forces its trade partners to ratify or
accede to international agreements that sometimes its trade partners are not parties.
Moreover, even though it is not stated directly in the text, the parties can bring the dispute
under the IP chapter to dispute settlement in the agreement. Contrary to the EU regime, it
cannot be enforced in the IP chapter and it provides a higher standard than TRIPS in some
areas, such as extending the term of protection and scope of IPRs. Apart from that, it requires
parties to comply with international agreements that they have already been part of.
Concerning the competition policy and state trading enterprise chapters, most selected PTAs
require their parties to have law and policy on this area and treat other parties without
discrimination. However, the TPP agreement has another obligation which prohibits a party
from causing adverse effects or injury to another party or its STEs. Apart from that, a party
can bring a dispute under specific issue under the TPP agreement to dispute settlement, while
other PTAs state that this chapter cannot be subject to dispute settlement.
With regard to the environment issue, the US PTAs separate this issue into one chapter, but in
the EU’s PTAs, it is included in the trade and sustainable development chapter. All of them
refer to existing international agreements which require parties to comply with such
agreements. Only disputes in the environmental chapter under the TPP agreement can be
submitted to dispute settlement under the TPP agreements. As a result, the TPP agreement is
very comprehensive. All selected chapters under the TPP agreement have an enforcement
27
procedure in addition to a very high standard of obligations. This will make them legally
enforceable, and the trade partners of the US should bear this in mind when negotiating PTAs
with the US.
Impact of the WTO Plus and Extra on developing countries
In order to determine the impact of the WTO Plus and Extra on developing countries, it is
important to not only consider the obligation that such an agreement contains, but also the
enforcement of the obligation. If the obligation is not enforceable, it does not seem to be
legally binding with the parties. On the contrary, if it can be successfully invoked in the
dispute settlement proceedings, it could have an impact50
. In order to interpret the obligations
under the selected PTAs, this thesis uses the rule of interpretation under Section 3 (Articles
31-33) of the Vienna Convention on the Law of Treaties (VCLT). Moreover, McCaffrey
(2006) indicates that “…the intent to create a legal relationship is distinct from the intent to
create a moral obligation or political commitment. This is exemplified by words of
obligations, most commonly “shall”, but also “agree”, “undertake”, and the like. Obviously,
references to “rights” and “obligation” are also indicators of intent to create a legal
relationship. Terminology such as “should” and “will” do not typically indicated such
intent…”51
.
Intellectual Property Rights (IPRs)
As per Table 2, the TRIP plus obligations in the selected PTAs expand the scope of the
protection on patents and other issues such as trade secrets, e-commerce, internet service
provides liability, data protection, and plant variety. Concerning patent protection, this issue
seems to be the most difficult for developing countries to negotiate in the PTAs due to its
relation with the access to essential medication. All selected PTAs seem to increase the level
of protection in pharmaceutical patents through patent provision in the PTAs. Moreover, they
require more protectable subject matter with border extensive coverage, weakening the
flexibilities of the TRIPS agreement52
.
All selected PTAs request parties to protect the data of the patent through “data exclusivity”.
Data exclusivity means protecting the confidentiality of data used to support a patent
application. However, the term and scope of protection are different in each PTA. The TPP
50
Henrik Horn, Petro C. Mavroidis and Andre Sapir (n 10), 1580. 51
Stephen C. McCaffrey, Understanding International Law (2nd
edn, LexisNexis 2015). 52
Bryan C. Mercurio, ‘TRIPS-Plus Provisions in FTAs: Recent Trends’ [2006] Oxford University Press 215.
28
agreement protects data exclusivity in pharmaceutical products (for 5 years; Article 18.50),
biological products (for 8 years; Article 18.52), and agriculture chemical products (for 10
years; Article 18.47). The US-Singapore FTA requires protection of data for least five years
from the date of approval for a pharmaceutical product and ten years from the date of
approval for an agricultural chemical product (Article 16.7). The EU-Singapore FTA allows
data to be protected at least five years for a pharmaceutical product and ten years for an
agricultural chemical product (Articles 11.33 and 11.34). The EU-Vietnam FTA provides at
least a five-year data protection for pharmaceutical or agrochemical product (Article 9). Data
exclusivity means that patent holders will receive data protection apart from the patent
protection of their invention, and even upon the expiration of a patent term, the data might
still be protected (Article 18.54 of the TPP agreement). Data exclusivity certainly affects
developing countries, most of which do not usually provide data protection in their national
law. A generic manufacturer will be impacted by this provision because it does not depend on
clinical trials and other data submitted by the original applicant before marketing a drug. As a
result, the former will have to conduct the clinical trial independently, thus using up a
significant amount of resources53
. Moreover, conducting tests and generating clinical trials
are extremely expensive54
. As a result, this will have a detrimental effect on the citizens of
developing countries due to the generic manufacturing required to sell a drug at high prices.
Furthermore, Lester, Mercurio and Bartels55
claim that data exclusivity is also a de facto
patent ensuring minimum period of monopoly for pharmaceutical companies, because a
country cannot take advantage of compulsory licensing (CL) in the presence of data
exclusivity protection. This is because a generic manufacturer granted authority to produce a
CL drug cannot rely on existing data to obtain regulatory approval56
. Apart from that, all
selected PTAs mandate parties to compensate the unreasonable delay of the patent process by
granting a longer period of protection, apart from extending the term of patent protection in
the TRIPS agreement. As a result, patent holders will have a longer monopoly over their
invention and data. The problem that may occur is considered ‘unreasonable’. The PTAs do
not define this word and it may be troublesome when put into practice57
.
53
Ibid, 226. 54
One clinical trial costs about one million dollars. See also Robert Weissman, ‘Dying for drugs: how CAFTA will undermine access to essential medicines’ [2004] Multinational Monitor 13. 55
Simon Lester, Bryan Mercurio and Lorand Bartels, Bilateral and Regional Trade Agreements: Commentary and Analysis (2
nd edn, Cambridge University Press 2016) 352.
56 Bryan C. Mercurio (n 43) 228.
57 Ibid 230.
29
Apart from the extension of patent protection, the new PTAs seem to make the process of
patent registration much easier. The TPP agreement is a good example. According to the
scope of the patentable, Article 18.37 allows new or used applications of an existing product
(new indication, new formulation, new method) to be registered as a patent. For example,
even if a US company has already been granted the patent for a skin treatment cream, when
the cream is repurposed for a new treatment, the parties to the TPP agreement have to grant a
patent to the new treatment. Moreover, it requires parties to accede to multilateral IP
protection such as The Budapest Treaty on the International Recognition of the Deposit of
Microorganisms for the Purposes of Patent Procedure (called the Budapest Treaty for short),
which permits patentability to microorganisms. The extension of patentable scope seems to
affect developing countries in that their domestic law and regulations do not allow for the
registration of such an invention. Under the TRIPS Agreement, Article 27.1, “Patents shall be
available for any inventions, whether products or processes, in all fields of technology,
provided that they are new, involve an inventive step and are capable of industrial
application.”
Moreover, Article 27.3 allows parties to the TRIPS agreement to be excluded from
patentability for “(a) diagnostic, therapeutic and surgical methods for the treatment of humans
or animals; (b) plants and animals other than micro-organisms, and essentially biological
processes for the production of plants or animals other than non-biological and
microbiological processes. However, Members shall provide for the protection of plant
varieties either by patents or by an effective sui generis system or by any combination thereof.
The provisions of this subparagraph shall be reviewed four years after the date of entry into
force of the WTO Agreement.” This means that parties to the TRIPS agreement may exclude
Article 27.3 (a) and (b) from patentability, but the TPP agreement seems to extend the scope
of patentability. As a result, developing countries may have to amend their law to extend the
scope of the patentable.
Furthermore, all selected agreements require parties to accede to the International Union for
the Protection of New Varieties of Plants (UPOV) 1991 in order to protect plant variety. The
UPOV Agreement provides a period of protection for new plant breeds and creates rights for
the breeder over the re-use and sale of seeds. These provisions in the UPOV are controversial
in developing countries that are agricultural producers because they are afraid that the farmer
that used protected seed may have increased revenue than seed owners. New plant breeders
have a monopoly in the market. Most farmers in developing countries have a low income and
30
education. As a result, they may unintentionally violate the obligation under the UOPV
agreement. Hence, many developing countries such as Malaysia, Mexico and Brunei
Darussalam are not yet parties of the UPOV convention. However, if they are parties to the
EU and US PTAs, they need to accede to the UPOV convention.
The issues that have been discussed above are the most controversial in developing countries.
The veto powers in these countries are concerned about the patent for pharmaceutical
products which will never be expired (so called “evergreening patent”)58
. It is likely that the
deep PTAs increase higher level of protection than stated in the TRIPS agreement. The strong
level of patent protection in the deep PTAs has an impact on pharmaceutical products. The
patent holders, which, in developed countries, are mostly companies, seem to enjoy the
“intellectual monopolies”59
, while the farmer and domestic pharmaceutical companies face
obstacles in complying with the high standard of protection. Moreover, the IP protection in
the TPP agreement has complicated wording concerning the dispute settlement clause in the
IP chapter because it is not directly stated in the main text, but in the annexes. For example,
Annex 18-A (annex to Article 18.7.2 (International Agreements)) states the following: “The
consistency of any measures referred to in paragraph 2 with the obligations in paragraph 1
shall not be subject to the dispute settlement provisions of this Agreement.”
This statement implies that apart from any issues stated in the annex, parties may subject such
an issue to the dispute settlement in the agreement. Apart from dispute settlement, all IP
chapters in the selected PTAs require parties to provide a strong criminal and civil
enforcement for the infringement of IP rights. Thus, the IP-rights holders can file a suit
against the alleged infringer in the territory of parties.
Competition Policy (CP)
According to Table 3, the competition policy chapters in the selected PTAs seem to have
similar obligations. Even though they do not provide supra-national competition law, they
require parties to the PTAs to enact or maintain their national competition law. Moreover, the
TPP agreement requires parties to adopt or maintain the consumer protection law or other
laws that proscribe fraudulent and deceptive commercial activities in either civil or criminal
form. In case the parties already have the national competition law, the competition policy
chapter requires them to implement it. This may increase the liability for developing
58
Archanun Kohpaiboon and Juthathip Jongwanich, ‘Should Thailand Join the TPP?’ [2017] Economics Working Papers 1. 59
Enrique Valerdi Rodriguez (n 13) 10.
31
countries that do not have a national competition law, since they need to enact one to
conform to the obligation under the competition policy chapter. On the other hand, if they
have already imposed the domestic competition policy, this obligation does not seem like an
obstacle because it does not require an amendment of the national competition law.
Moreover, with respect to the enforcement under the competition policy chapter, the violation
of obligations under this chapter in all selected PTAs cannot be subject to dispute settlement,
except in case of the subsidy issues in the EU-Singapore FTA. Additionally, all selected
PTAs allow a party to make a consultation with another, but most results of the consultation
are not legally binding. However, it should be noted that under Article 12.7 of the US-
Singapore FTA, parties can bring dispute arising under Article 12.3 (government enterprises
and designated monopolies) to dispute the settlement process. This is related to STEs’
obligations and will be discussed thus. The procedural obligations under the selected PTAs
also require parties to adopt procedural fairness enforcement in their competition law.
However, they are hortatory rather than obligatory to the parties because they do not have the
same legal effect as the substantive provisions discussed above.
Another requirement under these selected PTAs is cooperation among parties; the
competition chapters require cooperation in the area of competition policy, such as
competitive law enforcement through various measures, including negotiation, consultation
and exchange of information. However, the impact of these provisions is the same as two
provisions due to their non-legally binding effect. Moreover, it is noteworthy that the text
uses words such as “endeavor" and "acknowledge”, indicating that parties should cooperate
with others on their existing resources. Contrary to the transparency obligation, it requires
parties to provide information, stating that “a Party shall make available to the requesting
Party public information concerning…”.60
Thus, if other parties request information, the
party has to provide such information unless stated otherwise in the agreement.
The STE chapter originates from the theory that the STE enjoys subsidies from the
government, which is troublesome to STEs in other countries or private companies61
.
According to the STE chapters under the selected PTAs (Table 4), the principle obligations in
the selected PTAs are non-discrimination and transparency. A party has to treat other parties’
state-owned enterprises under the scope of the chapter in the same way that its own state-
owned enterprise is treated. Moreover, if other parties request disclosure of information
60
Article 16.7 of the TPP Agreement. 61
Gary C. Hufbauer and Cathleen Cimino-Isaacs, ‘How will TPP and TTIP Change the WTO System?’ [2015] Journal of International Economic Law 679.
32
regarding STEs, a party is obliged to provide the information. Apart from that, under the TPP
agreement, there is an additional obligation called non-commercial assistance (Article 17.6).
This provision requires a party not to cause adverse effects or injuries to the interests of
another party’s state-owned enterprise/s through the use of the non-commercial assistance
that it provides, either directly or indirectly. The definition of adverse effects and injuries are
stated in Articles 17.7 and 17.8 of the TPP agreement. The non-commercial assistance
provision has a similar wording as the Agreement on Subsidies and Countervailing Measures
(ASCM) in the WTO agreements, but it does not have the same obligation or follow the same
measures to calculate adverse effects or injuries. Thus, parties willingly fulfil these
obligations. In case the developing parties are parties of the selected PTAs, the developing
countries should be aware that they cannot support or subsidize their state-owned enterprises.
However, because there is no dispute settlement clause under this chapter, except in the TPP
and the FTA between the US and Singapore, those obligations seem non-enforceable. Tools
that may solve a misunderstanding between parties regarding these provisions are
cooperation or consultation (available only in some FTAs such as the TPP agreement).
As a result, the competition policy and STE in the PTAs seem to have a positive impact on
developing countries. Considering third parties’ view, if developing countries have a national
competition law and fair and transparent enforcement of such a law, foreign investors can
trust this system and invest more in their counties. Moreover, developing countries will also
benefit from this because they can use the anti-competitive measures to cope with dominant
multinational companies and protect smaller and weaker domestic companies in their
countries. In conclusion, there seems to be little impact on developing countries. The
developing countries that might be affected are those that lack a national competition law.
Other countries may have transparency obligation to provide the information that other
parties ask for. However, due to the non-legally binding provisions under this chapter, the
parties cannot bring a dispute to the dispute selectmen and the procedural obligations are
limited to cooperation. Thus, if parties do not conform to obligations under this chapter, there
is not significant consequence.
On the contrary, the STE chapter, especially under the TPP agreement, may have negative
impacts on developing countries. Moreover, it may be linked to the IP chapter and affect
access to essential medicine. Some industries that produce generic drugs in developing
countries are state-owned enterprises, such as the Government Pharmaceutical Organization
33
(GPO) in Thailand62
. Hence, such enterprises do not fall outside the STE’s scope under
Article 17.2 of the TPP. Thus, the government cannot subsidize these enterprises, resulting in
a rise in medication prices.
Environment
The environmental chapter in each selected PTA prioritizes the protection of different
specific subjects through ratifying or complying with multilateral environmental agreements
(MEAs). The FTA between the US and Singapore requires protection of the environment by
requiring parties to establish their own levels of domestic environmental protection and strive
to continue to improve those laws. The TPP agreement requires parties to protect the ozone
layer, the marine environment, biological diversity, invasive alien species, marine fisheries,
and wild fauna and flora. Parties to the TPP agreement have to adopt, maintain and
implement laws, regulations and any other measures to fulfil their obligations under
international treaties such as the Convention on International Trade in Endangered Species of
Wild Fauna and Flora (CITES). Moreover, parties shall seek to operate law or policies that
regulate the same level of protection under the international environmental treaties such as
the Montreal Protocol on Substances that Deplete the Ozone Layer, drawn at Montreal,
September 16, 1987 (Montreal Protocol). The US-led PTAs mandate that a dispute under the
environmental chapter is subjected to the dispute settlement or consultation under those
agreements. Contrary to the EU’s PTAs, there is no specific environmental chapter; the
environmental issue is stated in the trade and sustainable development chapter and, which
lacks a dispute resolution clause. However, the EU PTAs require specific environmental
subjects to be protected. The FTA between the EU and Singapore requires parties to protect
trade-related environmental aspects, such as Trade in Timber and Timber Products and Trade
in Fish Products. Similarly, environmental protection in the EU-Vietnam PTAs requires
specific subject protection, such as climate change (commitment to reaching the ultimate
objective of the United Nations Framework Convention on Climate Change (UNFCCC) and
its Kyoto Protocol), biological diversity (ensuring the conservation and sustainable use of
biological diversity in accordance with the Convention on Biological Diversity (CBD) and its
Strategic Plan for Biodiversity, the Convention on International Trade in Endangered Species
of Wild Fauna and Flora (CITES), and other relevant international instruments to which they
are party), sustainable forest management and trade in forest products (encourage parties to
comply in accordance with the domestic legislation of the country of harvest; this may
62
See also http://www.intergpomed.com/Default.aspx?tabid=167.
34
include the conclusion of a Forest Law Enforcement Governance and Trade (“FLEGT”)
Voluntary Partnership Agreement), trade and sustainable management of living marine
resources and aquaculture products (comply with the UN Convention on the Law of the Sea
of 1982 (UNCLOS), and cooperate in and actively engage in the fight against illegal,
unreported and unregulated (IUU) fishing and fishing-related activities with comprehensive,
effective and transparent measures to combat IUU)).
As a result, developing countries which are parties to the PTAs need to comply with the
obligation by imposing environmental law or acceding to multilateral environmental
agreements. It should be noted that parties do not have to comply with all multilateral
environmental agreements. Some specific issues only require protection at the same level as
multilateral environmental agreement, but not to ratify such treaties. However, some issues
require acceding to multilateral environmental conventions. Not all developing countries are
parties to the multilateral environmental conventions; some may be parties to the Montreal
Protocol, but not to CITES. As a result, developing countries not only study the obligation
under the PTAs, but also research the multilateral environmental treaties. Farmers or
agricultural producers of developing countries may face difficulties in specific areas where
PTAs or MEAs have strict protection. For example, the fisheries management area under the
EU-Singapore and TPP requires parties to combat IUU fishing and promote conservation fish
stocks63
. It should be noted that the environmental chapter in the US PTAs have more legal
enforcement than the EU because of the presence of procedural obligations such as
committee, consultation at the level of ministerial and senior representation (Articles 20.11
and 20.22 of the TPP agreement), and dispute resolution. However, all of the selected PTAs
provide cooperation provisions that allow the parties to exchange information or endow
technical help with each other. To conclude, the environment chapter seems to be a hindrance
to developing countries that do not have a high standard of environmental protection as
developed countries. They need to ratify to multilateral environmental treaties or amend their
national law to reach the same level of protection as stated in multilateral environmental
treaties. Failure to do so under the EU PTAs will not result in dire consequences, but under
the US PTAs, a trade sanction will be imposed on the country in question64
.
63
David Vivas Eugui, ‘The TPP, the Environment, and Implications for Developing Countries’ (Cuts International Geneva, March 2016) < http://www.cuts-geneva.org/pdf/EXT3%20-%20David%20Vivas%20-%20Snapshot%20Environment%20in%20the%20TPP.pdf> accessed 4 May 2018. 64
Gary C. Hufbauer and Cathleen Cimino-Isaacs (n 51) 684.
35
Section Conclusion
According to general principle of law, pacta sunt servanda, parties to the preferential trade
agreements must keep their promise and fulfil their obligations. Moreover, international
agreements are international laws that parties are bound by. As a result, parties to PTAs need
to comply with the obligations under the PTAs. However, the consequence of violation of a
provision is essential for its compliance; if the provisions are only hortatory not obligatory,
parties may tend to neglect them. On the contrary, if the provisions can be subject to dispute
settlement, parties may be afraid of the result and avoid violating the obligation. With respect
to the selected PTAs, some chapters tend to be subject to the dispute settlement mechanism
such as intellectual property, STE and environment. Hence, these chapters are considered
legally enforceable. On the contrary, the competition policy chapter has loose provisions,
such as cooperation, implementation of the national competition law, and no enforcement. In
such cases, the parties may not fully comply with the provisions. Each PTA seems to give
precedence to different subjects depending on the trade partners. Moreover, it can be noticed
that three topics can be linked together, for example, in Article 18.80 of the TPP agreement
which requires state-owned enterprises to comply with the intellectual property chapter.
Moreover, a trade agreement is the result of negotiation. Parties to the PTAs may create
exceptions in the area when they realize that they cannot comply with it. For example, Article
18.21 of the TPP agreement states the following:
A Party may provide limited exceptions to the rights conferred by a trademark,
such as fair use of descriptive terms, provided that those exceptions take account
of the legitimate interest of the owner of the trademark and of third parties.
Parties may include exceptions in the form of a specific area or transitional period. Especially,
for the obligation that requires a national law reform or acceding to international treaties, a
party may ask for a transition period to amend it law. For instance, Article 18.83 of the TPP
agreement allows the party to avail itself of a transition period. Furthermore, the TPP
agreement, which is a regional agreement, has side letters in order to have clear understanding
between parties regarding the obligations under the agreement. For example, because the
republic of Singapore is both a TPP and US-Singapore party, the US sent a side letter to
Singapore to confirm the STE’s obligation that Article 12.3(2)(g)(i) of Chapter 12 of the FTA
between US and Singapore has the same meaning as Article 17.10.1 of the TPP Agreement.
The side letters may sometimes contain a waiver for obligation. For example, the side letter
under The Central America-Dominican Republic-United States Free Trade Agreement states
36
that “the obligations set forth in the FTA do not affect the ability of either party to take
necessary measures to protect public health by promoting access to medicines for all, in
particular concerning HIV/AIDS, tuberculosis, malaria and other epidermis, as well as
circumstances of extreme urgency or national emergency”65
.
Conclusion
As a result of unsuccessful attempts to strengthen the high standard of protection in the WTO
agreement due to the consensus-making process of the WTO, developed countries shift to
negotiating a PTA which lacks consensus decision-making to secure a profitable agreement.
It cannot be denied that the PTA leads to elimination of tariffs and non-tariff barriers between
trade parties and increases market access. Moreover, consumer welfare and growth in GDP
will also increase. However, the downside of negotiating PTAs may be experienced by
developing countries when negotiating with trading partners that have more bargaining
power. The difference in bargaining power between developed countries and developing
countries sometimes leads to developing countries unwillingly adopting the high regulatory
regimes of developing countries. Developing countries may not be ready to adapt to such
high protection and high cost of adopting advanced standard. For example, developing
countries have to adopt the strict protection of patent in the TPP agreement when they decide
to be parties to the TPP agreement, but they cannot manage the effect of the strict obligation.
This may have a negative impact on access to essential medicine of the parties to TPP
agreement, and somehow, developing countries do not provide the solution to cope with it.
Developing countries need to consider the trade-offs between the negative impact on some
areas such as intellectual property and improved market access in goods in developed
countries.
With respect to WTO Plus and Extra, as can be seen in Section 3 (The WTO Plus and WTO
Extra in the US and the EU regimes: Similarity and Difference) of this thesis, both US-led
PTAs and EU-led PTAs require developing countries to adopt more comprehensive and
higher obligations than WTO agreements. Moreover, the newer PTAs imposed by the US and
the EU have more comprehensive provisions. Furthermore, it is noteworthy that in some
topics under the PTAs of the US and the EU, such as competition policy or STE and
environment, the US approach seems similar to the EU’s, with few differences. Apart from
that, the intellectual property protection approach in the US PTAs is different from the EU
65
Bryan C. Mercurio (n 43) 234.
37
approach. It can be said that the US approach, especially in the TPP agreement, is more
complex than the EU. Particularly in the area of patents, the US approach extends the scope
and term of patent protection. In general, developing countries may use the same principle
solutions with minor differences to keep up with PTAs from both the US and the EU,
depending on the complexity of the PTA and the domestic strategies of each developing
country. Moreover, whether there is fundamental impact on developing countries or not, the
legal enforcement of the chapter should be considered. The newest PTAs from both the US
and EU seems to have legal enforcement that may stem from international and domestic
enforcement, such as the Environment and IP chapters. Hence, developing countries should
proceed with caution when negotiating these chapters. Developing countries may strive to opt
out of international and domestic enforcement from chapters with which they are not ready to
comply. If possible, the international and domestic enforcement should be shifted to mutual
cooperation or to be reviewed by a PTA committee without compensation or retaliation. It
can be said that the WTO Plus and Extra provisions affect parties that have adopted only the
WTO standards. It can be said that the WTO Plus and Extra provisions certainly affect the
parties that have adopted only the WTO standard. As a result, developing countries which
have to comply with the WTO Plus and Extra provisions need to reform their domestic
regulations and policies. The companies and individuals that have competitive power in the
market are not affected. The government in developing countries needs to provide support in
a form that does not violate the WTO and PTA’s provisions to farmers and small and medium
companies such as research and development (R&D). Moreover, the government has to make
sure that they understand the obligations under the PTAs clearly in order to avoid violation.
The PTA is a contractual agreement which the rights and obligations of the parties depend on.
The agreement is not rigid, as evinced by the fact that the EU and US regimes have different
provisions. As a result, in case developing countries need to negotiate WTO-Plus or WTO-
Extra provisions, there are many ways to waive the obligation that developing countries
cannot abide by. The first solution is a transitional period. Since the implementation of the
high standard of the EU and US’s PTAs is difficult for developing countries, sometimes
calling for a reformation of domestic law and regulations, developing countries may ask for a
period of time by which they think they can properly adjust to the obligation. For example, in
Annex 16-A of the chapter competition policy chapter in the TPP agreement, Brunei
Darussalam has a period of no longer than ten years after the date of entry into force of this
agreement to comply with the obligation in this chapter. The second solution is asking for
non-conformity or exception in form of an annex or exception in the specific chapter. The
38
annex is normally a part of the trade agreement. Thus, if a party cannot conform to part of the
principle obligation in the agreement or wants to reserve some limitation or condition, the
party may state that in the annex. For example, the STE chapter in the TPP agreement
requires the party to apply non-discrimination treatment with respect to the commercial
activity to other parties’ STEs, but Australia states in the Annex IV that all existing and
future state-owned enterprises at the central level of the Australian government may accord
more favourable treatment to indigenous persons and organizations in the purchase of goods
and services. A regional or multilateral agreement such as the TPP agreement comprises
many parties of various standards. Thus, it is possible that a party may request an
understanding that is not stated in the agreement. Apart from the solution in developing
countries themselves, international organizations such as the United Nations Conferences on
Trade and Development (UNCTAD), which aims at reducing and eventually eliminating the
trade gap between developed and developing countries, can participate to help developing
countries negotiate PTAs with developed countries. International organizations may provide
suggestions or R&D to developing countries in order to be a guideline in the face of a
negotiation.
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