Big Business Gearing Up to Defend Protectionism Against UN Climate Negotiators

The battle over intellectual property
rights is likely to be one of the most important of this century. It
has enormous economic, social and political implications in a wide
range of areas, from medicine to the arts and culture - anything where
the public interest in the widespread dissemination of knowledge runs
up against those whose income derives from monopolising it.

Now
it appears that international efforts to slow the pace of worldwide
climate disruption could also run up against powerful interests who
advocate a fundamentalist conception of intellectual property

According
to Inside US Trade, the US chamber of commerce is gearing up for a
fight to limit the access of developing countries to environmentally sound technologies (ESTs). They fear that international climate change negotiations, taking place under the auspices of the United Nations, will erode the position of corporations holding patents on existing and future technologies.

Developing
countries such as Brazil, India and China have indicated that if - as
expected in the next few years - they are going to have to make
sacrifices to reduce carbon emissions, they should be able to license some of the most efficient available technologies for doing so.

Big
business is worried about this, because they prefer that patent rights
have absolute supremacy. They want to make sure that climate change
talks don't erode the power that they have gained through the World
Trade Organisation.

The WTO
is widely misunderstood and misrepresented as an organisation designed
to promote free trade. In fact, some of its most economically important
rules promote the opposite: the costliest forms of protectionism in the
world.

The WTO's rules on intellectual property (Trade-Related Aspects of Intellectual Property,
or Trips) are the most glaring example. These are designed to extend
and enforce US-style patent and copyright law throughout the world.

Patents
are monopolies, a restriction on trade that creates inefficiency in
exactly the same way that tariffs, quotas or other trade barriers do.
The economic argument for relaxing patent rules is therefore the same
as that for removing trade barriers, only times 50 or 100 or even 1,000
- since the average tariff on manufactured or agricultural goods is
quite small compared to the amount by which patent monopolies raise the
price of a pharmaceutical drug.

These restrictions cost US
consumers an estimated $220bn a year compared to competitive pricing -
many times the gains from trade liberalisation that we could even hope
to get from a successful completion of the current Doha round of
negotiations in the WTO that began in 2001 in Qatar.

It took
years of struggle by non-governmental organisations to loosen the big
pharmaceutical companies' stranglehold on the WTO, to the point where
the organisation's 2001 Declaration on Trips and Public Health
reaffirmed the rights of member countries to produce generic versions
of patented drugs in order to promote public health.

But this was
just a first step, and seven years later these rights have been applied
almost exclusively to anti-retroviral drugs for the treatment of Aids,
in just a handful of developing countries. The power of the
pharmaceutical companies, with their governments in the United States and Europe as advocates, still keeps life-saving medicines priced out of reach for hundreds of millions of the world's poor.

The
legal procedure that has been used - although very infrequently - to
allow for the production of generic drugs for the treatment of Aids is
called a compulsory license. This means that a government can legally
authorise the production of a generic version of a drug that is
currently under patent, provided that this is done for public health
purposes. A royalty is paid to the patent holder, but this is generally
not very expensive.

Developing countries such as Brazil, India
and China want to make sure that such possibilities are open for new
environmentally sound technologies, eg in the areas of renewable
energy, that might enable them to meet future targets for reducing
carbon emissions. A Brazilian official noted that his country had only
issued one compulsory license, for the anti-Aids drug Efavirenz,
produced by Merck.

But big business doesn't want to take any chances. Today they are launching a new coalition called the Innovation, Development and Employment Alliance
(Idea). (You've got to love the Orwellian touch of those marketing
consultants). Members include General Electric, Microsoft and Sunrise
Solar. They will reportedly also be concerned with intellectual
property claims in the areas of healthcare and renewable energy.

For
the intellectual property fundamentalists, the income claims of patent
holders are property rights, seen as analogous to a homeowner's right
to her house. But the framers of the US constitution (article I, section 8) didn't it see that way, and neither, for the most part, have US courts.

Our
legal system has long taken into account that protection for patent and
copyright monopolies must reflect an important tradeoff between
rewarding innovation and creativity, on the one hand, and allowing for
the dissemination of knowledge and the development of new technologies.

The
WTO rules, driven by the protectionist interests of powerful
corporations, have gone far to advance the fundamentalist view of
intellectual property, at the expense of the world's economy and public
health. Now our corporations fear that negotiators at the United
Nations, under the UN Framework Convention on Climate Change, might not
share these fundamentalist views, especially when the future of the
planet is at stake.

Ten years ago environmentalists played a
major role in exposing the built-in prejudice of WTO rules, which tend
to strengthen commercial interests against environmental regulation. A
tipping point was reached when they helped organise large-scale
protests that shut down the WTO negotiations in Seattle in 1999,
raising alarm bells and building opposition worldwide.

Environmental
awareness and a sense of urgency with regard to climate change are much
more broadly shared today. The Obama administration should take note of
this and place itself squarely on the side of promoting the spread of
environmentally sound technologies.