Trade Policy Note Final-rev08 - Development

copyright protection may be extended beyond the limits established in TRIPS. Data
exclusivity provisions effectively extend patent protection for periods in excess of the
TRIPS limits
(b) Investment provisions may prohibit performance requirements permitted by the
WTO TRIMs Agreement, e.g. transfer of technology, export performance, or those on
investment in services which are actually encouraged by the WTO GATS Agreement
as a means of strengthening the service sector of developing countries. Investment
chapters usually provide for across the board national treatment and right of
establishment undermining the commitments that have been carefully negotiated in
GATS. This is most significant when “Investment” chapters provide for the “absolute
right to transfer funds”, thus undermining the prudential provisions built into financial
service commitments in GATS. “Expropriation” may be interpreted in such a way that
private investors can challenge states and obtain compensation for opportunities lost
due to action by governments at different levels to protect the environment or attain
other social goals. Dispute settlement provisions may permit investors to seek
settlement outside of the State’s domestic courts through alternative dispute resolution
mechanisms, in particular but not limited to binding international arbitration.
(c) The cumula tive effect of FTA chapters on “Investment”, “Trade in Services”, and
“Electronic Commerce” may undermine government measures to promote social and
cultural goals (e.g. universal coverage, cultural integrity etc.). Negative lists for trade
in services leave no policy space to deal with new technologically advanced services
when they emerge. Particular attention should be given to the cultural sector where
the combination of negative lists for services and provisions aimed at the free
movement of electronic commerce (including digital products) can result in
undermining reservations made in GATS schedules to preserve the “cultural
exception” 116 .
(d) Safeguards on agricultural trade can be subject to a phase out period after which
total liberalization applies. Liberalization can take the form of a staged increase of
TRQs to a point where no limits apply. This is often combined with a phase out of the
over quota tariff rate. 117 Attention should be given to incorporating such safeguards
into FTAs using the same criteria as used in the WTO, in order to protect food
security, livelihoods and promote rural development. Legislation for safeguard
measures (SSM) e.g. trigger mechanisms, should be in place before entering into FTA
negotiations. The issue of whether an agreement in the WTO on on SSM and SP
would prevail over existing FTAs has not been resolved.
(g) Tariff protection on sensitive products may not be permitted indefinitely, but
should be subject to a longer phase out period.
(h) Obligations on Government Procurement are included. These can have the
same structure as the WTO plurilateral agreement, but are applied on a
discriminatory basis and cover both goods and services.
116 See Bernier, Ivan , Recent FTAs of the United States as Illustrations of their New Strategy Regarding
the Audio-Visual Sector (2004) (www.mcc.gouv.qc.ca/international/diversiteculteiurelle/eng/pdf/conf_seoul_ang_2004.pdf
).
117 In the Peru USA Agreement, for example, safeguards in the form of a “snap back” to MFN tariffs
are triggered by imports exceeding the TRQ .by a certain percentage.
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