From poverty to power - Oxfam-Québec

5 THE INTERNATIONAL SYSTEM TRADINGHistorically, IP legislation has followed development: as countrieshave grown richer, and as they evolve from imitation to innovation,they have introduced more stringent IP laws. Chemical substancesremained unpatentable until 1967 in West Germany, 1968 in theNordic countries, 1976 in Japan, 1978 in Switzerland, and 1992 in Spain,by which time these countries’ chemical industries had establishedthemselves. 66 This pattern has been broken over the past 20 years by acombination of new institutions such as the WTO and regional tradeagreements and an extraordinarily aggressive campaign by largecorporations and their home-country governments.Global IP legislation also imposes a growing financial burden onpoor countries, through the costs of introducing largely irrelevant orunsuitable IP laws to comply with the WTO and through the drain ofspiralling royalties to the owners of patents – almost always richworldTNCs. In 2005, developing countries paid out a net $17bn inroyalty and licence fees, largely to companies in the industrialisednations. The USA was the big winner from the system, earning a net$33bn, considerably more than its overseas aid budget. 67The spread of potentially damaging ‘one size fits all’ internationalIP rules took off in the 1980s, when a number of pharmaceutical andother companies scored the spectacular coup of persuading the USdelegation to include them in the Uruguay Round negotiations thatled to the creation of the WTO. Industry lobbyists overwhelmedopposition from the secretariat of the GATT (which hosted the talks)to adding IP to the agenda. The agreement on Trade-Related Aspectsof Intellectual Property Rights (TRIPS) introduced a global IP system,including a minimum patent protection period of 20 years, along withprotection for industrial designs, trademarks, copyrights, and otherIP rights. Unlike several other WTO agreements, the TRIPS rulesapplied even to the poorest developing countries, although they weregiven longer deadlines for implementation.Nowhere have TRIPS been more controversial than in the drugsindustry. Each year more than ten million people in developingcountries perish from infectious and parasitic diseases, most of whichcould be treated with existing drugs. 68 Although there are otherimportant factors behind the death toll, such as dilapidated healthservices, high drug prices are a key barrier to saving lives.327