Journal of International Economic Law, 1–15 doi:10.1093/jiel/jgq016
WHEN WILLTHE PROTOCOL AMENDING THE TRIPS AGREEMENT ENTER INTO FORCE? Matthew Kennedy*
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The Protocol Amending the TRIPS Agreement (or the TRIPS Amendment) is the first and, so far, only amendment of a core WTO agreement. It was intended to provide an expeditious solution to the difficulties that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face in making effective use of compulsory licensing under the TRIPS Agreement. The number of WTO Members that have accepted the Protocol since its adoption in December 2005 is far fewer than the total required for the amendment to enter into force. The number of further acceptances required for the amendment to take effect is no longer a straightforward matter because the European Union has deposited an instrument of acceptance of the Protocol while its individual Member States have not. The treatment of the EU Member States as regards acceptance of the TRIPS Amendment has implications for future amendments of WTO agreements, such as the eventual results of the Doha Round. I. INTRODUCTION
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The Protocol Amending the TRIPS Agreement (or the TRIPS Amendment)1 contains the first and, so far, only proposed amendment of a core WTO agreement that has been submitted to WTO Members for acceptance (i.e. ratification).2 It was intended to provide an expeditious solution to the difficulties that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face in making effective use of compulsory licensing under the TRIPS Agreement. Despite the sense of urgency in some quarters that preceded the adoption of the Protocol in December 2005, the number of WTO Members that have * The author was formerly a senior lawyer in the WTO Secretariat and a Secretary of the Council for TRIPS. E-mail:
[email protected]. He gratefully acknowledges comments by Jayashree Watal and Lothar Ehring on an earlier draft of this article. 1 The Protocol is attached to the General Council Decision on Amendment of the TRIPS Agreement, WT/L/641, adopted on 6 December 2005. The TRIPS Amendment itself is annexed to the Protocol. 2 The Protocol (2001) Amending the Annex to the Agreement on Trade in Civil Aircraft amended a plurilateral agreement.
Journal of International Economic Law ß Oxford University Press 2010, all rights reserved
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accepted the Protocol since that time is far fewer than the total required for the amendment to enter into force. The determination of the date on which the Protocol will take effect (and for which Members) is no longer a straightforward matter, which has implications for future amendments of WTO agreements.
II. PACE OF ACCEPTANCES SO FAR
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The TRIPS Amendment provides for a system of compulsory licensing of pharmaceutical products solely for export, something that the TRIPS Agreement prohibits. The Amendment is based on a 2003 Waiver3 that was adopted following an instruction given in the 2001 Doha Declaration on the TRIPS Agreement and Public Health.4 The TRIPS Amendment aims to create a permanent basis for the solution agreed in the Waiver in 2003, by inserting an Article 31bis and Annex into the TRIPS Agreement setting out further provisions allowing use of the subject matter of a patent without authorization of the right holder. The Amendment specifically provides that obligations under Article 31(f) and (h) of the existing Agreement will not apply in certain circumstances. Given that the Amendment alters the rights and obligations of Members and is not subject to any exceptional procedure,5 the applicable procedure for its entry into force is the one set out in Article X:3 of the WTO Agreement, as confirmed by Article 4 of the Protocol.6 Article X:3 provides that amendments ‘shall take effect for the Members that have accepted them upon acceptance by two thirds of the Members and thereafter for each other Member upon acceptance by it.’ The TRIPS Amendment is the first time that this procedure has been used in the WTO. Prior to adoption of the Protocol in 2005, various WTO Members had called for ‘urgent attention’ to be given to the amendment of the TRIPS Agreement to incorporate the system in the Waiver.7 There appear to have been some expectations that, once adopted, the Protocol would be ratified at 3
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General Council Decision on Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, WT/L/540 and Corr.1, adopted on 30 August 2003, (the Waiver). Doha Ministerial Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/ DEC/2, adopted on 14 November 2001. The TRIPS Amendment does not alter Article 4 of the TRIPS Agreement (either expressly or impliedly), hence it is not subject to the unanimous acceptance procedure in Article X:2 of the WTO Agreement. Nor does it merely serve the purpose of adjusting to higher levels of intellectual property protection achieved in WIPO or elsewhere under Article 71.2 of the TRIPS Agreement, hence it cannot be exempt from a further formal acceptance process under Article X:6 of the WTO Agreement. See also Para 3 of the General Council Decision adopting the Protocol, above n 1. For example, see the Chairperson’s opening remarks at the meeting of the Council for TRIPS held on 14 and 15 June 2005, IP/C/M/48, para 110.
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a speed similar to that with which the Doha Declaration, and later the Waiver, had been negotiated and adopted. As things have turned out, the pace of acceptances of the Protocol has been slower than initially foreseen.8 During the initial period of acceptance of 2 years, only 14 Members deposited instruments of acceptance, including the European Union.9 The period for acceptance was then extended for a little over 2 years,10 during which time only 13 more Members deposited instruments of acceptance. In December 2009, the period for acceptance was extended for a further period of 2 years,11 and three more Members have deposited instruments of acceptance since that time. In four and a half years, only 30 instruments of acceptance have been deposited out of a possible maximum of 153. The Members that have accepted the Protocol so far include both developed and developing country Members and one least-developed country Member.12 The acceptance period is now due to expire on 31 December 2011, but further extensions are possible.13 Several factors may explain the difference between the tone of discussions prior to adoption of the Protocol and the subsequent pace of acceptances. In terms of form, the provisions of the Amendment replace those of the Waiver, which remains in place for each Member until the Amendment takes effect for that Member.14 It is understood that the compulsory licensing system currently permitted under the Waiver would not lapse even if the Amendment did not enter into force. Thus, there is no sense of urgency to bring the Amendment into force, and even less when one considers that the period for acceptance can be extended. Second, the TRIPS Amendment is a stand-alone instrument that is not ‘packaged’ in a broad set of negotiating results that might give ratification a higher priority at the national level, unlike the TRIPS Agreement itself that formed part of the results of the Uruguay Round. Third, Members may prefer to implement the system in their domestic legal order before notifying acceptance of the Amendment,
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This is recited as the justification for the Decisions to extend the period for acceptance. This article generally refers to the ‘European Union’ except for the purposes of quotation. Article XI:1 of the WTO Agreement provided for membership by the ‘European Communities’; in November 2007 that Member accepted the TRIPS Amendment in the name of the ‘European Community’ (below n 24); and in November 2009 after the entry into force of the Treaty of Lisbon it informed the WTO by note verbale that the ‘European Union’ had replaced and succeeded the ‘European Community’, WT/L/779. General Council Decision on Amendment of the TRIPS Agreement—Extension of the period for the acceptance by Members of the Protocol Amending the TRIPS Agreement, WT/L/711, adopted on 18 December 2007. General Council Decision on Amendment of the TRIPS Agreement—Second Extension of the period for the acceptance by Members of the Protocol Amending the TRIPS Agreement, WT/L/785, adopted on 17 December 2009. Zambia, an LDC Member, accepted the amendment on 10 August 2009. See 2009 Extension Decision, above n 11. Para 11 of the Waiver, above n 3.
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even though the terms of this particular Amendment would allow these steps to be taken in either order. Implementation to enable use of the system as an exporter or importer generally entails amendment of legislation, which requires time and resources. In terms of substance, the system permitted by the Waiver was designed to respond to a particular set of circumstances that may still not have occurred. The impetus for the creation of the system was the expiry of the additional transitional period for product patent protection under Article 65.4 of the TRIPS Agreement. The concern was, and is, that expiry of the additional transitional period would result in patent protection for pharmaceutical products in all countries with relevant manufacturing capacity and willing to export a predominant part of production under a compulsory licence. Five years later, generic medicines remain available outside the patent system, including some first- and second-line antiretroviral drugs used to treat HIV/AIDS. The existing flexibilities of the TRIPS Agreement have been used in negotiations on the price of certain patented medicines, while other medicines have been produced under voluntary licensing or provided through donor financing. Export of the non-predominant part of pharmaceutical production under a compulsory licence is also already allowed under the existing rules of the TRIPS Agreement, without recourse to the Waiver. In terms of practice as well as substance, the system permitted by the Waiver has barely been used. Only one set of notifications has been received, in 2007, to allow a Canadian company to manufacture solely for export, and Rwanda to import, two shipments of generic first-line antiretroviral drugs for the treatment of HIV infection.15 No WTO Member has notified its intention to use the system as an importer16 (although least-developed country Members are not required to make such a notification17). This has led some to question whether the system is an appropriate response to the circumstances that it was intended to address.18 At the Council for TRIPS’ meeting in November 2009, it was agreed that the Chairperson would hold a round of informal consultations on the operation of the system.19 At that meeting and the following meeting in March 2010, a number of developing country Members expressed the view that the system might not be an effective
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See notifications in documents IP/N/9/RWA/1 and IP/N/10/CAN/1. WTO Secretariat, ‘Notifications by importing WTO Members’, http://www.wto.org/english/ tratop_e/trips_e/public_health_notif_import_e.htm (visited 26 May 2010). Para 1(b) of the Waiver, above n 3. See, for example: Me´decins Sans Frontie`res: ‘Neither Expeditious Nor a Solution: the WTO August 30th Decision is Unworkable’ (Prepared for the XVI International AIDS Conference, Toronto, August 2006), http://www.doctorswithoutborders.org/news/hiv-aids/WTO_chretien .pdf (visited 26 May 2010). See the minutes of the meeting, IP/C/M/61, paras 135–36.
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solution.20 These concerns also dissipate any potential sense of urgency to bring the Amendment into force. Lastly, the Waiver may actually create a disincentive to accept the Amendment due to a gap between the two instruments. The Waiver provides that it ‘shall terminate for each Member on the date on which an amendment to the TRIPS Agreement replacing its provisions takes effect for that Member’.21 The TRIPS Amendment can take effect only for those Members that have accepted it and not for each other Member until it accepts, in accordance with Article X:3 of the WTO Agreement. Consequently, after the Amendment enters into force, the Members that have accepted the Amendment can no longer rely on the Waiver, nor can they rely on the Amendment vis-a`-vis the other Members that have not accepted it. There can be up to 51 other Members that have not accepted the Amendment after its entry into force, based on the current total number of Members. III. HOW MANY MORE ACCEPTANCES ARE NEEDED?
The TRIPS Amendment will enter into force upon acceptance by ‘two thirds’ of ‘the Members’.22 The number of further acceptances needed to reach two-thirds depends on the number of Members at the relevant point in time and how one counts the number of Members that have already accepted. The denominator in the two-thirds formula is comprised of ‘the Members’. Article 3 of the Protocol provides that it is open to acceptance by ‘Members’, without limitation. It does not refer to WTO Members as at the time of its adoption nor otherwise exclude Members that accede to the WTO afterwards. Article 4 of the Protocol refers to the provisions of paragraph 3 of Article X of the WTO Agreement, which gives no other explanation of the term ‘the Members’. Therefore, the denominator refers to the total number of Members as they stand from time to time. There are now 153 Members of the WTO; other countries are in the process of accession, so the minimum number of acceptances required for entry into force is likely to increase. The numerator in the formula is comprised of ‘two thirds’ of the Members, these being the two-thirds ‘that have accepted’ the Amendment. Two-thirds of the current total of 153 Members is 102 Members. So far, 30 instruments of acceptance have been deposited.23 These include one instrument of acceptance deposited by the European Union, which notified 20
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Ibid, under Agenda Item G, and WTO Secretariat, ‘Members ask, ‘‘Is the Par. 6 system on intellectual property and health working?’’ ’, http://www.wto.org/english/news_e/news10_e/ trip_02mar10_e.htm. (visited 26 May 2010). Para 11 of the Waiver, above n 3. See above n 6 and accompanying text. This total includes the instrument of acceptance received from the Netherlands for the Netherlands Antilles and Aruba (below n 32).
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acceptance of the Amendment ‘by the European Community’ and confirmed that ‘the Protocol will be binding on the Member States of the European Union’. The instrument was signed by the Secretary General/High Representative and the President of the Council of the European Union.24 The European Commission issued a statement describing its instrument of acceptance as that of the European Union and did not mention the EU Member States.25 However, a spokesperson for the then-EU Trade Commissioner, Peter Mandelson, was quoted as saying that the European Union’s acceptance would count as 28 ratifications: those of the European Union’s 27 Member States and that of the European Union as a whole.26 Upon deposit of an instrument of acceptance, the WTO treaty depositary (who is the WTO Director-General) circulates a notification informing Members as to which Member has accepted which protocol, and when that protocol will enter into force for that Member. For example, when China deposited its instrument of acceptance of the Protocol Amending the TRIPS Agreement in November 2007, the WTO Director-General informed Members that ‘the Government of China’ had accepted the Protocol and that the Protocol would enter into force for ‘China’ upon acceptance of the Protocol by two-thirds of the Members.27 However, when the European Union accepted the Protocol, the WTO treaty depositary departed from his usual practice and issued a notification of acceptance that does not state which Member or Members accepted, nor when the Protocol will enter into force for that Member or Members. Instead, this notification states that the ‘European Communities deposited an instrument’ (clearly it did) and sets out the text of the instrument without drawing any conclusions regarding its effect. The notification then reiterates the applicable procedure for entry into force of the Protocol in general. Since that time, the WTO Secretariat note on the status of acceptances has ceased to indicate the total number of Members that have accepted the Protocol. The note originally indicated the total number of such Members at a given time but now the periodic updates only list the Members that have notified the acceptance of the Protocol by name, including the ‘European Communities’, together with the text of the European Union’s acceptance set out in full28 unlike every other Member’s acceptance (except for the 24 25
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WT/Let/608, dated 10 December 2007. European Commission, ‘Access to medicines: European Union accepts amendment to WTO Agreement on Intellectual Property’, http://trade.ec.europa.eu/doclib/docs/2007/november/tra doc_136951.pdf. (visited 26 May 2010). David Cronin, ‘EU Acceptance of TRIPS Health Amendment Adds 28 Members’, Intellectual Property Watch, http://www.ip-watch.org/weblog/2007/12/01/eu-acceptance-oftrips-health-amendment-adds-28-members/ (visited 26 May 2010). WT/Let/607, dated 5 December 2007. Contrast the October 2007 update of the note, IP/C/W/490/Rev.1, with the March 2008 update, IP/C/W/490/Rev.2, and subsequent revisions.
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Netherlands, considered below). The WTO website follows the same approach.29 The Chairperson of the Council for TRIPS no longer informs Members during the annual review of the Waiver of the total number of Members that have accepted the Protocol.30 The problem stems from the fact that the EU Member States separately accepted the WTO Agreement, including the TRIPS Agreement, but they did not separately accept the Protocol Amending the TRIPS Agreement. This is related to developments in EU law during the intervening period regarding the allocation of competence between the European Union and its Member States. If the European Union’s acceptance constitutes acceptance by the European Union only, and not an acceptance by each of the EU Member States, then for the purposes of the two-thirds formula it counts as acceptance by one WTO Member only. On the other hand, if the European Union’s acceptance were to indicate acceptance by both the European Union and its Member States, it would indeed count as acceptance by 28 WTO Members, one more than the 27 EU Member States. This is because the specific rule that the European Union plus its Member States shall not exceed the number of the Member States of the European Union only applies to voting under Article IX of the WTO Agreement. It is not part of the procedures on amendments in Article X.31 The lack of clarity regarding the number of Members that have accepted the TRIPS Amendment was compounded by the Netherlands’ deposit of an instrument of acceptance in January 2008. This instrument, from the Foreign Minister of the Netherlands, declared that the Netherlands accepted the Protocol for the Netherlands Antilles and Aruba, two territories that are part of the Kingdom of the Netherlands but not part of the European Union. The WTO Director-General did not issue a formal notification of acceptance after receiving this instrument but described it in generic terms as a ‘communication’ and set out its text in full.32 The WTO Secretariat note on the status of acceptances follows the same approach.33 The list of acceptances on the WTO website does not mention it.34 It is not clear how the WTO treaty depositary will count this instrument of acceptance for the purposes of entry into force of the TRIPS Amendment. If the Netherlands is not counted as a 29
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WTO Secretariat, ‘How many Members have accepted the amendment?’, http://www.wto .org/english/tratop_e/trips_e/amendment_e.htm (visited 26 May 2010). Contrast the Chairperson’s statements during the Council for TRIPS’ Annual Review of the Waiver in 2006, IP/C/42, Annex, para 3, and 2007, IP/C/46, Annex, para 4, with the statements in 2008, IP/C/49, Annex, para 4 and 2009, IP/C/53, Annex, para 3. See footnote 2 to the WTO Agreement. WT/Let/611, dated 5 February 2008. See the February and October 2009 updates of the note, IP/C/W/490/Rev.4 and Rev.5, respectively. Above n 29.
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Member that is already covered by the European Union’s acceptance, then this instrument should be counted as an acceptance by a separate Member even though its effects are limited to part of Dutch territory only. However, if the Netherlands is counted as a Member that has accepted by means of the European Union’s acceptance, then the instrument of acceptance for the Netherlands Antilles and Aruba should be considered a territorial extension of an existing acceptance. Consequently, the total number of acceptances of the TRIPS Amendment depends upon how to count correctly the Members to which the acceptances received to date apply. If one counts the European Union’s acceptance as an acceptance by one Member only, the current total number of Members having accepted the TRIPS Amendment is only 30. This is less than one-third of the 102 Members whose acceptances are currently needed for the TRIPS Amendment to enter into force. However, if one counts the European Union’s acceptance as an acceptance by 28 Members, the total number of Members having accepted the TRIPS Amendment would be 56, just over half of the 102 currently needed to reach acceptance by two-thirds of the Members, four and a half years after that Amendment was adopted.
IV. WHICH WTO MEMBERS ARE COVERED BY THE EUROPEAN UNION’S 20
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ACCEPTANCE?
The procedure for acceptance of an amendment of most WTO agreements (as distinct from the procedure for entry into force) is set out in Article X:7 of the WTO Agreement, which requires that ‘[a]ny Member accepting an amendment . . . shall deposit an instrument of acceptance with the DirectorGeneral of the WTO within the period of acceptance specified by the Ministerial Conference’. The text of Article X:7 does not set out the form or content of an instrument of acceptance. However, it does require the deposit of an instrument, in contrast with Article XIV:1 of the WTO Agreement which allowed acceptance of that Agreement ‘by signature or otherwise’, and in contrast with Article X:8 of the WTO Agreement which provides that amendments of two agreements shall take effect for all Members upon approval by the Ministerial Conference, with no further acceptance process.35 Article 2(1)(b) of the Vienna Convention on the Law of Treaties defines ‘acceptance’ (like ‘ratification’) as ‘the international act so named whereby a State establishes on the international plane its consent to be bound by a treaty’. From this it can be deduced that the instrument of acceptance
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Article X:8 of the WTO Agreement applies to amendments to the Dispute Settlement Understanding and the Trade Policy Review Mechanism.
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(or ratification) must give clear and unambiguous expression to that intention.36 Further, according to international practice, an instrument of ratification (or acceptance) must be signed with full powers.37 The European Union has deposited an instrument of acceptance of the TRIPS Amendment and the EU Member States have not.38 The European Union’s instrument of acceptance did confirm that ‘the Protocol will be binding on the Member States of the European Union’ but the WTO has no notice of the EU Member States’ views of their respective rights and obligations under the TRIPS Amendment vis-a`-vis the European Union or other WTO Members, let alone a clear and unambiguous expression from them of their consent to be bound by that Amendment. Nor is there any indication that the European Union has accepted the amendment in simultaneous legal representation of the EU Member States, which are subjects of public international law in their own right. The specific rule in footnote 2 to the WTO Agreement regarding the number of votes of ‘the European Communities and their Member States’ does not apply to an amendment procedure and, in any case, that specific rule only explains the way to count the total number of their votes to ensure that they are not overrepresented. If one attempted to apply this rule by analogy to an amendment procedure, it would not transform the acceptance of one Member into the acceptances of 27 others. The requirement to deposit an instrument or instruments of acceptance that bind the EU Member States vis-a`-vis other WTO Members under an amendment would remain. The European Union’s instrument of acceptance expressly refers to Article 300(7) of the Treaty Establishing the European Community as the basis for its confirmation that the Protocol will be binding on the EU Member States. In other words, it is binding on the EU Member States as a matter of the internal law of the European Union. At first sight, it is not apparent how this could have a legal effect on the plane of international law in the relationship between, on the one hand, the EU Member States in their capacity as WTO Members with full rights and obligations and, on the other hand, WTO Members outside the European Union. The public international law principle of pacta tertiis nec nocent nec prosunt, expressed in Article 34 of the Vienna Convention as ‘[a] treaty does not create either obligations or rights for a third State without its consent’, suggests that the legal relationship between EU Member States and other WTO Members would remain governed by the unamended TRIPS Agreement. The fine print of the TRIPS Amendment itself may have a bearing on this issue. In footnote 3 to the Amendment, the list of WTO Members opting out 36
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Anthony Aust, Modern Treaty Law and Practice (Cambridge: Cambridge University Press, 2000) 86. Ibid, 85. With the exception of the Netherlands for the Netherlands Antilles and Aruba, above n 32.
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of the compulsory licensing system as importing Members includes ‘the European Communities with, for the purposes of Article 31bis and this Annex, its Member States’ (emphasis added) rather than ‘and’ its Member States or ‘on behalf of’ them. This unusual choice of conjunction appears designed, on the one hand, to mention the EU Member States clearly enough to disentitle them from using the compulsory licensing system as importing Members in future without, on the other hand, implying that the EU Member States possessed competence to opt out of the system, had they wished to do so, or implying that the European Union legally represented the EU Member States. There would have been no need to mention the EU Member States if other WTO Members had been satisfied that binding the European Union itself was sufficient to bind the EU Member States as well and thereby prevent them from using the system as importers. Therefore, there seems to be no reason at present to count the EU Member States as ‘Members that have accepted’ the TRIPS Amendment. On this view, the European Union’s acceptance would count as acceptance by one WTO Member only. V. WHAT ARE THE CONSEQUENCES FOR TRIPS IF THE EU MEMBER
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At the current pace of acceptances, the TRIPS Amendment is unlikely to enter into force in the short term no matter which way one counts the Members that have accepted it. However, a failure to clarify the Members to whom the European Union’s acceptance applies will create uncertainty as regards the date of entry into force of the TRIPS Amendment because it is unclear how the WTO treaty depositary will calculate that the necessary minimum number of Members has accepted for the Amendment to take effect. That is not the only issue of concern. If the European Union’s acceptance were considered inadequate to indicate acceptance by the EU Member States, and the EU Member States were not to accept the TRIPS Amendment at all because, for example, they are prevented from doing so by EU law, the 72 further acceptances currently required by Article X:3 of the WTO Agreement to reach acceptance by two-thirds of the WTO Members would have to come from the pool of the 97 other Members that have not already accepted. This would make entry into force of the TRIPS Amendment considerably more difficult. In fact, it increases the likelihood that the TRIPS Amendment will never enter into force because more than half the necessary blocking minority to prevent entry into force of an amendment is already assembled. In this scenario, the EU Member States would not become party to the Amendment, and the Waiver would remain in force for them indefinitely.
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If the EU Member States39 and 26 or more other WTO Members do not become party to the Amendment, the Waiver will remain in force for all Members indefinitely. Yet WTO waivers are supposed to terminate. Article IX:4 of the WTO Agreement provides that a waiver decision shall state ‘the date on which the waiver shall terminate’ and provides for an annual review. In the present case, the Waiver does not terminate on a specific calendar date but rather provides that it ‘shall terminate for each Member on the date on which an amendment to the TRIPS Agreement replacing its provisions takes effect for that Member’.40 An indefinite waiver would eventually lead the validity of this conditional termination date to be questioned, thereby generating further uncertainty. Worse, if and when the Amendment does take effect, the EU Member States would for their conduct be covered by the Waiver but the other WTO Members that have accepted the Amendment would be unable to rely either on the Waiver41 or on the Amendment vis-a`-vis the EU Member States (as discussed above), although they could rely on the Amendment vis-a`-vis the European Union. This gap between the Waiver and the Amendment might complicate other WTO Members’ attempts to limit EU Member States’ nationals’ patents under the system as permitted by the Waiver and the Amendment.42
VI. WHAT ARE THE WIDER IMPLICATIONS FOR THE WTO?
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Much of the subject matter covered by the WTO Agreement lies within the exclusive competence of the European Union.43 Any amendments to WTO provisions governing such subject matter will lie outside the competence of the EU Member States under EU law which may lead to a situation, once again, in which the EU Member States do not deposit separate instruments of acceptance of such amendments. The results of the Doha Round will almost certainly include amendments to WTO agreements. These amendments may, unlike the results of the Uruguay Round, cover areas within the competence of the European Union only and not of the EU Member States. In that sense, the acceptance procedures followed for the TRIPS 39 40 41 42
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Other than the Netherlands in respect of the Netherlands Antilles and Aruba. Para 11 of the Waiver, above n 3. Ibid. The Panel in European Communities—Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs considered the meaning of nationality, including EU nationality, for the purposes of determining the beneficiaries of protection under Article 1.3 of the TRIPS Agreement. See the Panel Reports, WT/DS174/R at paras 7.141–7.150 and WT/ DS290/R at paras 7.191–7.200, both adopted on 20 April 2005 without appeal. ECJ, Opinion 1/94, Community Competence to Conclude Certain International Agreements (1994) ECR I-5276, in relation to the Treaty Establishing the European Community as it existed in 1994. The scope of the European Union’s commercial policy has been modified since that Opinion.
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Amendment provide a precedent for the entry into force (or not) of the results of the Round. If the EU Member States, due to arrangements among themselves that are binding only between them, are bound by the European Union’s acceptance of certain WTO amendments but, at the same time, the EU Member States lack competence under EU law to accept those WTO amendments in their own right and hence deposit instruments of acceptance (an issue that is not explored here), then the EU Member States might never be able to satisfy the procedure in Article X:7 of the WTO Agreement with respect to those amendments, even though they would effectively be bound to apply the amendments by virtue of internal EU law. This would, in practice, raise the bar to entry into force of such WTO amendments much higher than two-thirds of the Members, closer to five-sixths, thereby conditioning the entry into force of such amendments upon acceptance by all but a small minority of WTO Members plus the EU Member States. Should the European Union continue to expand its membership, the bar could rise even higher. Amendments under Article X:2 of the WTO Agreement, that take effect only upon acceptance by all Members, could never enter into force. This situation did not arise in the GATT. The EEC Member States that were Contracting Parties to the GATT also separately accepted the 1965 GATT amending protocol44 as well as GATT tariff protocols. While the EEC Member States did not accept certain agreements concluded within the GATT framework (that the EEC did accept)45, those agreements were not amendments of an agreement that the EEC Member States had accepted earlier. The WTO amendment procedures do not make any special provision for the situation in which a WTO Member lacks competence to deposit an instrument of acceptance of an amendment of a WTO agreement. While the WTO Agreement’s membership provisions allowed the European Communities to become an original Member of the Organization,46 the same Agreement made no special provision for the possibility of exclusive allocation of competence to the European Communities or to its Member States with respect to particular WTO subject matter, nor for the possibility that such allocation could change over time. This did not matter in practice as long as the WTO Agreement itself, and any package of amendments, covered some areas within the competence of the European Communities and some areas within the competence of its Member States, and both could accept the entirety of the package. 44
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Protocol Amending the General Agreement on Tariffs and Trade to Introduce a Part IV on Trade and Development done at Geneva on 8 February 1965, BISD 13S/2. See, for example, most of the Tokyo Round Agreements of 1979. Article XI:1 of the WTO Agreement.
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Where an amending protocol does not cover areas within the competence of both the European Union and its Member States (and the Protocol Amending the TRIPS Agreement may be an example), the denominator in the two-thirds rule for entry into force remains the same: it comprises ‘the Members’ of the WTO. The number of ‘the Members’ is not a number that varies according to the share of WTO Members which, for internal constitutional reasons, including their legal relationship to other subjects of international law, are competent to accept an amendment. If the number of ‘the Members’ were expressed in such terms it would result in a lack of clarity and require the WTO treaty depositary to delve into questions of internal law, or at least EU law, which may be unclear and controversial, simply in order to establish the minimum number of acceptances required for a particular amendment to enter into force. A variable number of Members could be sufficiently clear if there was a mechanism for the respective competences of the European Union and its Member States to be agreed with respect to each amendment in advance of its entry into force. However, the issue concerns more than simply counting Members for the purposes of entry into force of an amendment. The additional question is whether the EU Member States will truly be bound by a WTO amendment once it does enter into force. If the EU Member States are not bound, then the legal relationship between each of them and other WTO Members would remain governed by the terms of the original, unamended agreement, subject to any applicable waivers. VII. HOW TO PROCEED?
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Acceptance of a WTO amendment (as opposed to implementation in domestic or EU law) is an act on the international plane that concerns not only the European Union and its Member States but also all other WTO Members, as the EU Member States have rights and obligations under the WTO Agreement, including the TRIPS Agreement, vis-a`-vis other WTO Members.47 WTO Members have not indicated whether they are satisfied that the EU Member States should be considered to have accepted the TRIPS Amendment by virtue of the instrument of acceptance deposited by the European Union. The silence of other WTO Members does not indicate acquiescence in any particular view of that issue. While all WTO Members have received notification of the European Union’s acceptance of the Amendment, that acceptance did not state that the EU Member States 47
India and Brazil have recently requested consultations with both the European Union and the Netherlands in European Union and a member State— Seizure of Generic Drugs in Transit, alleging inconsistencies with the WTO obligations of both the European Union and the Netherlands, including under the TRIPS Agreement. See WT/DS408/1 and WT/DS409/1, dated 11 and 12 May 2010, respectively.
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accepted the Amendment but rather referred to the position of the EU Member States under internal EU law. Nor has the WTO treaty depositary notified WTO Members that the EU Member States accepted the Amendment. WTO Members may wish to consider how the EU Member States should be taken into account in determining the date of entry into force of an amendment under Article X of the WTO Agreement in the event that the EU Member States lack competence to accept such an amendment. WTO Members should also consider whether and how to ensure that EU Member States are in fact bound as a matter of public international law vis-a`-vis other WTO Members by a WTO amendment that is binding upon the EU Member States under internal EU law. The WTO Director-General, in his capacity as treaty depositary, could seek confirmation of the position of the European Union and its Member States and also seek the opinion of the Council for TRIPS or the General Council. It would be advisable to carry out these consultations well in advance of the time when the different approaches to the European Union’s acceptance of the TRIPS Amendment produce conflicting answers to the question whether that Amendment has entered into force. Consultations might of course simply gravitate toward the quickest solution. Particular positions may also be driven more by concerns regarding the European Union’s internal allocation of treaty-making competence than a desire to ensure that the status of the TRIPS Amendment is clear. Other WTO Members may be unwilling to question the arrangements among EU Member States and the EU institutions, especially where the outcome of such a technical consultation is uncertain. However, the issue is not a purely internal EU affair as it affects the rights and obligations of all WTO Members that have accepted the TRIPS Amendment, including the entry into force of that Amendment for Members outside the European Union between each other. VIII. CONCLUSION
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After four and a half years, the Protocol Amending the TRIPS Agreement may not be even halfway toward entry into force in terms of the total number of acceptances received. The pace of acceptances shows no signs of quickening. There is significant uncertainty as to how to treat the European Union’s acceptance which makes a major difference to the calculation of the number of Members that have accepted the Protocol and which could considerably delay entry into force of the TRIPS Amendment. For now, it may not make much difference how the European Union’s acceptance is counted because no fewer than 46 (and quite possibly 72) more WTO Members must accept the TRIPS Amendment before it enters into force, which will take time. However, at some point the issue may have to be
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addressed so that, at the very least, the WTO Director-General as treaty depositary can notify Members when the Amendment has taken effect without controversy or doubt and so that any defects in the acceptance process can be addressed. It is also important to clarify whether, and how, the TRIPS Amendment will bind the EU Member States. Such a discussion should take place well before the first potential date on which the TRIPS Amendment could take effect. This process may provide a precedent for the entry into force (or not) of the results of the Doha Round. In the meantime, as regards the actual system of compulsory licensing of pharmaceutical products solely for export, the consequences of legal uncertainty regarding the entry into force of the Amendment are alleviated by the interlocking nature of the current Waiver and the Amendment until the Amendment takes effect for two-thirds of the Members.
