Trade and Investment Agreements and STI in Asia-

Pacific

Based on the DRAFT paper ” Trade and investment-related aspects of STI” prepared for the ESCAP and APCTT Second Regional workshop on Harnessing

Science, Technology and Innovation for Sustainable Development,

Monday, 2 November 2015 at United Nations Conference Centre, Bangkok

Sari Laaksonen, Consultant

Do provisions on science, technology and innovation (STI) appear in the trade and investment agreements the ESCAP Member States have ratified? Do the trade and investment agreements that the ESCAP Member States are parties to support development of innovation as well as science, technology in these countries? Or, are they curbing the development of STI?

Methodology • Trade and investment agreements with a regional economic community as one

part of the agreement, or, alternatively, with three or more countries as parts of the agreement, were studied.

• One of the parties of the agreement must have been an ESCAP Member State.

• For agreements in the ESCAP Asia-Pacific Trade and Investment Agreements Database meeting these criteria, agreements with status “in force since” were included. WTO Regional Trade Agreements Database was scanned for agreements meeting the same criteria as those in the ESCAP Database but not appearing in the ESCAP Database.

• As for the International Investment Agreements Navigator by UNCTAD’s Investment Policy Hub, agreements in the category “IIAs by Economy”/”Other Investment Agreements (Other IIAs)” meeting the same criteria as in the other two databases, not appearing in the other two databases, and with the column “date of entry into force” filled, were included.

Methodology

• In total 65 trade and investment agreements were examined for this report; 32 of these appeared in the ESCAP (28) and WTO (4) “trade agreements” databases, 33 in the UNCTAD “investment agreements” database.

• These included following types of agreements: Cooperation Agreements, Customs Unions, Free Trade Agreements (FTA), Framework Agreements, Free Trade Agreements & Economic Integration Agreements (FTA&EIA), Investment Agreements (IA), Partnership Agreements, Preferential Trade Agreements (PTA) and Trade and Investment Framework Agreements (TIFA).

Methodology

• Included agreements were first examined for content relating to science, technology, innovation and intellectual property rights.

• An agreement was ticked to include a provision on science, technology and/or innovation, respectively, only if it appeared separately from where it was defining a provision on IPR.

• A separate “tick” was granted for an agreement explicitly promoting transfer of technology.

• Agreements were also ticked for “including a provision on STI but not on IPR”, “including a provision on IPR but not on STI” and “including no provision on STI nor on IPR”.

Methodology

• Acknowledging the importance of provisions on intellectual property rights for the development of STI, included agreements were, in the second round, scanned for containing statements on ten (10) different types of general IP provisions.

• The third round of scanning the included agreements focused on specific categories of IP law.

• Categorization of types of general IP provisions and specific categories of IP law used in the WTO Staff Working Paper “Intellectual Property Provisions in Regional Trade Agreements: Revision and Update” by Valdés & McCann (2014) was applied.

STI and IPR Provisions in the Trade and Investment Agreements • Six (6) agreements in the ESCAP+WTO “trade agreements” databases and

21 agreements in the UNCTAD “investment agreements” database contained a provision on science. This is in total 27 of 65 agreements.

• 15 agreements in the ESCAP+WTO “trade agreements” databases and 27 agreements in the UNCTAD “investment agreements” database contained a provision on technology. This is in total 42 of 65 agreements.

• Three (3) agreements in the ESCAP+WTO “trade agreements” databases and 11 agreements in the UNCTAD “investment agreements” database contained a provision on transfer of technology. This is in total 14 of 65 agreements.

STI and IPR Provisions in the Trade and Investment Agreements • “Innovation” appeared in the included agreements much less frequently than “science”,

“technology” and “transfer of technology”. Five (5) agreements in the ESCAP+WTO “trade agreements” databases and three (3) agreements in the UNCTAD “investment agreements” database contained a provision on innovation. This is in total eight (8) of 65 agreements.

• 16 agreements in the ESCAP+WTO “trade agreements” databases and 27 agreements in the UNCTAD “investment agreements” database contained a provision on Intellectual property rights (IPR). This is in total 43 of 65 agreements; one appearance more as for “technology”.

• Four (4) agreements in the ESCAP+WTO “trade agreements” databases and four (4) agreements in the UNCTAD “investment agreements” database contained a provision on STI but not on IPR. These were the ASEAN FTA, APTA PTA, SAFTA FTA and SPARTECA PTA (from the ESCAP+WTO “trade agreements” databases) and the ASEAN-EU Cooperation Agreement, China-EC Trade and Cooperation Agreement, GCC—India Framework Agreement and BIMSTEC Framework Agreement (from the UNCTAD “investment agreements” database).

• Focusing on innovation, two agreements containing provisions on IPR were found to specifically promote innovation in the context of the IPR provision, namely the Korea-EU FTA and the Trans-Pacific SEPA between Brunei Darussalam, Chile, New Zealand and Singapore.

STI and IPR Provisions in the Trade and Investment Agreements • Ten (10) agreements in the ESCAP+WTO “trade agreements” databases and three (3)

agreements in the UNCTAD “investment agreements” database contained a provision on IPR but not on STI. These were the ASEAN-China PTA, ASEAN-India FTA, Common Economic Zone (CEZ) FTA, ECOTA FTA, Customs Union between Russia, Kazakhstan and Belarus, Korea-EFTA FTA, Pacific Island Countries FTA (PICTA), Singapore-EFTA FTA, Turkey-EFTA FTA and Turkey-EU Customs Union (from the ESCAP+WTO “trade agreement” databases) and the ASEAN-China Investment Agreement, ASEAN-Korea Investment Agreement and ASEAN-India Investment Agreement (from the UNCTAD “investment agreements” database).

• Totally ten (10) agreements did not contain any provision on STI nor on IPR. Eight (8) of these appeared in the ESCAP+WTO “trade agreements” databases and two (2) in the UNCTAD “investment agreements” database. These were the ASEAN-India FTA, Commonwealth of Independent States (CIS) FTA, India-MERCOSUR PTA, D-8 PTA, GSTP, MSG PTA, PTN PTA and Singapore-GCC FTA&EIA (from the ESCAP+WTO “trade agreements” databases) and the ASEAN Framework Agreement on Services and OIC Investment Agreement (from the UNCTAD “investment agreements” database).

Categories of IPR Provisions Contained in the Agreements General IP provisions Number of statements in the ESCAP+WTO

“trade agreements” databases

Number of statements in the UNCTAD

“investment agreements” database

Total number of statements out of the 65

agreements included in the study

Statement of commitment to IP

Protection 16 27 43

TRIPS reaffirmation 11 7 18

References to

WIPO treaties 7 13 20

National Treatment

or MFN provisions 6 5 11

Assistance, co-operation

or coordination 12 19 31

Enforcement procedures 10 5 15

Border measures 4 0 4

Exhaustion

(parallel imports) 4 0 4

Non-violation

complaints 0 0 0

IP defined as investment 1 5 6

Categories of IPR Provisions Contained in the Agreements

Specific category of IP law Number of provisions in the ESCAP+WTO

“trade agreements” databases

Number of provisions in the UNCTAD

“investment agreements” database

Total number of provisions out of the 65

agreements included in the study

copyright and related rights 8 14 22

trademarks 6 14 20

geographical indications 6 12 20

industrial designs 3 14 17

patents 1 17 18

undisclosed information 2 10 12

layout designs of integrated circuits 1 14 15

new plant varieties 4 10 14

traditional knowledge or genetic resources

(TK-GR)

4 0 4

encrypted program-carrying satellite signals 1 0 1

domain names 0 0 0

Other Variables or Topics of Interest in the Agreements Relevant to the Development of STI

• What are the other variables or topics of interest in the trade and investment agreements that have an impact on the development of STI? What kind of impact on STI do they have? Are they supportive or curbing of the development of STI?

• Could these include education? Issues pertaining to private sector development and entrepreneurship development? Technical assistance, partnerships and collaboration? Institutional issues? System for bilateral dispute settlement? Certain sectoral provisions?

• How should the dynamics between these and other relevant topics and the STI development be considered?

On the Impact of STI and IPR Provisions on Development of STI in Asia-Pacific • Provisions on science (27 of 65 agreements), technology (42 agreements), transfer of

technology (14 agreements) and innovation (8 agreements) typically indicated pursuit for promotional and developmental activities as well as advancement and collaboration, in some agreements even support by the developed party/parties to the developing. In some agreements concrete areas for pursuit of technological development, advancement and collaboration were spelled out and these typically were found in the sections on Information and Communication, Postal Services, Agriculture, Fisheries, Livestock, Plantation Commodities and Forestry, Environmental Industry, Broadcasting, Construction, SPS, Mining, Energy, Natural Resources, and Customs.

• No information, as a result of the desk-study carried out for this report, was found on the actual impact of the best intention and pursuit expressed, that is, on the how the provisions on STI have impacted national policy making, collaboration between the parties and, where applicable, delivery of technical assistance. It is likely that such information does not exist, into any larger extent at least, at all and for learning for future negotiations on trade and investment agreements commissioning such research might just be justified.

On the Impact of STI and IPR Provisions on Development of STI in Asia-Pacific • On the impact of the IPR provisions, Valdés & McCann (2014) say that the impact

of RTAs on domestic regulations can be substantial in part because IP provisions covered by the TRIPS Agreement and contained in a particular RTA/PTA must be applied without discrimination to the nationals of countries that are not parties to the RTA in question.

• Membership in additional RTAs can create a process of ratchet-like steps whose effect is to incrementally tighten a country's domestic IP regulations. This ratchet-up effect is likely to feed back into the international arena because a country will want to include in future RTAs the domestic regulations resulting from commitments it already made under previous agreements for any number of reasons: to achieve deeper integration, to lock-in domestic reforms and to prevent policy reversal, or to serve political motives. Both developed and a few developing countries thus appear to have engaged in a process that "exports" their domestic regulatory regimes to trading partners.

(Valdés & McCann 2014)

Policy and Research Gaps and Recommendations • Governments are well advised to study carefully the potential economic

benefits and costs associated with a new trade agreement. Developing platforms, guidelines and tools to carry out cost-benefit analysis, including on the adoption of new IPR standards, as well as providing technical assistance and training in such analyses is an obvious gap to be filled.

• Relatively few comprehensive analyses have been carried out on the actual IP content of PTAs and such should go to the “to-do list” of relevant organizations.

• More thinking could be devoted to that what are the other topics of interest in the trade and investment agreements that have an impact on the development of STI and how to deal with them.

• Finally, we just simply need to know more of the impact of the science, technology, transfer of technology, innovation and – for that matter – IPR provisions in the trade and investment agreements in the STI development; Impact research is required.

Trade and Investment Agreements Included

ESCAP

AFTA-ATIGA-AFAS, ASEAN Free Trade Area, Regional, Free Trade Agreement, In force since 1992

APTA, Asia-Pacific Trade Agreement, Regional, Preferential Trade Agreement, In force since 1976

ASEAN-AUSTRALIA- NEW ZEALAND, Agreement establishing an ASEAN-Australia-New Zealand Free Trade

Area, Country – Bloc, FTA & EIA, In force since 2010

ASEAN-CHINA, Agreement on Trade in Goods of the Framework Agreement on Comprehensive Economic

Co-operation between the Association of Southeast Asian Nations and the People's Republic of China,

Country – Bloc, Preferential Trade Agreement, In force since 2005

ASEAN-INDIA, Assotiation of Southeast Asian Nations and India Free Trade Agreement, Country – Bloc, Free

Trade Agreement, In force since 2010

ASEAN-JAPAN, Agreement on Comprehensive Economic Partnership among Japan and the Member States

of the Association of Southeast Asian Nations, Country – Bloc, Free Trade Agreement, In force since 2008

ASEAN-KOREA, Framework Agreement on Comprehensive Economic Cooperation Among the Governments

of the Republic of Korea and of the Member Countries of the Association of Southeast Asian Nations,

Country – Bloc, FTA & EIA, In force since 2010

CISFTA, Treaty on a Free Trade Area between members of the Commonwealth of Independent States (CIS),

Regional, Free Trade Agreement, In force since 2012

D-8 PTA, Preferential Tariff Arrangement - Group of 8 Developing Countries, Cross-Continental Plurilateral,

Preferential Trade Agreement, In force since 2011

EAEC, Agreement on Customs Union and Single Economic Area between the Kyrgyz Republic, the Russian

Federation, the Republic of Belarus, the Republic of Kazakhstan and the Republic of Tajikistan, Regional,

Customs Union, In force since 1997

ECOTA, Economic Cooperation Organization Trade Agreement, Regional, Free Trade Agreement, In force

since 2008

FIJI-PAPUA NEW GUINEA-EU, European Union-Papua New Guinea-Fiji Interim Economic Partnership

Agreement, Country – Bloc, Free Trade Agreement, In force since 2009

GSTP, Agreement on the Global System of Trade Preferences among Developing Countries, Global

(developing countries), Preferential Trade Agreement, In force since 1989

HONG KONG, China- EFTA, Free Trade Agreement between EFTA States and Hong Kong, China, Country –

Bloc FTA & EIA, In force since 2012

INDIA-MERCOSUR, Preferential Trade Agreement between Mercosur and the Republic of India, Country –

Bloc, Preferential Trade Agreement, In force since 2009

KAZAKHSTAN- RUSSIAN FEDERATION- BELARUS, Customs Union between Russia, Kazakhstan and Belarus,

Regional, Customs Union, In force since 2010

KOREA-EFTA, Free Trade Agreement between the EFTA States and the Republic of Korea, Country – Bloc,

FTA & EIA, In force since 2006

KOREA-EU, Trade Free Trade Agreement between the European Union and its Member States, of the one

part, and the Republic of Korea, of the other part, Country – Bloc, FTA & EIA, In force since 2011

MSG, Trade Agreement Among the Melanesian Spearhead Group Countries, Regional, Preferential Trade

Agreement, In force since 1994

PICTA, Pacific Island Countries Trade Agreement, Regional, Free Trade Agreement, In force since 2003

PTN, Protocol Relating to Trade Negotiations Among Developing Countries Agreement, Cross-Continental

Plurilateral, Preferential Trade Agreement, In force since 1973

SAFTA, Agreement on South Asian Free Trade Area, Regional, Free Trade Agreement, In force since 2006

SINGAPORE-EFTA, Free Trade Agreement between the EFTA States and Singapore, Country – Bloc, FTA &

EIA, In force since 2003

SINGAPORE-GCC, Gulf Cooperation Council-Singapore Free Trade Agreement, Country – Bloc, FTA & EIA, In

force since 2013

SPARTECA, South Pacific Regional Trade and Economic Cooperation Agreement, Regional, Preferential

Trade Agreement, In force since 1981

TRANS-PACIFIC SEPA, Trans-Pacific Strategic Economic Partnership Agreement, Cross-Continental

Plurilateral, FTA & EIA, In force since 2006

TURKEY-EFTA, Agreement between the EFTA States and Turkey, Country – Bloc, Free Trade Agreement, In

force since 1992

TURKEY-EU, Decision No 1/95 of the EC-Turkey Association Council of 22 December 1995 on implementing

the final phase of the Customs Union, Country – Bloc, Customs Union, In force since 1996

WTO

Common Economic Zone (CEZ), Belarus; Kazakhstan; Russian Federation; Ukraine, Plurilateral, Free Trade

Agreement, In force since 2004

EU - Papua New Guinea / Fiji, Austria; Belgium; Bulgaria; Croatia; Cyprus; Czech Republic; Denmark; Estonia;

Finland; France; Germany; Greece; Hungary; Ireland; Italy; Latvia; Lithuania; Luxembourg; Malta;

Netherlands; Poland; Portugal; Romania; Slovak Republic; Slovenia; Spain; Sweden; United Kingdom; Fiji;

Papua New Guinea; Plurilateral; One Party is an RTA, Free Trade Agreement, In force since 2009

EU – Georgia, Austria; Belgium; Bulgaria; Croatia; Cyprus; Czech Republic; Denmark; Estonia; Finland;

France; Germany; Greece; Hungary; Ireland; Italy; Latvia; Lithuania; Luxembourg; Malta; Netherlands;

Poland; Portugal; Romania; Slovak Republic; Slovenia; Spain; Sweden; United Kingdom; Georgia, Bilateral;

One Party is an RTA, Free Trade Agreement & Economic Integration Agreement, In force since 2014

Eurasian Economic Union (EAEU), Armenia; Belarus; Kazakhstan; Kyrgyz Republic; Russian Federation,

Plurilateral, Free Trade Agreement & Economic Integration Agreement, In force since 2015

UNCTAD

ASEAN-China Investment Agreement

ASEAN-Korea Investment Agreement

ASEAN-Korea Framework Agreement

ASEAN Investment Agreement

ASEAN-US TIFA

ASEAN Framework Agreement on Services

ASEAN-EU Cooperation Agreement

AGREEMENT ON INVESTMENT UNDER THE FRAMEWORK AGREEMENT ON COMPREHENSIVE ECONOMIC

COOPERATION BETWEEN THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS AND THE REPUBLIC OF INDIA

BIMSTEC, Framework Agreement on the Bay of Bengal Initiative for Multi-Sectorial Technical and Economic

Cooperation (BIMSTEC) Free Trade Area, Regional, Framework Agreement, as on 15 January 2004

Cambodia-EC Cooperation Agreement

China-Japan-Korea trilateral investment agreement

China-EC Trade and Cooperation Agreement

COTONOU AGREEMENT

GCC-India Framework Agreement

EC-India Cooperation Agreement

Armenia-EC Cooperation Agreement

Azerbaijan-EC Cooperation Agreement

Bangladesh-EC Cooperation Agreement

EC-Georgia Cooperation Agreement

EC-Kazakhstan Cooperation Agreement

EC-Kyrgyzstan Cooperation Agreement

EC-Lao Cooperation Agreement

EEC-Mongolia Trade Cooperation Agreement

EC-Nepal Cooperation Agreement

EC-Pakistan Cooperation Agreement

EC-Russia PCA

EC-Sri Lanka Cooperation Agreement

EC-Tajikistan Partnership Agreement

EC-Uzbekistan Cooperation Agreement

EC-Vietnam Cooperation Agreement

The Energy Charter Treaty

OIC Agreement on Promotion, Protection and Guarantee of Investments Among Member States of the

Organisation of the Islamic Conference

US-Central Asia TIFA

Thank you! Sari Laaksonen

sari.laaksonen@salaco.fi

www.salaco.fi