THE HINDU EDITORIAL- SEPTEMBER 20, 2017
- I) India needs to push for a new deal
Global trade and intellectual property are at a crossroads. In a time when multilateral consensus is languishing on a large number of issues, the Trump administration is considering pulling the U.S. out of most free trade agreements on the ground that it needs a more favourable environment for its companies and its people. Much will be written about the carnage as far as jobs, wages and national sovereignty that the current American onslaught on trade deals brings to the fore. Here, I focus on a critical issue — how trade deals are becoming the new Trojan horse to ensure stronger patent protection and continued profits to global companies.
Problem with trade deals
A bit about the historical trajectory of events. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) embodied an international regulatory regime for the first time, in 1995. Although it represented a major compromise for most developing countries, it was only the starting point for many other nations, which have since then promoted excessive protection of private investor interests through bilateral trade agreements, often at the expense of wider public interests. Corporate libertarians, riding high on increased market power, continue to lobby their governments for absolute protection of intellectual property (IP) rights of corporations. For the U.S. in particular, which has never made any qualms about the importance of its domestic corporate interests, trade agreements are a prime vehicle to supplant its strong domestic standards of IP protection in partner countries, in a bid to ensure the same level of privileges for its companies abroad. Over the past 20 years, the American strategy has been a neat one: to pursue bilateral agreements with individual countries one by one to ensure stronger IP protection across markets, by sidestepping the multilateral regime.
Gaming the system
In an inter-connected and highly globalised world, what goes around comes around quite fast and often with drastic consequences for all. In this case, the crux of the matter lies in how these stronger rules are changing the global corporate landscape. For years now, while patent protection is getting stronger in all sectors in a large number of countries, the conditions for its grant are becoming greatly relaxed. Not only do such lax patenting requirements allow companies to claim patents more broadly — or consecutively, with little show of original effort as in the case of evergreening — but also patents can be claimed on all possible inventions (and discoveries) that are of relevance to the present, and even to the future. A large number of countries have already foregone many degrees of policy freedom by signing up to ‘TRIPSPlus’ standards of protection. This, in conjunction with other trade measures, is disintegrating existing markets and rigging established rules of the game. A superstar firm today is not necessarily one with the greatest technological breakthroughs or the largest research and development labs, but surely is one that has a large IP portfolio, engages in extensive litigation on patent issues, and thrives on licensing revenues. Noting the gravity of the situation, The Economist in 2016 produced two short opinion pieces on how corporate profits and returns on capital are at near record levels in the U.S. and what might be wrong with it. It argued that established companies are “becoming more entrenched” in existing markets worldwide, and made the case that high profits may be a sign of a sickness rather than growth and called for reining in IP rights.
At the global level, these sectors are stratified, with profits neatly split up between large corporations and new kinds of non-innovator firms that simply amass patents speculatively in upcoming, promising technologies for spurious returns. The non-innovator companies are the patriciates of the system: when they hit the technology jackpot, they control the market and have the power to shift wealth and control competition. An example that beautifully captures the situation is Qualcomm Inc., an American company that is the legal patent holder of thousands of patents that are considered critical to build mobile phones with wireless technologies, accounting for a total profit of $5.7 billion through intellectual property licences in 2016 alone.
Stemming the tide
For India, the fate of its pharmaceutical and software sectors swings in the balance, and guaranteeing fair and unfettered competition will be critical to ensure that we do not lose more ground to global companies abroad and at home. The United Nations Conference on Trade and Development (UNCTAD)’s recent Trade and Development Report calls for stronger measures to protect domestic sectors against the undue domination of large companies, particularly in high-profit sectors such as pharmaceuticals, media and information and communications technology (ICT), where foreign companies still account for most of the transfer of profits across borders. Warning against trade deals that seek to protect the status quo, the report identifies patents as an instrument of unfair market power across markets. The report uses data for U.S. multinational companies (MNCs) and their foreign affiliates in India to show that patent reforms have led to significant increases in the rates of return to affiliates of American companies by enabling monopoly profits when compared to publicly listed and locally headquartered companies, which are increasingly being left behind. In the pharmaceutical sector, for example, the analysis that ranges 20 years (from 1996) shows that profits of domestic companies are in sharp decline since the late 2000s while those for the American MNC affiliates operating in the Indian market are rising steeply. A similar trend is visible in the ICTs sector as well. It is important to take these findings in the broader perspective of what India’s growth drivers will be in the years to come. Our high technology sectors are already taking a beating because they operate in a volatile global environment. Supporting IP standards that simply follow a ‘winner takes all’ ideology without emphasis on technological advancement and competitive markets will be a regrettable mistake. What India needs right now is a clear and tough stance on intellectual property both in domestic policy and at the multilateral level. At home, support for innovation has to be accompanied with instruments that guard against the misuse of market power, coercive bargaining and aggressive merger and acquisition strategies if local firms should survive and flourish. Heated negotiations in the runup to the upcoming WTO Ministerial Conference in Argentina already show that these issues will be central: there are ongoing attempts by big business to push for new rules in areas such as e-commerce to slice up profit-making opportunities of the future. Other proposals being made will largely limit the ability of governments to constrain corporate behaviour in the public interest even if they succeed partially. In such an international context, we need to stop soft-peddling on these issues in the pretence that we aspire to be a major IP player in the same vein as the U.S. What we need is a return to old-fashioned pragmatism that clearly shows the West that India recognises the fallacy of the current IP system and leads the way to broker a global new deal. This new deal should not only call for a return to business in the WTO by tackling the forgotten issues of the Doha Round but also firmly reopen the discussion on balancing the global IP system with development. That way, even if we don’t win in Argentina, we will have made an ambitious start in redefining the global trade and IP agenda.
- II) The Kurdish vote
Iraqi Kurdistan’s decision to go ahead with a proposed independence referendum, despite strong opposition both from within and outside Iraq, has created a regional political storm in West Asia. The Iraqi Supreme Court has already asked the Kurdistan Regional Government to suspend the vote, scheduled for September 25, till its legality is settled. Iraqi Prime Minister Haider al-Abadi has threatened to use force if the referendum turns violent. The Turkish government has ordered a military drill on the Iraqi border, while Iran has also issued a warning. Such opposition is largely driven by fears that a ‘yes’ vote in the referendum, which is almost certain, would enhance the nationalist aspirations of Kurds living in other countries and further destabilise the region. Besides Iraq, Kurds, the fourth largest ethnic group in West Asia but without a state, are scattered in various countries, including Turkey, Iran and Syria. In Turkey, Kurdish rebels are involved in a protracted civil war, while in Syria they have established a regional government. They are all keenly awaiting the outcome of the Iraqi vote. A ‘yes’ vote doesn’t necessarily mean that Iraqi Kurdistan would immediately break away from Iraq. Both the regional government in Erbil and the federal government in Baghdad are not ready for that. But the Kurdish Regional Government, led by Masoud Barzani, wants to send a message to Baghdad as well as the outside world that its aspirations for independence are genuine and have popular resonance. For generations, Iraqi Kurds have been at the receiving end in the dysfunctional relationship between Baghdad and Erbil. Kurds had been brutally repressed until the regional government was formed following the first Gulf War of 1991. Since then, they have exercised autonomy and built institutions for self-governance, but Kurdistan has remained part of Iraq. Now, Mr. Barzani, who will step down as the President of the regional government after the November 1 elections, is looking to begin the process for restructuring Erbil-Baghdad ties. Baghdad should see this as an opportunity to address the Kurdish question. In recent years, both Baghdad and Erbil cooperated in the fight against the Islamic State. Now that the IS threat has been largely contained, both sides can refocus their energies on settling the dispute between themselves. Though independence remains the proclaimed goal of Iraqi Kurdistan, Mr. Barzani himself has often signalled compromise. He once proposed a confederation, a united state in which Iraq and Kurdistan could co-exist, sharing resources and a vision on foreign and security policies. Baghdad chose to ignore such proposals. With the push for the referendum, Kurds are trying to change the status quo. Federal dialogue is essential, for it is neither in Baghdad’s nor the Kurds’ interest to jeopardise the relative calm in Iraq’s northeast, or to deepen sectarian fault lines.
1) Consensus: A general agreement.
Example: There is a growing consensus that the current regime has failed.
Synonyms: agreement, harmony
2) Languishing: (of a person, animal, or plant) lose or lack vitality; grow weak.
Example: Plants may appear to be languishing simply because they are dormant.
Antonyms: thrive, flourish
3) Carnage: The killing of a large number of people.
Example: The bombing was timed to cause as much carnage as possible.
Synonyms: slaughter, massacre
4) Sovereignty: Supreme power or authority.
Example: The sovereignty of Parliament.
Synonyms: jurisdiction, supremacy
5) Onslaught: a fierce or destructive attack.
Example: A series of onslaughts on the citadel.
Synonyms: assault, attack
6) Trajectory: The path followed by a projectile flying or an object moving under the action of given forces.
Example: The missile’s trajectory was preset.
Synonyms: course, route
7) Embodied: Be an expression of or give a tangible or visible form to (an idea, quality, or feeling).
Example: A national team that embodies competitive spirit and skill.
Synonyms: personify, incorporate
8) Regime: A government, especially an authoritarian one.
Example: Ideological opponents of the regime.
Synonyms: government, authorities
9) Qualm: An uneasy feeling of doubt, worry, or fear, especially about one’s own conduct; a misgiving.
Example: Military regimes generally have no qualms about controlling the press.
Synonyms: misgiving, doubt
10) Supplant: Supersede and replace.
Example: Domestic production has been supplanted by imports and jobs have been lost.
Synonyms: replace, displace
11) Pursue: Follow or chase (someone or something).
Example: The officer pursued the van.
Synonyms: go after, run after, follow.
Antonyms: avoid, flee
12) Crux: The decisive or most important point at issue.
Example: The crux of the matter is that attitudes have changed.
Synonyms: nub, heart
13) Rigging: The act of arranging dishonestly for the result of something, for example an election, to be changed.
Example: Opposition parties have protested over alleged vote rigging in the election.
14) Litigation: The process of taking legal action.
Example: The Company wishes to avoid litigation.
Synonyms: legal action, lawsuit.
15) Entrenched: (of an attitude, habit, or belief) firmly established and difficult or unlikely to change; ingrained.
Example: An entrenched resistance to change.
16) Reining: Keep under control; restrain.
Example: With an effort, she reined back her impatience.
Synonyms: restrain, check
17) Stratified: Form or arrange into strata.
Example: socially stratified cities.
18) Spurious: Not being what it purports to be; false or fake.
Example: Separating authentic and spurious claims.
Synonyms: bogus, fake, not genuine
Antonyms: authentic, genuine
19) Patriciates: A noble order or class.
Example: The Venetian merchants became a great hereditary patriciate.
20) Unfettered: Not confined or restricted.
Example: His imagination is unfettered by the laws of logic.
Synonyms: unrestrained, unrestricted
Antonyms: restricted, fettered
21) Undue: Unwarranted or inappropriate because excessive or disproportionate.
Example: This figure did not give rise to undue concern.
Synonyms: excessive, extreme, immoderate
Antonyms: due, appropriate, proper
22) Affiliates: Officially attach or connect (a subsidiary group or a person) to an organization.
Example: They are national associations affiliated to larger organizations.
23) Regrettable: (of conduct or an event) giving rise to regret; undesirable; unwelcome.
Example: the loss of this number of jobs is regrettable
Synonyms: undesirable, unfortunate
Antonyms: desirable, welcome
24) Coercive: relating to or using force or threats.
Example: coercive measures.
25) Flourish: (Of a living organism) grow or develop in a healthy or vigorous way, especially as the result of a particularly congenial environment.
Example: Wild plants flourish on the banks of the lake.
Synonyms: grow, thrive, prosper
Antonyms: die, wither
26) Constrain: Compel or force (someone) to follow a particular course of action.
Example: Children are constrained to work in the way the book dictates.
Synonyms: compel, force
27) Pretence: An attempt to make something that is not the case appear true.
Example: His anger is masked by a pretence that all is well.
Synonyms: make-believe, act
Antonyms: reality, honesty
28) Aspire: Direct one’s hopes or ambitions towards achieving something.
Example: We never thought that we might aspire to those heights.
Synonyms: desire (to), aim for
29) Pragmatism: a pragmatic attitude or policy.
Example: Ideology had been tempered with pragmatism.
30) Ambitious: Having or showing a strong desire and determination to succeed.
Example: A ruthlessly ambitious woman.
Synonyms: aspiring, determined
Antonyms: unambitious, lazy
31) Referendum: A general vote by the electorate on a single political question which has been referred to them for a direct decision.
Synonyms: public vote, plebiscite
32) Protracted: lasting for a long time or longer than expected or usual.
Example: a protracted and bitter dispute
33) Keenly: In an eager or enthusiastic manner.
Example: One of this year’s most keenly anticipated movies.
34) Resonance: The quality in a sound of being deep, full, and reverberating.
Example: The resonance of his voice.
35) Repressed: Restrained or oppressed.
Example: Repressed indigenous groups.
Synonyms: oppressed, subjugated
Antonyms: free, democratic
36) Proclaimed: Announce officially or publicly.
Example: The government’s chief scientific adviser proclaimed that the epidemic was under control.
Synonyms: declare, announce
37) Confederation: An organization which consists of a number of parties or groups united in an alliance or league.
Example: A confederation of trade unions.
Synonyms: alliance, league.
38) Status quo: The existing state of affairs, especially regarding social or political issues.
Example: They have a vested interest in maintaining the status quo.
39) Jeopardise: Put (someone or something) into a situation in which there is a danger of loss, harm, or failure.
Example: A devaluation of the dollar would jeopardize New York’s position as a financial centre.
Synonyms: threaten, endanger
40) Sectarian: Rigidly following the doctrines of a sect or other group.
Example: The sectarian Bolshevism advocated by Moscow.
Synonyms: factional, schismatic
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