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MGT601 - SME Management - Lecture Handout 41

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Trade Related aspects of Intellectual Property Rights (TRIPS)

As a member of the WTO, Pakistan is committed to fulfilling TRIPs obligations. Copyrights piracy is considered very high, affecting imported computer software, videos, films and textile designs. Pakistan like developing countries was given deadline of January1, 2000 (i.e. five year period) to bring into conformity with the WTO commitment. List copyrights laws etc. Pakistan is not yet fully ready to implement its commitment.

In Pakistan, five laws/amendments have been promulgated, to provide intellectual property protection under WTO standards.

  1. Patents Ordinance, 2002
  2. Trademarks Ordinance, 2001
  3. Copyrights Amendments Ordinance, 2000.
  4. Industrial Designs Ordinance, 2000.
  5. Registration of Layout Designs of Integrated Circuits Ordinance, 2000.

In Industrial economies, intellectual property laws are regulated under a single umbrella organization to reduce the regulatory impediments that discouraged entrepreneurs from compliance with regulations. In Pakistan, all three areas (Copyrights, trademarks and patents) are managed separately by different federal ministries, i.e. Ministry of Education (copyrights), Ministry of commerce (trademarks) and Ministry of Industries & Production (Patents). There is urgency for enforcement of the laws promulgated regarding infringement of IPRs for which necessary rules should be farmed and notified a priority basis.

General enforcement obligations under TRIPS

Pakistan IPR legislation follows the TRIPs standards by providing for civil and criminal remedies and also for broader measures for enforcement of IPRs. For all forms of intellectual property, civil remedies are available against infringement .All decisions of lower courts i.e. the district courts are appeal able in the High Court. Due process such as the timely service of notice, right of being heard. Production of evidences etc. is available in IPR cases as in any other legal action in Pakistan. In any suit for infringement of IPR in addition to provisional and border measures the courts may order remedies that act as effective deterrents to infringements of intellectual property.

Enforcement of IPRS

The enforcement of IPRs is weak area in Pakistan and this state of affairs makes us vulnerable not only to criticism but potentially also to trade retaliatory measures from our trading partners. Our manufacturer needs to be very careful about infringement of IPRs to avoid possible trade sanctions against us. American Business Council has suggested setting up of an IPR task force.

WTO and Pakistan Intellectual Property Rights Organization (PIPRO)

To improve the administrative and enforcement scenario, the government of Pakistan has approved establishment of an umbrella organization called “Pakistan Intellectual Property Rights Organization” and, as per Trade Policy 2003-04, “necessary legislation will come soon so that PIPRO can start functioning”. This organization is intended to fill the much-needed gaps in the areas of IPR policy articulation, legal and enforcement issues, research and development, up gradation of outdated systems and procedures, coordination, human resource development, etc. Reportedly, United States, has offered technical assistance for the establishment of PIPRO. The importance of IPRs is further underscored by the fact that these are directly linked with signing of FTA between USA and Pakistan.

International Treaties

Among the WIPO Conventions, Pakistan has joined the Universal Copyright Convention and is in the final stage of acceding to Paris Convention for the protection of Industrial Property.

Pakistan’s Viewpoint

  • All provisions of the TRIPs agreements must strike a balance private rights and public policy objectives.
  • Technical assistance for development and transfer of technology.
  • In Geographical indication, additional protection should be extended to products like Wine & Spirit.
  • TRIPs Agreement to be made compatible with the Convention on biodiversity. There is a need to incorporate a provision that patents inconsistent with the convention must be granted.
  • Harmonization of the Convention on Bio-diversity and TRIPS Agreement on protection of traditional knowledge, Folklore and Plant Breeders Rights.
  • Maximum flexibility to adopt measures for pubic health and access to medicines.
  • The Agreement should be reviewed to ensure how developmental objectives can be taken into account.

Trade Related Investment Measures (TRIMs)

Under the TRIMs Agreement, WTO members agreed not to apply any TRIMs inconsistent with GATT national treatment and quantitative restriction subject to the exemptions permitted under GATT 1994.

Pakistan is committed to phase out the “Deletion Programme” for automobiles, electronics, electrical products and engineering items, which were to be phased out within five years of the entry into force of the agreement. However, transition period could be extended, on the request of individual developing/LDCs if there are difficulties in elimination them. Pakistan along with six other developing countries received extension of the transition period through the end of 2001 and in November 2001 further extensions were granted for period up to end-2003. Thus, instead of the extension of seven years demanded by Pakistan, WTO Council of Trade and Goods (CTG) has granted only a two year extension up to December 2003 for the implementation of the deletion program. Reportedly consideration of one further request for extension on the transition period is pending.

Textile and Clothing (ATC)

One of the principle objectives of Pakistan in UR was not only to achieve elimination of multi-fibre agreement (MFA) but full integration of textile and clothing into the GATT in order to secure greater access to international markets.

However, the results of UR Agreement on textile and clothing were disappointing is for Pakistan. Almost half (49 %) of the products of textile and clothing are left to be integrated in final year of 10 years integration period. this “back loading” suggests that meaning full integration will take place in the final stage and at that time developed countries may either impose new restrictions or impose Antidumping or other Safeguard measures to restrict market access.

In mid 1996, Pakistan presented to the WTO Goods Council a paper on behalf of WTO members arguing that developed importing countries were not living up to the liberalizing spirit of the Agreement. The exporters raised a number of concerns including the fact that most of the commercially meaningful items are being left until last stage of integration.

Developed countries were using transitional safeguard measures to protect their industries on the plea that surges of imports of specific products were causing serious damage to their industries. In the first year of ATC, two transitional Safeguard actions were taken by USA to restrict textile imports from Pakistan. The US government adopted delaying tactics for fulfillment of 3-year quota restrictions imposed in October 1999 on imports of combed cotton yarn from Pakistan.

Although Textile Monitoring Body (TMB) gave its decision in favours of Pakistan, the US government did not pay any attention. The GOP initiated proceedings with the DSB and received favorable decision, whereupon US filed an appeal with the DSB for review. Finally, Pakistan received decision in its favours but the damage was already done.

Our exports in 2005 would face severest competition from major suppliers like China, Hong Kong, Thailand and Bangladesh. Potential growth of Pakistani exports depends on ability of producers to improve the quality of their exports, and improvements in productivity and restructuring of the domestic industry.

The textile sector, which contributes 67 percent to our total exports, has made some headway in facing the post quota era after January, 2005. Under Textile Vision 2005, industry planned to invest 6 billion dollar in a phased program to take the production of textile goods upwards in the value chain. In the last four years, textile sector has invested US$ 2 billion for BMR to ring their production at par with the world quality. There has been quantum jump in the exports of value added textiles during the year 2002-03: three more value added items namely knitwear, bed wear and ready-made garments have joined the fabrics in the elite club of billion dollars in export of textile goods.

However, the pressure is mounting on textile industry from foreign buyers for compliance with social, labour, health, hygienic and environment standards. This needs to be addressed on top priority basis.

It is apprehended that the implementation of WTO and the MFA phase out will start another era of non-tariff barriers by developed countries. The non-tariff barriers consist of a long list of social standards and social issues, including child labour, environment and other quality standards.

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