Working PBRs alongside agricultural subsidies

Introducing PBRs before curtailing agricultural subsidies can contribute to, if not create, losses without any offsetting benefits. Introducing PVP will not affect international trade in agriculture positively so long as agricultural subsidies limit access to the markets. Developing nations' ability to benefit from PBRs depends on interaction with other market mechanisms. In order for nations to benefit from PBRs, the impediments from agricultural subsidies must be removed. Hence, developing nations should resist adopting the TRIPS art. 27.3 requirement of establishing a PVP regime until the AOA and the ASCM are implemented to reduce or eliminate the trade-distorting subsidies of developed nations.

Two things are prominent in this context. First, the transition period for adopting the art. 27.3 requirements expired in 2005. Similarly, art. 13 of the AOA (AOA, 1994), detailing the subsidy reduction commitments applicable to developed nations and termed 'peace clause', expired at the end of 2003. Developing nations should highlight that the objective of introducing PBRs cannot be achieved until the AOA and the ASCM are implemented to reduce or eliminate the trade-distorting subsidies of developed nations. Hence, as a precondition to adopting PBRs, developing countries should rightfully demand that developed nations fulfil their commitments. Developing nations should highlight the legal vulnerabilities of the subsidy programme, either in the next round of WTO talks at Geneva or, alternatively, take the dispute to the WTO Panel. Considering the transactional cost of the latter option (Steinberg and Josling, 2003), developing nations may seek a clarification on the PBRs' requirement of art. 27.3 of TRIPS similar to the clarification on public health. If developed nations want their protected commodities to be introduced into the worldwide market, subsidies should be eliminated. Developed nations cannot have the option of both subsidizing and exporting their commodities at premium price.

Similarly, developing countries should consider adopting a differential monopoly term depending on the economic development of the nation. In countries like Ethiopia, where access to food remains a major problem, monopolizing food rights for 20 years deprives nations of the very benefits that PBRs are intended to create. Alternatively, countries wishing to adopt UPOV or a similar regime should retain the right to compulsorily license PBRs in public interest or in national emergencies to enable access to food. Countries that fear the consequential parallel importation of food should seek appropriate undertakings from respective governments to avoid such importation.

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