http://www.unep.ch/etb/publications/Ecolabelpap141005f.pdf
The Trade and Environmental Effects of Ecolabels: Assessment and Response
United Nations Environment Program (2004)
Executive Summary
There is no easily accessible, independent body of data on the environmental effectiveness of ecolabelling. Despite the relatively high profile of the five labels that are the focus of this study, adequate data does not even exist on them. Anecdotal evidence and proxy indicators (many of which are imperfect) are not a sufficient basis for evaluating the environmental usefulness or desirability of ecolabelling programmes. In addition, it is currently difficult to isolate the effects of labelling from other variables that could lead to more sustainable production and consumption. There remains an urgent need to collect additional, reliable scientific data on the
environmental effects of existing ecolabelling programmes.
Neither is reliable, quantified evidence available concerning changes in trade flows – positive or negative – related to ecolabelling.
Minimizing undesirable trade effects
Two problems deserve to be given particular attention:
• the lack of checks or balances in regard to the proliferation of ecolabels, including the lack of any way to harmonize existing and new ones; and
• the cost of conformity assessment (often the most significant barrier for developing country producers), which is related to the proliferation of ecolabels.
The discussions on ecolabelling within the World Trade Organization (WTO) seem unlikely to progress in the short to medium term. Discussions on ‘labelling for environmental purposes’ under the Doha agenda are taking place in the Committee on Trade and Environment (CTE). This committee has no authority to create new rules on labelling or to amend existing ones. The Committee on Technical Barriers to Trade (CTBT) has the authority to create new rules in this area, but it remains unconvinced that rules for ecolabelling should differ from those for other types of labelling programmes. In any case, the CTBT is unlikely to turn its attention to
ecolabelling before 2006 at the earliest.
Even if WTO members were to discuss the need for new ecolabelling rules in the CTBT, anything this committee decided would impose rules only on governments. The WTO Agreements do not directly impose obligations on the types of private bodies that develop most ecolabelling programmes, nor do they impose obligations on companies establishing purchasing requirements or buying preferences. The WTO does not provide a forum that includes these bodies and other non-governmental stakeholders in the trade of ecolabelled goods. For all these reasons, the WTO does not appear to be adequately equipped to address the issue of this type of environmental requirement, which is increasingly being imposed through supply chains.
...(pp. 24-26)
Potential impacts of ecolabelling As mentioned earlier, no reliable information is available on the extent to which any of the five ecolabels has affected trade flows from developing countries because of their possible role as technical barriers to trade. To date, almost no concrete concerns have been expressed within the WTO or any other forum regarding a specific Type I ecolabelling programme.
Concerns have tended to be general in nature and to be directed at environmental labelling in general. A review of the potential negative impacts of ecolabelling can do little more than summarize the widely expressed but largely unsubstantiated concerns expressed by WTO members.
[ Polak, John, 2003: ‘Trade as an Environmental Policy Tool? GEN, Ecolabelling and Trade,’ paper presented at the World Trade Organization Public Symposium: Challenges Ahead on the Road to Cancun, ‘Ecolabelling: Trade Opportunities & Challenges’, 16-18 June 2003. One exception has been the March 1998 submission by the Colombian Government to the WTO CTE CTBT setting out its concerns about the various European ecolabelling schemes for flowers. See WT/CTE/W/76 and G/TBT/W/60, World Trade Organization, Geneva, 9 March 1998.]
...To understand the range of concerns expressed by WTO members, it is important to note that within the WTO context an ecolabel is treated as a specific type of standard, accompanied by a mark of conformity. Therefore, virtually all the concerns WTO members have expressed about standards and conformity assessment procedures, and virtually all the problems they have with implementing the Agreement on Technical Barriers to Trade (TBT), exist in the context of ecolabelling.
[Both the Agreement on Technical Barriers to Trade (TBT Agreement) and the Agreement on Sanitary and Phytosanitary Provisions (SPS Agreement) contain provisions relevant to ecolabelling. For the sake of clarity and simplicity, this paper focuses on the TBT Agreement.]
...The TBT Agreement outlines certain procedural obligations that are intended to ensure that standards, technical regulations and conformity assessment procedures are not prepared, adopted or applied by one member in such a way that they impose unnecessary or unjustified barriers to trade on other members. In particular, Annex 3 of the TBT Agreement outlines a Code of Good Practice (Standards Code): a number of requirements relevant to the development of voluntary standards. The first of these procedural requirements is the use of international standards.
Article F of the Standards Code calls on standards bodies to base their work on relevant existing or imminent international standards. This presents problems in the case of ecolabels. One problem is that, apart from the generic ISO 14020 series of ecolabelling template standards and the generic ISO 14040 life-cycle assessment standards, both of which are tools for developing ecolabels rather than actual ecolabels, there are very few international ecolabels. Ecolabels are generally developed based on national environmental priorities and preferences. They have evolved outside the context of traditional national standards bodies, and therefore outside the context of international standardization infrastructure. Moreover, there is no working definition of ‘international standard’ in the TBT Agreement.
Because there is no legal basis for ensuring that new standards do not overlap or conflict with existing ones, there is no check on the proliferation of ecolabels. Since developing countries are standards takers, some in the trading community argue that a proliferation of ecolabels can greatly increase the cost to these countries of accessing different markets. This is one of the main complaints expressed by developing country exporters. In the case of each of the five ecolabels discussed in this report, there is a variable degree of competition between different standards and frequently there is no scientific information available to justify the differences.
Some experts believe that some bodies that develop ecolabels have been set up for the express purpose of offering an alternative to existing ecolabels, either as a way to add confusion to the marketplace or to provide alternatives with less strict criteria.
[‘Building Bridges: Ethical Standards, Sustainable Development and Trade’, meeting report, Geneva, Switzerland, 12-13 June 2003, meeting sponsored by the Rockefeller Brothers Foundation and GTZ; on file with the author.]
Articles J, K, L and M of the Standards Code address issues related to transparency and coordination. They call on standards bodies to publish a work plan every six months, to associate with national members of ISONet, to allow comment periods of at least 60 days, to publish a notice of the comment period, and to provide drafts of standards for comment to any interested party within the territory of a WTO member. Because most ecolabels are developed by non-governmental bodies outside the traditional standards networks and infrastructure, it is likely that many ecolabel practitioners are unaware of (or lack the means to implement) these
procedural provisions. In some cases, traditional national standards bodies (e.g. ISO member bodies) are unwilling to interact with non-traditional standards bodies developing ecolabels, and vice versa. As a result, it is often very difficult for producers in one country to obtain timely information on the existence or specific requirements of an ecolabel in another country.
[ISONet (the ISO Information Network) is an agreement between standardizing bodies to combine their efforts in order to make information on standards, technical regulations and related matters readily available whenever it is required. See http://www.wssn.net/WSSN/RefDocs/isonetdir/introduction.html .]
Article 5.1.2 of the TBT Agreement requires WTO members to encourage non-governmental standards bodies operating within their territory to ensure that conformity assessment procedures are no stricter than necessary.
The cost of third-party certification has been identified generally as a particular concern of SMEs and low-cost producers in developing countries. From a trade barrier perspective, the important issue with regard to certification costs is whether these costs are relatively higher in developing countries than in developed ones. Statistically significant data on the costs of certification does not exist, but it is widely accepted that certification costs are a function of:
• the availability of domestic certification (and hence accreditation) services;
• the size of the facility; and
• the gap between existing practices and the requirements of the ecolabel.
The accepted wisdom is that conditions in developing countries are such that each of these factors contributes to relatively higher certification costs vis-à-vis those in developed countries. It is also significant that the only conformity assessment procedure accepted by most ecolabelling programmes, and all of the programmes addressed in this report, is independent third-party certification. It would be worthwhile to assess whether some markets would accept second-party certification or self-declarations of conformity for some types of ecolabels under some circumstances.
Article 6.3 of the TBT Agreement requires WTO members to encourage non-governmental standards bodies operating within their territory to be willing to enter into negotiations for the conclusion of agreements on the mutual recognition of conformity assessments procedures. As mentioned above, many ecolabels, including those of the FSC, MSC and FLO, maintain a monopoly over the accreditation of conformity assessment service providers and therefore do not enter into mutual recognition agreements with other competent bodies. FSC auditors are also forbidden from certifying to any other SFM standard. Experience with mutual recognition
agreements is very thin on the ground. However, a system for mutual recognition has been established under the Japanese national organics regulation, whereby Japanese-accredited conformity assessment bodies can enter into ‘trust contract of providing inspection data’ with International Organic Accreditation Service (IOAS)-accredited certifiers in the country of production.
[See, for example, OECD, 2002: Government Regulations Affecting Trade in Products of Organic Agriculture, COM/ENV/TD (2002)86/FINAL, p. 22.]
************************************************************************************
NOTWITHSTANDING THESE WTO LOOPHOLES, THE EUROPEAN COMMISSION CONTINUALLY ENDEAVORS TO EXPLOIT THEM IN AS MANY INDUSTRY SECTORS AS POSSIBLE:
See Eco-Fashion or Eco-Fashism: How Involved is the EU Commission in Promoting 'Market-Based' Eco-Labels as Disguised Trade Barriers?
http://itssddisguisedtradebarriers.blogspot.com/2008/03/eco-fashion-or-eco-fashism-how.html
*************************************************************************************
READERS SHOULD ALSO CONSIDER HOW THE UNITED NATIONS ENVIRONMENT PROGRAM (UNEP) CONTINUES TO PROMOTE NATIONAL / REGIONAL GOVERNMENTAL USE OF SUSTAINABLE DEVELOPMENT-CENTRIC ECO-LABELING SCHEMES AS A FORM OF PUBLIC BEHAVIOR MODIFICATION, APPARENTLY TO EXPLOIT WTO LOOPHOLES
At the World Summit on Sustainable Development in Johannesburg last year, governments urged active work to speed the shift to sustainable production and consumption. They noted
that while all countries must be involved in this effort, the developed countries should take the lead. In February [2003], at UNEP’s Governing Council meeting, ministers voted to strengthen work on sustainable consumption, promote design of sustainable products and services, reinforce voluntary work with business sectors, and increase support for awareness-raising campaigns.
UNEP is also working through the UNEP-SETAC Life Cycle Initiative – and an exciting new project to enhance the image of green lifestyles – to increase the availability and impact of information in this area. As part of the effort to promote more sustainable production and consumption, UNEP has stepped up its activities with the retail sector, whose role lies particularly in helping change consumption patterns.
To realize the importance of this sector, just think about your last retail transaction. It may have involved something as small and simple as a cotton T-shirt or a packet of ground coffee. Or perhaps it was a major purchase – a leather-and-wood armchair or a refrigerator-freezer. We do not ordinarily stop to consider the multitude of environmental and social effects that a single,
seemingly simple transaction can have.
For instance:
resource use – from metal extraction to consumption of water and wood (the latter possibly involving unsustainable forestry);
energy use – by your car if you drove to the store where the purchase was made; by the store itself, any vehicles involved in delivering products to the store, and employees’ personal
vehicles;
by wholesalers;
and by the furniture assembler, leather producer, animal breeder, wood cutter, fabric mill, coffee packager, and so on.
And don’t forget the CO2 emissions connected with all that energy consumption;
waste generation – any packaging you throw away when you get home is just the tail end of a long stream that begins in the mine, the coffee grove, the farmyard or the forest;
negative land use effects – e.g. damage to the landscape from suburban megastores and surface sealing by their huge parking lots;
possibly, dubious labour standards at the store or farther up the supply chain;
the risk of health effects for you and your family, as well as store and supplier employees, if the use of hazardous substances (e.g. arsenic in wood treatment, heavy metals in appliance
manufacture) is involved.
See Shopping for a better world: sustainability and retailing, Industry and Environment Volume 26 No. 1 January – March 2003, United Nations Environment Program at: http://www.uneptie.org/media/review/vol26no1/UNEP0103.PDF .
Showing posts with label TBT. Show all posts
Showing posts with label TBT. Show all posts
Monday, March 31, 2008
Wednesday, March 12, 2008
Since 2005 China Has Tried To Amend The WTO TBT Agreement & Favored Open, Not Proprietary Standards: Why Has China Not Learned The Value Of IP Rights?
http://www.ip-watch.org/weblog/index.php?p=599
China Leads Developing Country Push For Balance In IP And Standards
Intellectual Property Watch
24 April 2007
By William New
BEIJING - China’s rapid development can be seen everywhere in the capital, where the skyline is perforated by construction cranes in all directions. But China’s vigorous effort to update structures does not stop at its borders. China is one of several leading developing countries that have become players on the global economic stage and now are demanding a balancing of global governance institutions.
Key developing countries such as China, Brazil, India and South Africa are increasing their efforts to influence global standards-setting proportionate to their rising economic might. But this effort may require substantive changes to the existing structure, changes that some say are already taking place.
A key focus is on the treatment of standards for technology and the related intellectual property rights. Yi Xiaozhun, vice-minister of the Chinese Ministry of Commerce, said at a conference last week that standards and IP rights are critical for economies such as China’s that are basing their development on science and technology. But, he said, an “inappropriate convergence” between standards and IP rights has “caused problems.”
“Delayed or inadequate IPR [intellectual property rights] disclosure, stringent IPR licensing conditions and expensive licensing fees run counter to fair competition, hinder the promotion and application of new technologies, obstruct the normal operation of international trade and impede the harmonious development of global economy and society,” Yi said at an 17-18 April conference cosponsored by the commerce ministry and other Chinese agencies, as well as Sun Microsystems. “Developing countries are the worst hit by such problems which effectively hinders their greater participation in economic globalization.”
Chinese officials such as Yi say international standards bodies, which are typically based in western developed countries, have begun to recognise the imbalance in their policies that insufficiently reflect the interests of developing countries. “Standards bodies are mainly controlled by developed countries,” he said. As a result, new standards putting developing countries in an “underprivileged position” have “become new obstacles to international trade.”
Yi urged the World Trade Organization to take into account changes made in the standards bodies. China has argued at the WTO since 2005 for changes to the WTO Agreement on Technical Barriers to Trade (TBT), and officials at the conference vowed to continue the fight.
“China holds that in order to ensure smooth implementation of the TBT agreement, attention should be given on the one hand to the efficiency and quality of setting international standards, and on the other hand to the difficulties members face in adopting international standards,” he said.
A primary concern is that standards in the public interest can be affected when it turns out that hidden underlying patents give monopolistic licensing power to companies, usually in the developed countries that own most of the world’s patents. Yi suggested that consortia, groups of industry experts and others assembled to accomplish tasks such as a standards change, may use monopoly power to push their interests in standard-setting. “We cannot deny that an international deviation effect arises,” he said.
In the speech, Yi stressed China’s seriousness about further increasing efforts to protect and enforce intellectual property rights, even though “IPR has created new barriers in the form of standards which have harmed developing countries.”
Manuel Lousada Soares, Brazil’s deputy secretary for industrial technology at the Ministry of Development, Industry and Foreign Trade, did not fault companies for protecting their innovations or consortia for promoting standards. He said the problem is when standards impact public interest issues.
Soares said the TBT agreement states that a technical regulation should be “presumed not to create an unnecessary obstacle to international trade.” He cited efforts by standards bodies to improve early disclosure of patents in standards. Soares reiterated the concern about hidden patents getting included in standards, and said standards can be developed without the technical solutions protected by patents. Brazil backs standards bodies’ efforts to find ways enforce early disclosure, and encourages more cooperative work on the issues, including at the WTO, WIPO and the standards organisations, he said. This includes better analysis of the issues as well as better definitions of terms, he said.
China’s Strategy for Standards
Ni Guangnan, a fellow at the Chinese Academy of Engineering, criticised the standards status quo and laid out a strategy for China to gain influence over standards. He said proprietary standards “cause unfair competition.”
“In the IT [information technology] field, some technologies or products prevail and are thus accepted as de facto standards,” he said. “If these standards are not made open, their intellectual property right will be owned by companies developing them and then become proprietary standards, which will further prevent other rivals from growth and contribute to the monopoly of the companies. For example, Microsoft’s Windows, Office and IE browser.”
Proprietary standards have the negative impact of impeding fair competition, imposing high costs on users, and are a security risk, he said. Therefore, “the adoption of open standards will be promoted,” he said, because they generate fair competition, impose less burden on users, and provide greater system security.
Ni said China, in order to help its companies which have been struggling with the high royalty payments charged by patent-holders whose technologies were accepted in standards, plans to a series of actions. They will form their own patent pools, and will gain the support of international standards development organisations, and will participate in the drafting of standards favourable to China. Government agencies will assist companies in responding to intellectual property rights disputes.
Another plan is to back ex ante RAND terms, meaning disclosure of intellectual property rights before the establishment of a standard, and [license] standards on a reasonable and non-discriminatory basis, which has gained support of the US Justice Department. Also, China will support open-source code in software “because its use, copying, modification and re-issuance don’t require royalty,” he said. China also will support open standards for critical areas, he said. De facto standards for Microsoft’s Office have been the dominant document format, which Ni said “has hindered fair competition and prevented manufacturers from getting access to public and important information.”
Richard Suttmeier, a political science professor at the University of Oregon (US), suggested that the rise of “fragmenting” free-trade agreements might have implications for standardisation. He also said the rise of large new economies voicing dissatisfaction raises the question of how much existing economies are interested in reforming organisations or replacing them with something else, as well as to what extent it would be possible to raise coalitions to bring about change.
Zhang Naigen, law professor and director of the international law and intellectual property study centers at Fudan University (China), said the US and the European Union emphasized private rights of intellectual property rights but that they differ on antitrust law. China is still working on its antitrust law, he said.
Andrew Updegrove, an attorney at Gesmer Updegrove in Boston who represents standards coalitions, said patent holders might be the “new colonialists” and said that those who can control standards can control markets. He said a danger is if newly large economies who make their own standards. He encouraged policymakers to seek standards that are in the best interest of all.
Rishob Ghosh, senior researcher at the Maastricht (Netherlands) United Nations University, cited examples of standards that became institutionalised through heavey popular use even though better technologies followed, such as keyboards.
Patrick Rata of the World Trade Organization trade and environment division said the 2005 WTO report on trade showed the application of standards can have beneficial and negative effects on trade. He said the WTO TBT Agreement is flexible on the measures governments take, but says they should not unnecessarily restrict trade. The agreement contains encouragements to harmonise, and says standards should be developed in a transparent and indiscriminate way. Rata also said it would be up to China to decide whether to pursue its concerns about the TBT and standards and to “gauge the interest of other governments” in changing the agreement. China brought it up again in March, he said.
US Officials Busy in China
A number of US officials have been busy in Beijing in recent weeks for a variety of reasons. These include talks on innovation, intellectual property rights and standards, with officials such as Mark Lewis, a US standards expert. Last week, Chris Adams, soon to be the new USTR official in China, was in town with fellow USTR officials Tim Stratford, assistant USTR for China Affairs, and Audrey Winter, his deputy. Last week officials from the two governments met on the Joint Commission on Commerce and Trade (on structural issues and trade remedies), and this week a planning meeting was expected to held in Beijing for the Strategic Economic Dialogue, an event led by Treasury Secretary Henry Paulson in late May. The JCCT involves USTR and the US Commerce Department together.
Audrey Winter, deputy assistant US trade representative on China affairs, speaking on her own behalf, said in the United States, the government generally leaves standards-setting to private organisations as government might not know what is best for consumers or business. China is considering its anti-monopoly law, and Winter said recent legal cases and statements by US antitrust authorities have set boundaries for action in the area in the US. International trade rules, she said, are aimed at getting government out of the market.
Speaking at a separate 19 April conference at Beijing (Peking) University, Mark Cohen, the US Patent and Trademark Office representative in Beijing, highlighted the debate in China over whether intellectual property rights are a private right, as in the west, or a public right. He referred to Chinese government subsidies for domestic patent applications and said treating IP rights as a private right encourages “robust” innovation, and would lead China to become “a truly innovative economy.” Cohen also downplayed the role of foreign firms in the Chinese IP market as very small.
Also at the 19 April conference, Sun Microsystems Chief Standards Officer Carl Cargill said a lack of research into how standards related to information and communications technology are made makes it an “uncharted area” made up of side deals” consisting of “whispers” and “hopes.” He said no one coordinates consortia and that there are more than 500 standards organisations with few changes since the 1970s. “They never die,” he said.
Cargill also said that standards organisations are unwilling to take full responsibility for identifying who owns the intellectual property rights underneath standards, so the costs of standards are unknown but there is no way to avoid the rights. If one doesn’t pay for them, it’s illegal, if they don’t use them they’re out of the competition, and nations that try to make their own standards as China did with mobile standard WAPI are stopped, he said.
China Leads Developing Country Push For Balance In IP And Standards
Intellectual Property Watch
24 April 2007
By William New
BEIJING - China’s rapid development can be seen everywhere in the capital, where the skyline is perforated by construction cranes in all directions. But China’s vigorous effort to update structures does not stop at its borders. China is one of several leading developing countries that have become players on the global economic stage and now are demanding a balancing of global governance institutions.
Key developing countries such as China, Brazil, India and South Africa are increasing their efforts to influence global standards-setting proportionate to their rising economic might. But this effort may require substantive changes to the existing structure, changes that some say are already taking place.
A key focus is on the treatment of standards for technology and the related intellectual property rights. Yi Xiaozhun, vice-minister of the Chinese Ministry of Commerce, said at a conference last week that standards and IP rights are critical for economies such as China’s that are basing their development on science and technology. But, he said, an “inappropriate convergence” between standards and IP rights has “caused problems.”
“Delayed or inadequate IPR [intellectual property rights] disclosure, stringent IPR licensing conditions and expensive licensing fees run counter to fair competition, hinder the promotion and application of new technologies, obstruct the normal operation of international trade and impede the harmonious development of global economy and society,” Yi said at an 17-18 April conference cosponsored by the commerce ministry and other Chinese agencies, as well as Sun Microsystems. “Developing countries are the worst hit by such problems which effectively hinders their greater participation in economic globalization.”
Chinese officials such as Yi say international standards bodies, which are typically based in western developed countries, have begun to recognise the imbalance in their policies that insufficiently reflect the interests of developing countries. “Standards bodies are mainly controlled by developed countries,” he said. As a result, new standards putting developing countries in an “underprivileged position” have “become new obstacles to international trade.”
Yi urged the World Trade Organization to take into account changes made in the standards bodies. China has argued at the WTO since 2005 for changes to the WTO Agreement on Technical Barriers to Trade (TBT), and officials at the conference vowed to continue the fight.
“China holds that in order to ensure smooth implementation of the TBT agreement, attention should be given on the one hand to the efficiency and quality of setting international standards, and on the other hand to the difficulties members face in adopting international standards,” he said.
A primary concern is that standards in the public interest can be affected when it turns out that hidden underlying patents give monopolistic licensing power to companies, usually in the developed countries that own most of the world’s patents. Yi suggested that consortia, groups of industry experts and others assembled to accomplish tasks such as a standards change, may use monopoly power to push their interests in standard-setting. “We cannot deny that an international deviation effect arises,” he said.
In the speech, Yi stressed China’s seriousness about further increasing efforts to protect and enforce intellectual property rights, even though “IPR has created new barriers in the form of standards which have harmed developing countries.”
Manuel Lousada Soares, Brazil’s deputy secretary for industrial technology at the Ministry of Development, Industry and Foreign Trade, did not fault companies for protecting their innovations or consortia for promoting standards. He said the problem is when standards impact public interest issues.
Soares said the TBT agreement states that a technical regulation should be “presumed not to create an unnecessary obstacle to international trade.” He cited efforts by standards bodies to improve early disclosure of patents in standards. Soares reiterated the concern about hidden patents getting included in standards, and said standards can be developed without the technical solutions protected by patents. Brazil backs standards bodies’ efforts to find ways enforce early disclosure, and encourages more cooperative work on the issues, including at the WTO, WIPO and the standards organisations, he said. This includes better analysis of the issues as well as better definitions of terms, he said.
China’s Strategy for Standards
Ni Guangnan, a fellow at the Chinese Academy of Engineering, criticised the standards status quo and laid out a strategy for China to gain influence over standards. He said proprietary standards “cause unfair competition.”
“In the IT [information technology] field, some technologies or products prevail and are thus accepted as de facto standards,” he said. “If these standards are not made open, their intellectual property right will be owned by companies developing them and then become proprietary standards, which will further prevent other rivals from growth and contribute to the monopoly of the companies. For example, Microsoft’s Windows, Office and IE browser.”
Proprietary standards have the negative impact of impeding fair competition, imposing high costs on users, and are a security risk, he said. Therefore, “the adoption of open standards will be promoted,” he said, because they generate fair competition, impose less burden on users, and provide greater system security.
Ni said China, in order to help its companies which have been struggling with the high royalty payments charged by patent-holders whose technologies were accepted in standards, plans to a series of actions. They will form their own patent pools, and will gain the support of international standards development organisations, and will participate in the drafting of standards favourable to China. Government agencies will assist companies in responding to intellectual property rights disputes.
Another plan is to back ex ante RAND terms, meaning disclosure of intellectual property rights before the establishment of a standard, and [license] standards on a reasonable and non-discriminatory basis, which has gained support of the US Justice Department. Also, China will support open-source code in software “because its use, copying, modification and re-issuance don’t require royalty,” he said. China also will support open standards for critical areas, he said. De facto standards for Microsoft’s Office have been the dominant document format, which Ni said “has hindered fair competition and prevented manufacturers from getting access to public and important information.”
Richard Suttmeier, a political science professor at the University of Oregon (US), suggested that the rise of “fragmenting” free-trade agreements might have implications for standardisation. He also said the rise of large new economies voicing dissatisfaction raises the question of how much existing economies are interested in reforming organisations or replacing them with something else, as well as to what extent it would be possible to raise coalitions to bring about change.
Zhang Naigen, law professor and director of the international law and intellectual property study centers at Fudan University (China), said the US and the European Union emphasized private rights of intellectual property rights but that they differ on antitrust law. China is still working on its antitrust law, he said.
Andrew Updegrove, an attorney at Gesmer Updegrove in Boston who represents standards coalitions, said patent holders might be the “new colonialists” and said that those who can control standards can control markets. He said a danger is if newly large economies who make their own standards. He encouraged policymakers to seek standards that are in the best interest of all.
Rishob Ghosh, senior researcher at the Maastricht (Netherlands) United Nations University, cited examples of standards that became institutionalised through heavey popular use even though better technologies followed, such as keyboards.
Patrick Rata of the World Trade Organization trade and environment division said the 2005 WTO report on trade showed the application of standards can have beneficial and negative effects on trade. He said the WTO TBT Agreement is flexible on the measures governments take, but says they should not unnecessarily restrict trade. The agreement contains encouragements to harmonise, and says standards should be developed in a transparent and indiscriminate way. Rata also said it would be up to China to decide whether to pursue its concerns about the TBT and standards and to “gauge the interest of other governments” in changing the agreement. China brought it up again in March, he said.
US Officials Busy in China
A number of US officials have been busy in Beijing in recent weeks for a variety of reasons. These include talks on innovation, intellectual property rights and standards, with officials such as Mark Lewis, a US standards expert. Last week, Chris Adams, soon to be the new USTR official in China, was in town with fellow USTR officials Tim Stratford, assistant USTR for China Affairs, and Audrey Winter, his deputy. Last week officials from the two governments met on the Joint Commission on Commerce and Trade (on structural issues and trade remedies), and this week a planning meeting was expected to held in Beijing for the Strategic Economic Dialogue, an event led by Treasury Secretary Henry Paulson in late May. The JCCT involves USTR and the US Commerce Department together.
Audrey Winter, deputy assistant US trade representative on China affairs, speaking on her own behalf, said in the United States, the government generally leaves standards-setting to private organisations as government might not know what is best for consumers or business. China is considering its anti-monopoly law, and Winter said recent legal cases and statements by US antitrust authorities have set boundaries for action in the area in the US. International trade rules, she said, are aimed at getting government out of the market.
Speaking at a separate 19 April conference at Beijing (Peking) University, Mark Cohen, the US Patent and Trademark Office representative in Beijing, highlighted the debate in China over whether intellectual property rights are a private right, as in the west, or a public right. He referred to Chinese government subsidies for domestic patent applications and said treating IP rights as a private right encourages “robust” innovation, and would lead China to become “a truly innovative economy.” Cohen also downplayed the role of foreign firms in the Chinese IP market as very small.
Also at the 19 April conference, Sun Microsystems Chief Standards Officer Carl Cargill said a lack of research into how standards related to information and communications technology are made makes it an “uncharted area” made up of side deals” consisting of “whispers” and “hopes.” He said no one coordinates consortia and that there are more than 500 standards organisations with few changes since the 1970s. “They never die,” he said.
Cargill also said that standards organisations are unwilling to take full responsibility for identifying who owns the intellectual property rights underneath standards, so the costs of standards are unknown but there is no way to avoid the rights. If one doesn’t pay for them, it’s illegal, if they don’t use them they’re out of the competition, and nations that try to make their own standards as China did with mobile standard WAPI are stopped, he said.
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