The issue of non-violation complaints under the TRIPS Agreement has been a matter of intense debate in the WTO over the years. A moratorium on such complaints is in place but not all WTO members on the future course.
Article 64(2) of the TRIPS Agreement states that Article XXIII (1)(b) and (c) of GATT 1994 shall not apply to the settlement of disputes under the TRIPS Agreement for a period of five years from the date of entry into force of the WTO Agreement i.e 2000.
Article XXIII (1)(b) and (c) of the GATT 1947 which refers to nullification and impairment states that if any contracting party should consider that any benefit accruing to it directly or indirectly under this Agreement (in the context of Article 64 of the the TRIPS Agreement, it would be the TRIPS Agreement) is being nullified or impaired or that the attainment of any objective of the Agreement is being impeded as a result of the application by another contracting party of any measure, WHETHER OR NOT IT CONFLICTS WITH THE PROVISIONS OF THIS AGREEMENT or the existence of any other situation, then it can initiate dispute settlement proceedings under the DSU. In other words, these are called non-violation complaints (NVCs) since there could be a dispute even where the express provisions of any agreement have not been violated.
The WTO members have been extending the moratorium on NVC in the context of the TRIPS Agreement. Article 64(3) of the TRIPS Agreement also states that the TRIPS Council shall examine the scope and modalities for such NVC complaints and shall submit its recommendations to the Ministerial Conference for approval. These recommendations or any decision to extend the period in para 2 of Article 64 shall be made by consensus.
The bone of contention now is that if ALL WTO members do not agree by consensus to extend the period of exemption of the applicability of dispute settlement of NVCs under TRIPS, will such complaints automatically lie? On the other hand, should there be a consensus on scope and modalities for such complaints ti lie?
Nirmalya Syam, in a recent paper, has addressed this issue in detail as well as the implications it has for developing countries. The paper concludes:
Article 64(2) of the TRIPS Agreement states that Article XXIII (1)(b) and (c) of GATT 1994 shall not apply to the settlement of disputes under the TRIPS Agreement for a period of five years from the date of entry into force of the WTO Agreement i.e 2000.
Article XXIII (1)(b) and (c) of the GATT 1947 which refers to nullification and impairment states that if any contracting party should consider that any benefit accruing to it directly or indirectly under this Agreement (in the context of Article 64 of the the TRIPS Agreement, it would be the TRIPS Agreement) is being nullified or impaired or that the attainment of any objective of the Agreement is being impeded as a result of the application by another contracting party of any measure, WHETHER OR NOT IT CONFLICTS WITH THE PROVISIONS OF THIS AGREEMENT or the existence of any other situation, then it can initiate dispute settlement proceedings under the DSU. In other words, these are called non-violation complaints (NVCs) since there could be a dispute even where the express provisions of any agreement have not been violated.
The WTO members have been extending the moratorium on NVC in the context of the TRIPS Agreement. Article 64(3) of the TRIPS Agreement also states that the TRIPS Council shall examine the scope and modalities for such NVC complaints and shall submit its recommendations to the Ministerial Conference for approval. These recommendations or any decision to extend the period in para 2 of Article 64 shall be made by consensus.
The bone of contention now is that if ALL WTO members do not agree by consensus to extend the period of exemption of the applicability of dispute settlement of NVCs under TRIPS, will such complaints automatically lie? On the other hand, should there be a consensus on scope and modalities for such complaints ti lie?
Nirmalya Syam, in a recent paper, has addressed this issue in detail as well as the implications it has for developing countries. The paper concludes:
Article 64 of the TRIPS Agreement made the dispute settlement provisions of the GATT applicable to TRIPS subject to the exceptions specified in that provision. The only exception specified was in relation to non-violation and situation complaints, on which it was agreed that further examination on the scope and modalities of such complaints to TRIPS was required. Pending an agreement on this fundamental question, it would be pragmatic to keep the initiation of non-violation and situation complaints under suspension, which the moratorium does.It would be a dramatic development if a dispute arises in the context of the applicability of NVC under TRIPS. What would essentially happen is that the terrain of debate on the moratorium and its terms will shift from the political economy of the TRIPS and Ministerial Conference to one of the large rooms of a panel proceedings. De-politicising a provision, WTO style?
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