GUJARAT MARITIME UNIVERSITY

CAMPUS GNLU, GANDHINAGAR, GUJARAT

www.gujaratmaritimeuniversity.in

THE LAW OF WORLD TRADE ORGANISATION

PROJECT ON

“Role of International Bodies In Development Of Nations Vis-A-Vis Transfer Of Technology

With Reference To World Trade Organisation ”

OCTOBER, 2019

Submitted by,

Siddharth Pandey

(GMU 2019 1219)

Project Submitted to,

Prof. Dr. Udayakumara Ramakrishna B.N.

(Faculty)   
 TABLE OF CONTENTS

Introduction…………………………………………………………………….....................5

Chapter: 2, Attempt of International Community in assuring efficient technology

transfer……………………………………………………………………………………...5

Chapter: 3, Agreements made by WTO with respect to transfer of technology

…………………………………………………………………………………………….....5
Chapter: 4, Technology transfer for sustainable development……………….................5

Conclusion……………………………………………………………………………..….13

Bibliography..............................…………………………………………………..……....15
 Introduction
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It has been a trend that developing countries are being ruled by developed countries without
doing so explicitly, which mainly is a result of the heavy investment made by these countries.
For example, China has offered to built many infrastructural projects in Africa with a promise
of future payment knowing that Africa will not be in a position to pay in the near future, this
will ultimately lead to China gaining rights such as extraction rights or over some part of the
mineral rich country. This form of neo-colonialism will continue to exist as long as there is no
similarity in the development index of countries. Till now there is only one such policy which
specifically deals with this technology transfer which is the UNCTAD code of conduct on
transfer of technology.

When technology plays such an important role in development of a country yet the
international organizations have failed to make proper guidelines for successful transfer of
technology from a developed nation to a developing nation. This transfer becomes more
imperative as a number of developing countries have huge natural resources but does not have
the means to tap it efficiently due to which they have to either rely on developed countries or
use inefficient technology to tap the same.

This paper discusses the attempts made by the international bodies in trying to bring
technology transfer from developed nations to developing nations with brief analysis of
UNCTAD code of conduct and TRIPS and its failure to successfully bring any change in
technology transfer. This paper concludes by saying that it is not possible for the international
organizations to come up with any instrument which mandates effective transfer of new
technology as they are bound by the wishes of the developed nations due to the funding the
receive by them and the possible solution is to make the developing nations as technology
creators.

Developing nations can be made technological creators if proper investment is done and at the
same time is monitored by an international community, this role should be taken by IMF and
UNCTAD. Before reaching towards the conclusion we need to first see what are the present
attempts made by the International bodies to transfer technology to increase development.

Chapter2: International Conventions & Treaties as an Attempt of

International Community in assuring efficient technology transfer
----------------------------------------------------------------------------------------------------------------
“The Charter of Economic Rights and Duties of States” 1 was the first instrument to talk about
technological transfer from developed to non developed nations. It does not contain explicit
transfer of such technology but it is based on the principle of equity. Also Article 18 and 19 of
the charter gives special preference to developing countries when it comes to matter of equity.
The main reason it has failed to do anything for the developing nation is that it is
unenforceable in nature and no international body oversees its compliance.

Regional Instruments for transfer of technology-These instruments do not explicitly deal with
the transfer of technology, but are Standard setting Instruments such s NAFTA, EU, ASEAN
which makes transfer of technology easier. The main of these regional instruments are
successful trade and not transfer of technology.

The only instrument which can be said to be directly related to transfer of technology is the
UNCTAD code of conduct Code of conduct, the main issue with this came up during the time
of negotiations when the nations were divided in to three groups 3 different group of nations,
the G77 countries which consisted of the developing nations and wanted the code to be
strictly enforceable, the group of developed nations known as Group B which did not wish for
the code to be binding and the socialist nations.

This code of conduct contains many positive measures for technology transfer such as “the
legitimization of specific domestic policies to promote the transfer and diffusion of
technology; rules governing the contractual conditions of transfer of technology transactions;
special measures on differential treatment for developing countries; and measures that would
strengthen international cooperation”2

1
Adopted by United Nations General Assembly, via, UNGA Res. 3281(xxix),UN GAOR, 29th Sess.,
Suppl.No.31(1974)50.
However under the pressure of the developed countries this code was only made as set of
guideline and was not enforceable later it was converted to a treaty which could be
subsequently ratified by nations. This has made it difficult for proper transfer of technology as
it is upto the nations to ratify it or not and is not strictly enforceable.

It is given that no developed nation will ratify such an instrument as it will restrict its
economical progress due to all the obligations it has under this code. Moreover many scholars
feel that “The drafting of the UNCTAD Code of Conduct is not as radical an exercise as it has
been considered by some countries. After all, the Code does recognize the existence of the
international patent system and leaves open the possibility that technology exporters will raise
their prices for technology in response to an effective Code.”3

International legal instruments whether these are treaties, agreements, regulations or

conventions in the area of intellectual property rights involved in technology transfer greatly
encourage and facilitates the sharing of knowledge and transfer of technology among the
countries. In the past two decades, specific provisions on transfer of technology have been
incorporated into various international instruments. Such provisions have different objectives
and scope, and different modes of implementation, including the provision of financing, and
are subject to different terms and conditions and all these provisions and instruments
incorporated for widening the legal framework of transfer of technology, there are wide
variety of international legal instruments of technology transfer and all those cant overview
here, therefore, this chapter thrash out some selected international legislation on intellectual
property with regard to technology transfer.4

As for the case of licensing contracts, the enforcement of IPRs at the international level has
been mostly performed through multilateral agreements, however, with regard to the
particular issue of international transfer of technology, it is sufficient to concentrate on the
development of four particular international agreements Paris Convention, Berne Convention,
the Rome Convention and the intellectual property in respect of integrated circuits (IPIC)
Treaty, these treaties have all been systematically incorporated into what is now known as the

2
Muchlinski, Peter T. Multinational Enterprises and the Law (Oxford: Blackwell Publishers), 2nd edn (1999) at
p 427-429
3
Article 7 of Trade Related Intellectual Property Rights, 1994
4
See. UNCTAD publications, (2001). “Compendium of International Arrangements on Transfer of
Technology”, P. 5.
most imperative and comprehensive international agreement on the subject, the TRIPS
agreement.5 The said conventions and treaties have been available to the technology owners,
thus we will discuss shortly these selected international legal agreements or regimes to
analysis their governing role for transfer of technology.

2.1 Paris Convention for the Protection of Industrial Property

The Paris Convention was the first international agreement to deal with the system of
trademarks and patents, the Convention grants legal protection to trade marks on the grounds
of national treatment6, and in addition the Paris Convention established the right of priority by
providing a six month priority to a trademark application. 7Another provision facilitates the
transfer of patents rights from one country to another is article 4 bis which established the
principle of independence of patents. Under this principle cancelation or expiration of patent
in one country of the convention does not affect the expiration or cancellation of a patent for
the same invention in another member state of the Paris Convention. 8 Being one of the oldest
convention for the protection of IP rights, the Paris convention has been subject to many
amendments and revisions and the idea of possible revision was first advanced in 1974 when
the Director General of WIPO created an ad hoc group of governmental experts, which in
1977 adopted a declaration which served as a basic document on the revision of Paris
Convention. Under the declaration access to technology and transfer of technology and
dissemination of knowledge were at the heart of declaration. 9Other then the articles 2 and 4
some other part of the Paris Convention also governs the international patent system.

2.2 Berne Convention and the Rome Convention

5
See, Par Yi Shin Tan. (2009). “International Trade Policy for Technology Transfers: Legal and Economic
Dilemmas on Multilateralism verses Bilateralism”. Kluwer Law International. The Netherland, P. 85.
6
Under WTO: the principle of giving others the same treatment as one’s own nationals. GATT Article 3 requires
that imports be treated no less favourably than the same or similar domestically-produced goods once they have
passed customs. GATS Article 17 and TRIPS Article 3 also deal with national treatment for services and
intellectual property protection.
7
Ibid. p. 93
8
Tagi Sagafi-Nejad,Richard W. Moxon,Howard V. Perlmutter. (2013).” Controlling International Technology
Transfer: Issues, Perspective and Policy Implications”. Pergamon Press. New York. USA. P. 68-69
9
Julio Faundez, Celine Tan. (2010). “International Economic Law, Globalisation and Developing Countries”.
Edward Elgar Publishing. P. 313
The Berne Convention only applied to printed works and thus did not help copyright holders
defend against the new technologies. To address the perceived need for strong legislative
protection for recorded works, the Rome Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting Organizations was concluded by members of
WIPO on October 26, 1961. It extended copyright protection from the author of a work to the
creators and producers of particular work. These "fixations" include media such as
audiocassettes, CDs, and DVDs. Berne and Rome conventions widened the scope and
protection of copyrights and related rights to many technologies and these two conventions
are also the base of WIPO Copyright Treaty (WCT) and WIPO Performance and Phonograms
Treaty (WPPT).

2.3 European Legislation on Technology Transfer

The European Commission adopted on 21 March 2014 new competition rules for the
assessment of technology transfer agreements (Technology Transfer Block Exemption
Regulation TTBER124 and Guidelines), through which a licensor permits a licensee to exploit
patents, know-how or software for the production of goods and services. The new rules
replace the previous TTBER and Guidelines from 1 May 2014 onwards. The European
Commission adopted a new Technology Transfer Block Exemption Regulation (the TTBER)
and accompanying Guidelines to replace the regime currently in place and this will impact on
the risk of including certain clauses in technology transfer agreements and may require parties
to amend existing agreements to remain covered by the exemption. Following is little more
detail about the role of new TTBER and few other European regulations in the technology
transfer and TOT agreements.

Chapter 3: Agreements made by WTO with respect to transfer of

technology
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The role of WTO is to ease trade between countries. Many Agreements have been made to
achieve this which includes Trade Related Intellectual Property Rights (TRIPS), General
Agreement on Trade in Services (GATS), the Agreement on Trade-Related Investment
Measures (TRIMS), Agreement on Sanitary and Phytosanitary Measures (SPS), the
Agreement on Technical, Barriers to Trade (TBT), and the Government Procurement
Agreement.

Article 7 of the TRIPS says that “The protection and enforcement of intellectual property
rights should contribute to the promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of producers and users of technological
knowledge and in a manner conducive to social and economic welfare, and to a balance of
rights and obligations”10
At the same time Article 27 of the agreement says that patents are available to any new
technology in any field. The main objective of TRIPS is not successful transfer of property
but protection of the rights of the inventor. It does encourage innovation of new technology
as protection of any invention is seen as the right of the inventor.11

It is applicable to all the countries equally regardless of the development status, except
developing countries were given more time to change there domestic regime as per TRIPS.In
most part this agreement is highly detrimental for developing countries as it makes
technology more expensive due to strong ownership rights, usage of such technology is also
restricted.12

Moreover, TRIPS has not benefitted low income countries in terms of foreign investment but
only middle income countries.13 Beneficial measure of TRIPS such as compulsory licencing,
parallel import is not being able to properly benefit the developing nations as they do not
have the legal and technical expertise to implement it. 14 Technology life in todays time is less
than 20 years which is the patentable period as per Article 33, even when developing
countries could use the technology it will be outdate by then.

3.1: SPS and TBT Agreement

10
Zuijdwijk, “The UNCTAD Code of Conduct on theTransfer of Technology”McGILL LAW JOURNAL 24(1978)
at 586
11
Oracle America, Inc. v. Google, Inc, 750 F.3d 1381,
12
J.-F. Morin and R. Gold, “An Integrated Model of Legal Transplantation: The Diffusion of Intellectual
Property Law in Developing Countries, International Studies Quarterly (2014) 58, at 781–792,
http://www.chaire-epi.ulaval.ca/sites/chaire-epi.ulaval.ca/files/publications/morin_gold_2014.pdf
13
Blouin, Heymann & Drager Trade and Health. McGill-Queen's University Press. (2007) at p. 33.
14
Finger, J. Michael "The WTO's special burden on less developed countries"(PDF). Cato Journal. (2000). 19
(3)..
The SPS agreement mostly deals with sanitary requirement wrt to importation of goods, at
the same time it encourages harmonization of technology and regulations 15 so as to maintain a
unilateral standard of food safety and requirement. The TBT agreement deals with easing the
barriers to trade of easier trade between countries.

The motive of both these agreements is not successful transfer of technology to developing
nations but maintenance of international standard, safety requirement and general ease of
trade. There is no mandate on developed countries to transfer technology.

3.2: Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement

Developing countries, in particular, see technology transfer as part of the bargain in which
they have agreed to protect intellectual property rights. The TRIPS Agreement 16 includes a
number of provisions on this. For example, it says one of the purposes of protecting
intellectual property is to promote innovation and technology transfer, and it requires
developed countries’ governments to provide incentives for their companies to transfer
technology to least-developed countries.17Article 7 (“Objectives”) states that the protection
and enforcement of intellectual property rights should contribute to the promotion of
technological innovation and to the transfer and dissemination of technology, to the mutual
advantage of producers and users of technological knowledge and in a manner conducive to
social and economic welfare, and to a balance of rights and

The Article 66(2) specifically deals with the technology transfer which says developed
countries members shall provide incentives to enterprises and institutions in their territories
for the purpose of promoting and encouraging technology transfer to least developing country
members in order to enable them to create a sound and viable technological base. 18 Mostly the
TRIPS Agreement explicitly deals with intellectual property rights, nevertheless, it has a key
role for international technology transfer and many of its provision expressly speak about
transfer of technology.

3.3: Trade Related Investment Measures (TRIMS) Agreement

15
Article 3 of SPS Agreement
16
The TRIPS is an international agreement administered by the WTO which establishes the minimum standards
for many forms of intellectual property protection in member countries of the WTO, including copyright. The
substantive provisions of TRIPS do not differ drastically from the Berne Convention.
17
World Trade Organisation. Technology Transfer. [ONLINE] Available at:
https://www.wto.org/english/tratop_e/trips_e/techtransfer_e.htm.
18
The Agreement on Trade-Related Investment Measures (TRIMS) recognizes that certain
investment measures can restrict and distort trade. It states that WTO members may not apply
any measure that discriminates against foreign products or that leads to quantitative
restrictions, both of which violate basic WTO principles. 19 While there is no multilateral
agreement that deals explicitly with technology transfer, however, the TRIMS agreement is
important because of the strong connection between technology transfer and FDI.

Trade and development policies are a key determinant of international technology diffusion.
One set of trade policies that is often motivated on the basis of international technology
diffusion objectives is TRIMS which discriminate against imports by creating incentives
(other than import tariffs) to source input from domestic producers. A motivation for TRIMS
is often that foreign firms might be expected to transfer knowledge to ensure that local input
satisfy their specifications.20

Including the above discussed agreements and treaties, there are many others legal
frameworks which facilitate the technology transition such as Patent Cooperation Treaty
(PCT), Regional and Free Trade Agreements, Bilateral Investment Treaties, The Proposed
Access to Knowledge Treaty which is also called (A2K) and many other international legal
instruments for facilitating the transfer process and determining the right and duties of host
and guest countries and companies, however, at this stage the author can’t discuss all those
important international instruments in more depth and detail.

Chapter4: Technology transfer for sustainable development

------------------------------------------------------------------------------------------------

In United Nations Conference on the Human Environment of 1972 need for sustainable
development came up. As per principle 9 of the conference “environmental deficiencies

19
World Trade Organisation.(2015). Agreement on Trade Related Investment Measures. [ONLINE] Available
at: https://www.wto.org/english/tratop_e/invest_e/invest_info_e.htm. [Accessed 06 June 15].
20
Publié par Bernard M. Hoekman,Beata K. Smarzynska Javorcik. (2006). “Global Integration and Technology
Transfer”. A co publication Macmillan and the World Bank, Washington DC. P. 13
generated by the conditions of underdevelopment and natural disasters pose grave problems
and can be best be remedied by accelerated development through the transfer if substantial
quantities of financial and technological assistance as supplement to the domestic effort of
the developing countries and such timely assistance as may be required.”21
Similarly principle 12 says that resources should be made available so they can put
environmental safeguards to their development planning. Article 20 provides for “flow of
updated scientific information and transfer of experience to support scientific research and
development in developing countries.”
The importance of these principles cannot be over-emphaised considering the fact that out of
the 20 most polluted countries in the world 18 are developing countries, including India at
number 8.22

4.1: Failure of any proper instrument of technology

In 1964 when the UNCTAD met for the first time it was suggested that “competent
international bodies ... should explore possibilities for adaptation of legislation concerning the
transfer of industrial technology to developing countries, including the possibility of
concluding appropriate international agreements in this field.”23 However the failure of the
bodies in this regard is quite evident today.
Thought this failure is not just the result of the inefficiency of the bodies to create principles
which are efficient and mandated but also due to factors such as most of the new technology
is privately owned and not by the government and thus it becomes difficult for easier
dissemination of such technology. The second road block are the recently popularized IP
rights. A Japanese company refused to transfer its technology to a chemical company in
Korea as it feared loss of market in Korea.24
It’s a vicious circle as new technology innovation can only be encouraged when there are
strong IP rights but at the same time such new technology cannot be used to aid the world
economy as a whole and is only relevant for economic purpose to the innovator and wealthy
and developed nations who can afford to buy such technology.

21
Principle 9 of United Nations Conference on the Human Environment of 1972
22
Oliver Smith,Mapped: The world's most polluted countries, available at
https://www.telegraph.co.uk/travel/maps-and-graphics/most-polluted-countries/, last accessed 1st November
2018.
23
Proceedings of the United Nations Conference on Trade and Development, A.IV.26 Annexes 57, U.N. Doc.
E/CONFA6/141, vol.I.
24
Linsu Kim , “Technology Transfer and Intellectual Property Rights: The Korean Experience” ICTSDand
UNCTAD (2003).
The third road block in the way of successful transfer of technology from developed to
developing nations comes in the form of developed countries itself. As seen in the
negotiations of the UNCTAD code of conduct were the developed countries wanted that the
code should not be mandated in nature but only a set of guidelines.This is mainly due to the
fact that the developed countries will lose the upper hand if new technology is transferred
simultaneously to the developing countries. As most of the international organizations get a
major chunk of their funding from these developed countries it is evident why they are
reluctant to make principles which will be detrimental to these countries.

4.2: Stance of Developing Countries

Earlier the developing nations were of the view that for them to achieve development trade
should be completely liberalized and measure such as “the lowering of tariff and non-tariff
barriers and the reduction or elimination of subsidies; adherence to WTO rules on intellectual
property rights, customs procedures, sanitary standards, treatment of foreign investors, and
various tax reforms, labour market reforms, and policy reforms designed to provide social
support for displaced workers and technological support for displaced business” 25 should be
strictly implemented.

Though there is no proof that open markets will actually help developing nations. 26 Moreover
adherence to Intellectual Property Rights does not make sense as a demand as it does not play
any role in effective transfer of technology but instead acts as an hindrance to it.27

The other problem remains that the developing nations do not have proper infrastructure or
human resources to use the technology even if it the knowledge is transferred to them. Thus
conventions which mandate transfer of technology alone is not enough as the countries will
not be able to use it efficiently.

Conclusion

25
Agosin, Manuel R.,Diana Tussie“Trade and growth: New Dilemmas in Trade Policy – An Over view”(1993) at
pp.24.
26
Eswar,Ayhan Kose, “ Effects of Financial Globalization on Developing Countries: Some Empirical Evidence”
IMF (2002).
27
Supra 13.
------------------------------------------------------------------------------------------------
It is not very realistic to say that the international bodies should come up with an instrument
which mandates effective transfer of new technology as this provision itself will act as a
hindrance to innovation of new technology as it will kill the huge economic interest of the
innovator. Also as these bodies are dependent on the developed nations for their funding it is
highly unlikely that any such instrument could be created in the future which goes against the
wishes of these countries.

International bodies such as IMF should invest in these developing countries with the aim of
encouraging innovations from these countries so as transfer of technology is not needed at all
as these countries themselves become the technology creators. This will also be faced by the
problem that even if the investment would be done the creation of human capital and
infrastructure creation with which they will be able to innovate the technology will take
years. The role of these bodies should thus not end only at investment but technological
assistance must also be given.

Such technological assistance should be overseen by a UNCTAD and also a committee

should be created which will monitor the proper use of the investment. Many developed
countries will have an issue if any such succesful measure is taken by these organization to
help achieve global development as it will lead to them losing their special status and powers
as it becomes common to all the countries. As was the case of Nuclear Non-Proliferation
Treaty as the developed countries acquired the nuclear knowledge they wanted it to only be
with them and not to be shared with other developing countries.

The attitude of the developed countries itself is the biggest roadblock when it comes to
transfer of technology and global development. What is needed most is the attitude change of
these countries which can only be brought by talks and conferences and how global
development will benefit the world as a whole.

BIBLIOGRAPHY
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