Main Issues in the Metropolitan Case - Essay Example

Main Issues in the Metropoliland case: The major issues confronting Metropoliland could be seen in terms of the following: Nearly 2.5 million of their 10 Million population are affected with HIV + The entire military budget has been diverted for providing infra-structure in terms of hiring foreign scientists, undertaking expensive research for developing vaccines for free distribution to afflicted masses In order to bring their economies back into the rails, the Government has embarked upon aggressive domestic protection strategies aimed at providing subsidies to growers, assuring minimum prices to them and in short, adopting a protectionist policy to domestic producers of agriculture produce, presumably at the detriment to foreign producer members of WTO Textile producers are being encouraged to copy foreign trademarks for entering foreign export markets The Government of Metropoliland continues with its controversial laws by raising taxes for non-alcoholic performance drinks that are not produced, following the country’s traditional method of production, regardless of the country of origin, or the final product’s composition. Implications of Trips in pharmaceutical products: Under the Trips Agreement, patent rights do not carry special privileges, but are subject to certain limiting factors: The exception could be made by members on the condition that this does not clash with normal usage of patents, and do not act detrimentally to the interests of third parties. The Trips agreement with necessary circumspection and discretion does allow for valid use by Third Parties, as compulsory License or government use, without the consent of the patent owner in certain circumstances. Generally speaking, the main criteria could be in terms of voluntary licence on practical marketable specifications and that the compensation paid to the right holder shall be sufficient in such situation, taking into account the fiscal value of the licence held. The Agreement recognizes right of Members to take measures, consistent with its provisions against anti-competitive practices and provides more flexible conditions for the grant of compulsory licences, where a practice has been determined, after due process of law, to be anti-competitive. Trips: Drug Patents, Technical Note: Pharmaceutical patents and the TRIPS Agreement. (2006). Offering protection to domestic industry: According to provisions of World Trade Organisation (WTO) Agreement 1995, member countries should not discriminate between domestic and foreign producers during course of trading. Thus all member countries should be provided equal status to domestic, or foreign trading partners or in other words practice favoured country treatment. (FCT) Metropoliland has sought domestic protection for its indigenous producers, initiated process of bureaucracy and retarded trade promotional efforts by adopting a protectionist policy towards its domestic growers, at the expense of competitive importers. This is against both the letter and spirit of various agreements that govern international trade, affecting potential trade between signatories to such agreements, including State of Metropoliland. If all member countries adopt a similar stance as taken by Metropoliland, world trade would suffer and “such a self-defeating and destructive drift into protectionism” would completely erode the economies of such trading countries. (Understanding the WTO: Basics: The Case for Open Trade). Protectionism lowers competitiveness and free market actions between business partners. In the long run it could spell economic disaster for such practicing countries. Under the circumstances, it is incumbent that Metropoliland prove to the competent Court that the said subsidies and differential tariffs do not in any way, harm the economic interests of other member countries or compromise their business status. However, aggrieved member countries affected by the subsidisation may refer the issue to a Dispute Settlement Committee (DSC) of WTO, which would make an impartial scrutiny and submit its report. In the event the controversial subsidies are found to be unreasonable, or detrimental to business interests of aggrieved parties, Metropoliland would be constrained to withdraw subsidies offered, “or remove the adverse effects.” (Legal Texts: the WTO Agreements: Agreement on Subsidies and Countervailing Measures). Further by granting protection to local produce, Metropoliland has not acted in line with World Trade Organisation directives. According to WTO norms,” Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents.” (Understanding the WTO: Basics: Principles of the Trading System). Allowing textile producers to copy foreign trade marks Under the provisions contained under Section 2, Article 16 of Uruguay Round Agreement, ” The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion.” (Uruguay Round Agreement: Trips: Part II – Standards Concerning the Availability, Scope and use of Intellectual Property Rights: Sections 1 and 2). However, in this case it is seen that Metropoliland has deliberately copied the trademark of foreign products without their express permission. In other words, Metropoliland had taken recourse to illegal means to improve its woeful economic condition and had vitiated the letter and spirit of TRIPS Agreement. Further, under Article 9 of the Paris Convention, it is seen that the goods thus illegally exported under unlawful trade marks could be seized upon entry into such countries of the European Union, where such trade marks could be justifiably protected, or even in countries were illegal duplication of trademarks were affected, or importing country. However goods in transit are not permitted to be confiscated. Where laws do not to permit confiscation of imports, there may be banning of imports, or confiscation inside the country. However, a lot would depend upon the situation of the case. In case, the use of trademarks are justified by the country, or even considering the extent of damage, or compromise to the interests of genuine owner of registered trademark that such action is perforce to incur. However, as seen in the Celine case, the International Court of justice ruled that where identical trade names were used for similar products, then “the simple fact of a double identity - use of the same mark for the same goods - is not in itself sufficient any more to argue an infringement of that mark, but that one also has to look at whether the mark is being used to distinguish the goods from those of other players.” (ECJ Judgment in the Celine Case: Another Frustrating Non-Judgments. 2007). Arbitrary increase of taxes on non-alcoholic health drinks The terms of WTO has made it clear that its fundamental objective is to lower trade barriers and improve trade between member countries. The principles and precepts that govern trading among members of WTO envisages that “foreign companies, investors and governments should be confident that trade barriers (including tariffs and non-tariff barriers) should not be raised arbitrarily.” (Understanding the WTO: Basics: Principles of the trading System). However, Metropoliland has reneged its commitment under the WTO by striving to raise taxes on drinks and thus, increase trade barriers and tariffs. This is against the principles laid down under the World Trade Organisation norms and creates disparity between trading nations, especially when WTO norms are intended to lower tariffs and barriers. It is seen that the GATT Agreement, the Uruguay round of talks and finally the WTO guidelines are efforts taken by world trade community to improve their economies of individual countries through products which they could best produce. Most countries, even developing ones, have strong assets, in terms of cash crops, or agriculture produce. They could make use of their assets to produce items that could be traded with those of other countries. In the case of Metropoliland, their main assets are abundance of sugar and coffee. Thus, this State needs to render maximum output of these produce and export them for items that are needed for people, like rice, wheat and spices. Again it is also necessary for the member country, Metropoliland, to adhere to the provisions contained in Article XXIV relating to Customs Unions and Free trade areas which regulate the decisive factors for increases in tariffs and the procedures to be followed in order to achieve any monetary alterations in the event the country decides to increase tariffs. This country needs to follows the directives as found in the provisions relating to tariffs as found in General Agreements on Tariffs and Trade 1994 (GATT 1994) while making ad-hoc increases in prices of non alcoholic performance drinks. It is also necessary to find out whether the type of non-alcoholic performance drinks whose tariff has been increased arbitrarily by Metropoliland is scheduled in the List of items under the GATT rules. If so, it is a controlled item, and the State needs to follow regulatory norms as enunciated by GATT. It is seen that GATT, Uruguay Round of talks and WTO are complex laws which need to be applied depending upon the merits of specific cases. Conclusions It is necessary to consider that although the health issues confronting this country is colossal and has almost annihilated its economic prospects, it is necessary to stand up to norms and conventions governing Membership in the World Trade Organisation (WTO). 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