Mercosur-EU Free Trade Agreement: a bad deal for the public domain

Handel en koopvaardij
Stop the secret erosion of the Public Domain
Licentie

Contrary to what the negotiating parties expected (and what many civil societies organizations feared), the Mercosur-EU Free Trade Agreement (FTA) was not signed during the World Trade Organization (WTO) Ministerial Conference that took place at the beginning of December in Buenos Aires. Thus, the signing of the FTA that has been negotiated for almost twenty years was postponed once again. Over this time the negotiations were frozen during the era of the leftist governments in South America, but regained speed after the arrival of neoliberal governments to Brazil and Argentina.

Like many other multilateral agreements that have been negotiated in recent years (TPP, TTIP, etc.), the Mercosur-EU FTA covers a large number of areas (not all strictly related to trade) ranging from the exchange of goods to capital movements, phytosanitary measures, electronic commerce and intellectual property (IP). The area of ​​negotiation related to IP is extremely broad, including patents, trademarks, geographical indications and copyright, among other topics.

From TRIPS to TRIPS Plus

In most of the issues related to IP, the Mercosur-EU FTA goes beyond the international obligations imposed on the countries in 1994 with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in the context of the creation of the World Trade Organization. TRIPS established a minimum regulatory floor on IP that forced a large number of countries, including those of the Mercosur, to modify their laws, establishing restrictions on the circulation of knowledge and negatively affecting the public domain. In the field of copyright, TRIPS established a minimum copyright term of the author’s life plus 50 years, meaning that countries like Uruguay, which at that time had a term of only 40 years, was a major change. TRIPS also forced the countries to establish criminal penalties for IP infringements conducted on a commercial scale, as well as to protect software using the same regulatory framework as that applied to literary works. While some of these measures were already established in the Berne Convention and other treaties administered by the World Intellectual Property Organization, TRIPS stipulated economic sanctions for countries that did not comply with the obligations, which resulted in rapid adaptation to a new regulatory framework.

Beginning in the 21st century, the WTO entered a phase of stagnation in which developed countries saw their expectations of new rightsholder-centered regulations thwarted. As a result, the trade-related IP agenda migrated from the WTO to bilateral and multilateral FTAs. Through these instruments, generally negotiated between developed countries and underdeveloped countries—with the powerful developed countries clearly at the wheel—new obligations were introduced that increased the levels of IP restrictions above and beyond what had been required by TRIPS. These new obligations are known as “TRIPS plus.” The TRIPS plus measures include, in the field of copyright, an increase in the term of copyright to the author’s life plus 70 years, penalties for the circumvention of technological protection measures, new exclusive rights for broadcasting organizations over the broadcasts, and other measures that place high barriers to free use and enjoyment of the public domain.

The new Mercosur-EU FTA drafts

The Mercosur-EU FTA, like TPP, TTIP and others of its kind, is being negotiated with a level of secrecy unacceptable for democratic discussion. The drafts have been made public sporadically, but not through a transparent negotiation process, nor with accountability to citizens and true participation of civil society. However, according to what is known so far, it can be said that IP measures included in the agreement fit perfectly in the definition of TRIPS plus. Last September, Creative Commons analyzed a November 2016 draft of the IP chapter. This draft included highly worrying measures, such as the extension of copyright terms, the absence of clauses of limitations and exceptions protecting the rights of users, the mandatory remuneration for performers and producers of phonograms, the introduction of legal sanctions to the circumvention of technological protection measures, and the provision of preventive court orders against “imminent infringements”, among other TRIPS plus measures clearly harmful to the public domain and access to knowledge. The 2016 draft essentially reads like an attempt by the European Union to impose the restrictive elements of its own copyright rules on the Mercosur countries.

A few weeks ago, Greenpeace Netherlands leaked a new draft of the Mercosur-EU FTA, apparently from July 2017, which includes the IP chapter. This new draft of the IP chapter shows the huge number of areas where there is a lack of agreement between Mercosur and the European Union. In the section devoted to copyright, the consolidated text (meaning those areas agreed upon by both parties) is only a small fraction. The rest consists of proposals and counterproposals from both parties. It is easy to see that, while the interest of the European Union is to increase the terms and scope of IP protection, as well as to impose new penalties on infringement, Mercosur countries seek to avoid higher IP standards, incorporate mandatory limitations and exceptions to copyright, and favor the identification and protection of the public domain.

This almost total lack of agreement is understandable if we take into account the international balance between payments and receipts for the use of IP. The World Bank data in this regard are eloquent regarding the enormous existing asymmetry, as a result of which the least developed countries have a huge deficit. The hardening of IP, therefore, would bring as a direct effect the increase in payments for the use of licenses from the least developed to the most developed countries.

Taking into account the history of the negotiations of this type of FTA, it is very possible that most of the disagreements revealed in the July draft will end up going in favor of the European Union text. Given that the Mercosur countries have their fundamental interest in the trade of agricultural products, they are forced to sacrifice their interests in other areas. This is what happened, for example, in the FTA signed between the European Union and Ecuador in November 2016. Just before the negotiations started, Ecuador was discussing a new copyright framework, through which it was proposed to lower the term of copyright from 70 to 50 years after the death of the author. However, the FTA with the European Union included the obligation that the term be set at no less than life plus 70 years, which forced the Ecuadorian government to adopt that term. The example of the FTA between Ecuador and the European Union shows a pattern that is repeated in other FTAs between developed and underdeveloped countries. Strong IP measures are usually accepted by less developed countries, since they are usually seen as a price to pay to obtain advantages in others aspects of the trade negotiation process.

It should be remembered that, due to the economic orientation of the leftist governments of Mercosur in the last decade—before the new rise of neoliberalism—none of the Mercosur countries had adopted TRIPS plus through FTAs. For this reason, unlike other countries where TRIPS plus is already in place, any progress in the TRIPS plus direction is a serious loss for the public domain in the Mercosur countries. Thus, for example, Uruguay would be forced to increase the term of its copyright 20 years, while Argentina would be forced to adopt prohibitions against the circumvention of technological protection measures.

Different perspectives but a shared struggle

At this point, it is necessary to note that public domain activists may have different perspectives according to the region in which they work. From the perspective of the European Union public domain advocates this agreement may be seen as an opportunity for the inclusion of public domain provisions in a standard TRIPS plus FTA. From the European perspective, the text proposed by Mercosur on the importance or a robust public domain and the need to collaborate on the identifying subject matter in the public domain (see Article 4.4 of the IP chapter) would result in a substantive improvement of existing EU copyright law (even though as a Mercosur suggestion it is unlikely to prevail). However, from the perspective of Mercosur public domain advocates, any advance in the TRIPS plus direction (even if it were a little more benign than in other FTAs) would represent huge damage.

Perhaps this difference can be saved if we consider this struggle not as a sum of struggles in each country or region, but as a global struggle to support the public domain. As Luis Gil Abinader argues in a very interesting recent article, the fact of incorporating TRIPS plus (either in its hard version or in its most benign version) in countries that do not have it so far, not only damages access to culture in those individual countries, but it also makes all non-TRIPS plus countries lose bargaining power in multilateral trade, isolating them and pressuring them to finally adopt TRIPS plus, either through bilateral or multilateral agreements, or even in the future through the WTO itself. As a result, a new wave of barriers to the public domain would be consolidated at the global level. Therefore, there is also a tactical interest for public domain advocates of all countries in continuing to strongly oppose TRIPS plus; it’s not yet a lost battle, and it should not be seen that way.

Of course, if the Mercosur-EU FTA is signed and enters into force, it is desirable that it be as least harmful as possible for the public domain, even if it extends the terms and scope of knowledge privatization, and set new penalties. If some new mandatory exceptions to copyright are included in the FTA, the public domain activists of the Mercosur and European Union countries will take advantage of them. But it is necessary to keep in mind that it is never a good deal to exchange highly damaging TRIPS plus measures for other less comprehensive clauses which would benefit the public domain only in a minor fashion.