From reading the Commission's communications relating to the Millennium Round, it is

Questions put to Commissioner Pascal Lamy during an Internet chat on the preparation to Seattle talks and in reference to trade liberalisation and the Millennium Round. (22^nd November 1999)

en français

From reading the Commission's communications relating to the Millennium Round, it is constant that, from the point of view of the EU, the multilateral system of exchanges must be better organised and more liberalised to meet the growing globalisation of economic activity.

This objective, which develops the concept of an international single market, is shared only partially by the major players in this market in the sense that multinational enterprises adhere wholeheartedly to this concept when it serves their interests (Fusion, acquisitions, creation of monopolies etc.…) yet are opposed to it when the free trade to which it leads disturbs their national distribution networks and undermines the very protectionism which they intend, anachronistically, to preserve for their respective products.

Within the EU and the EEA, the various authorities do not seem to share a unanimous point of view on this question, and the legislations of the individual States do not deal with it in the same way.

This creates a deep dysfunction in which particular interests run up against the general interest, in particular the stimulation of competition for the well-being of the consumers.

Intellectual property, technical obstacles to trade, and health and environment are the three major issues which hamper the objective of free international trade.

Although common to many sectors of industry, AUDACE (Association of Users and Distributors of AgroChemicals in Europe) presents these three issues insofar as they interfere specifically in the plant protection sector, albeit understood that veterinary products and pharmaceuticals, in every way similar, are also specifically concerned, as are all products requiring an approval before any marketing.

INTELLECTUAL PROPERTY

Patent law and trade mark rights inhibit the free movement of goods in that they are not recognised solely with the aim of prohibiting and penalising counterfeiting but also with the aim of prohibiting and penalising the parallel imports of authentic products.

The ECJ with the judgement " Silhouette International " (C-355/96) has just confirmed the absence of international exhaustion of intellectual property rights to the advantage of the manufacturers who, by transferring production sites to third countries, by shedding large numbers of jobs in Europe, and by discriminatory practices relating to entente with a view to limiting importation, make it difficult not to say impossible to attain the fundamental objectives required by the EU.

However, since the Silhouette case, the European Parliament wonders about EU isolation resulting from the recognition of the exhaustion of trade mark and patent rights only within the European single market.

However, within the EEA, some member States persist in the judicial recognition of international exhaustion, and Switzerland has just confirmed its legislation that patent and trade mark rights should not protect the manufacturer beyond its first sale (first sale doctrine) whatever the market in which the first sale occurs anywhere in the world.

However, the Commission also specified that :

The Millennium Round should also develop rules to ensure that competition law is applied by all countries in a transparent manner with the result that big companies will find It harder to develop discriminatory trade distorting practices, such as import cartels, which can seriously restrict market access.

We are all consumers. The prices we pay for our food and clothing, necessities or luxuries, are affected by trade policies. Protectionism is expensive: it raises prices. The result of free trade is reduced costs of production (because imports used in production are cheaper), reduced prices of finished goods and services and, ultimately, a lower cost of living.

Consequently, it is appropriate that the Millennium Round tackles the following question:

Should not the exhaustion of trade-mark and patent rights as recognised by the EU after the
first marketing by the holder of these rights or with its consent in the European Union be
extended to the first sale by the manufacturer on the territory of the 134 member States of
WTO so that the exercise of the aforesaid rights does not contravene the liberalisation and the development of world trade ?

TECHNICAL OBSTACLES TO TRADE

The judgement of the ECJ, C-100/96, is a particularly explicit example in this matter.

The conclusions of the Advocate General Philippe Léger delivered on October 2, 1997 highlight:

(article 77) The treaty, in particular Article110 and the first paragraph of article 234 thereof, and the GATT Agreements preclude any unjustified barrier to international trade.

(article 79) Without harmonisation of those procedures by international agreements, it is for each Member State to define the relevant rules and to ensure that it does not adopt measures which unjustifiably restrict world trade. I believe that those requirements would be complied with if the State of importation treated products imported from third countries in the same way as it treats Community products.

In its judgement of March 11, the ECJ sets aside for the member States this possibility of checking whether a product coming from a third country is in conformity with the Community technical provisions, since the procedures intended to obtain the authorisation of marketing of the product are defined by directives which relate only to the European single market.

However, the Commission noting that companies are confronted with many obstacles such as the technical regulations, standards and procedures of evaluation of conformity, wishes :

to limit the technical regulations to essential objectives while encouraging the manufacturers to use international standards to satisfy regulatory objectives.
to reinforce the statute of international standards and to clarify their essential criteria
to fight against unjustified precautionary measures
to further harmonise the procedures of evaluation of conformity at the international level.

Consequently it is also advisable to tackle the following question :

When no specificity relating to the criteria of evaluation of the conformity of a product distinguishes the member States of the EU from other Member States of the WTO, in that, in particular, technical standards and regulations could indeed be harmonised between themselves, shouldn't the recognition of conformity relating to a product manufactured by the same manufacturer be compelling to all countries under the sole provision of an identity check by each of their competent authorities, and without allowing any one of them to take unjustified precautionary measures ?

HEALTH AND ENVIRONMENT

This issue is obviously related to the previous one, insofar as its abuse by manufacturers allows them artificially to differentiate the same product through a pseudo requirement relating to health and the environment.

If members of WTO can resort to restrictive commercial measures to ensure the level of protection of consumer health which they supremely intend to set, the Commission insists that these measures be founded on international standards or valid scientific opinions.

Consequently the third question arises: that of knowing whether a product manufactured by the same manufacturer, and of which different composition between the consumer countries does not rest on any scientific motivation pertaining to a local specificity of use, is able to move freely between the members of WTO who have acknowledge its harmlessness in respect to human health and to the environment as regard to its essential principles. ?

* *

These three questions seem to us to be in total accord with the aims and objectives of the EU at the time of preparing for the meeting in Seattle and we warmly thank the Commission for the interest it will take in these issues.

Daniel ROQUES President of AUDACE

Stéphane DELAUTRE-DROUILLON International Relations AUDACE

http://www.audace-ass.com

Contact de presse AUDACE

Daniel Roques +33 (254) 96 88 13 fac-similé 88 41 84 (français)

Stéphane Delautre-Drouillon +32(69) 89.14.18 sdd@audace-ass.com (English)

AUDACE is an association of users and distributors of agrochemicals created in application of the law of 1 July 1901 (France).

Established in 1998, AUDACE's members use or sell plant protection products in complete agreement with Community law hence contributing to the economic performance of European agriculture.