report on the implementation of article 66.2
of the trips agreement
Switzerland
Addendum
The
following communication, dated 10 October 2014, from the delegation of Switzerland is
being circulated pursuant to paragraph 1 of the Decision on the Implementation
of Article 66.2 of the TRIPS Agreement (IP/C/28).
_______________
1 Introduction
1.1.
In paragraph 11.2
of the Decision on Implementation-Related Issues and Concerns (WT/MIN(01)/17),
adopted in Doha on 14 November 2001, developed country Members reaffirmed their
commitment to provide enterprises and institutions incentives to promote and
encourage technology transfer to least-developed country Members
("LDCs"), pursuant to Article 66.2 of the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS Agreement). In its Decision
(IP/C/28) of 19 February 2003, the Council for Trade-Related Aspects of
Intellectual Property Rights (Council for TRIPS) agreed that developed country
Members shall submit annually reports on actions taken or planned in pursuance
of their commitments under Article 66.2 of the TRIPS Agreement. Furthermore, it
was agreed that new detailed reports shall be delivered every third year and
that updates shall be provided in the intervening years.
1.2.
According to this
obligation, and taking the Decision of the Council for TRIPS into account, Switzerland
herewith submits its second update to the 2012 report (IP/C/W/580/Add.4 of 24 October
2012; the first update of the latter report was IP/C/W/594/Add.5 of 7 October
2013). The report reflects all latest relevant developments in Switzerland.
1.3.
In 2012,
Switzerland reviewed the content and format of its reports from previous years,
taking into account the comments made by LDCs at the WTO workshops on
Article 66.2 of the TRIPS Agreement held prior to the third TRIPS Council
meeting in Geneva every year, as well as the discussions on the reports' format
and content held at the meetings of the TRIPS Council. Some of the input
provided by the LDC group in terms of a standardized reporting format (cf.
IP/C/W/561 of 6 October 2011) has since been taken into consideration for the
drafting of Annex I, to the extent possible. The table in Annex I includes the
following columns: Title of Project or Programme, Country (which additionally
refers to several global programmes), Field of Technology Transfer, Duration,
Mechanism (Agencies/Institution providing Technology Transfer), Disbursements/Budget
for 2013 or a longer period as indicated, and Contact Information. For some
programmes, a website indicates where interested parties can obtain additional
information and find a contact point.
1.4.
Switzerland's understanding of "technology transfer" includes a broad
set of processes covering the flows of know-how, experience and equipment
amongst different stakeholders such as governments, private sector entities,
financial institutions, NGOs and research/education institutions. Incentives
and activities reported here belong to any of the following four key modes of
technology transfer, as per a UN definition: (i) physical objects or equipment;
(ii) skills and human aspects of technology management and learning; (iii)
designs and blueprints which constitute the document-embodied knowledge on
information and technology; and (iv) production arrangement linkages within which
technology is operated, including the enabling environment for such transfer.
Foreign direct investment, official development assistance (ODA; cf. para. 8
below), equity investment, or other instruments such as commercial lending, are
all important channels through which technology transfer is financed. The
present report is focused on technology transfer under ODA financing. Switzerland
provides incentives in numerous sectors contributing to sustainable development
in LDCs and believes that this assistance should be comprehensive and not be
limited to certain areas.
2 GOVERNMENT AGENCIES INVOLVED IN THE PROVISION OF INCENTIVES FOR TECHNOLOGY
TRANSFER
2.1.
There are mainly
two Swiss government agencies involved in the provision of incentives, either
directly or indirectly, for Swiss, as well as for other developed country
Members' enterprises and institutions, to engage in activities involving
technology transfer to LDCs. These two agencies are the Swiss Agency for
Development and Cooperation (SDC) and the State Secretariat for Economic
Affairs (SECO). They are jointly responsible for the formulation and implementation
of the Swiss international development cooperation policy. While the SDC
assumes the overall coordination function in matters pertaining to development
cooperation and humanitarian aid, SECO is the competent centre for economic
development and the integration of developing and transition countries into the
world economy.
2.2.
Another agency
involved in technology transfer activities in Switzerland is the Swiss National
Science Foundation (SNSF). Acting on a mandate issued by the Swiss Federal
Government, the SNSF supports research inside and outside universities and
fosters young scientific talent. At an international level, the Swiss National
Science Foundation aims to make a positive contribution through its research
programmes to scientific research in relevant areas of the world and to promote
research cooperation between these areas and Switzerland. At present, the Swiss
National Science Foundation has a larger programme in collaboration with the
SDC focused on research partnerships with developing countries, encompassing
several projects in LDCs (see Annex II).
3 LEVELS OF SWISS ACTIVITIES PROMOTING TECHNOLOGY TRANSFER TO least developed
countries
3.1.
Switzerland's activities and incentives regarding technology transfer aim to
increase the flow of technology to LDCs and developing countries and to build
up capacities which enable beneficiary countries to assess, adopt, manage and apply
technologies. The activities supported by the Swiss Government embrace
projects at the bilateral, regional and multilateral levels.
3.2.
SECO's and SDC's
activities relevant to Article 66.2 of the TRIPS Agreement are carried out
under the Swiss ODA framework. The projects and programmes under Swiss ODA
include bilateral, bilateral-multilateral and multilateral initiatives and are
primarily aimed at a selected group of priority countries in Latin America,
Africa, Central and South East Asia and south-eastern Europe.
Many of the projects contract Swiss as well as other Members' enterprises and
institutions to provide their knowledge and technology in assisting the
development of human capital, infrastructure and private sector enterprises in
LDCs.
3.3.
At the
multilateral level, Switzerland
contributes to a variety of technical assistance trust funds with the World
Bank Group, the regional development banks, and the International Monetary
Fund. These funds are available either to project managers of these banks or to
countries seeking funding for technical assistance and technology transfer.
Besides cooperation with these financial institutions, Switzerland is also
engaged in the development projects of many other international organizations such
as the World Health Organization (WHO), the United Nations Industrial Development
Organization (UNIDO), the United Nations Conference on Trade and
Development (UNCTAD), the World Intellectual Property Organization (WIPO), the
United Nations Development Programme (UNDP), the United Nations Office on Drugs
and Crime (UNODC), the Food and Agriculture Organization (FAO), the International
Labour Organization (ILO), the International Fund for Agricultural Development
(IFAD), the Global Environment Facility (GEF), or the International Organization
of Supreme Audit Institutions (INTOSAI). International research institutions,
such as numerous specialized centres of the Consultative Group on International
Agricultural Research (CGIAR) are also supported by Switzerland.
3.4.
Switzerland supports various bilateral and multilateral projects in order to
promote investment as well as the efficiency, effectiveness and sustainable impacts
of trade. In investment promotion, Switzerland aims at mobilizing
private capital, know-how and technologies (i.e. mobile money applications) to
strengthen the access to finance of enterprises and households as well as financial
intermediation in LDCs, and facilitate direct investments or joint ventures
which transfer know-how and technology. Concerning trade-related cooperation
promotion, Switzerland
cooperates on a bilateral basis and with bilateral or multilateral agencies.
Trade-related assistance to LDCs is mainly delivered through multilateral
programmes and organizations such as the Enhanced Integrated Framework (EIF)
and the UN Interagency Cluster on Trade and Productive Capacities. Herein,
special thematic partnerships are maintained with ITC, UNCTAD, ILO and UNIDO,
as well as with selected NGOs. Switzerland
concluded a high number of bilateral agreements with LDCs, promoting and protecting
investments, as well as double taxation agreements.
4 INSTRUMENTS FOR THE PROMOTION OF TECHNOLOGY TRANSFER
4.1.
One of the main
goals of Switzerland's
economic and trade-related cooperation is the transfer of modern technology and
of know-how to recipient countries in order to better enable them to upgrade
their production facilities to the requirements of world markets and to become
more competitive in the global economy. The promotion of investment and of
cooperation agreements between the private sectors in the North, South and East
is an important instrument of development policy, which is primarily intended
to support sustainable development in these partner countries.
4.1 Support of Private-Sector Investments in Least-developed Countries
4.2.
Switzerland promotes technology transfer to LDCs by way of supporting small and
medium-sized enterprises (SMEs) in several ways. For instance, it provides
technical advice to SMEs domiciled in LDCs such as Bangladesh,
Benin and Mali.
4.3. Switzerland also encourages Swiss SMEs to invest in
LDCs in order to enhance technology transfer to LDCs. The SECO Start-up Fund is
a loan instrument established by the State Secretariat for Economic Affairs
(SECO) in 1997. The administration of the Fund is delegated to FINANCEcontact in Zurich.
The Fund promotes private sector investment projects in countries with
economies under development or in transition, including LDCs. The projects must
be commercially viable and meet recognized environmental and social standards.
Investments in developing and transition economies involve business risks
beyond those generally encountered in Western countries. The aim of the
Start-up Fund is to share financing and risks with the investor. It does so by
co-financing the initial investment phase. Financing by the Start-up Fund is in
the form of a loan that must be repaid within five years. The SECO Start-up
Fund aims at enabling the transfer of capital, technological know-how and
managerial expertise. The Start-up Fund has actively supported SME activities
in LDCs or countries in transition through more than 104 projects, such as
mango processing in Burkina Faso
and coffee processing in Zambia.
4.4.
Technology
transfer to LDCs is also provided by Swiss charitable institutions, which are
incentivized under tax exemption schemes established by the Swiss Government.
The Novartis Foundation for Sustainable Development may serve as just one
example of a Swiss institution, to which the tax incentives apply, that is
engaged in technology transfer to LDCs (http://www.novartisfoundation.org/platform/apps/home_e/index.asp?MenuID=209&ID=479&Menu=3&Item=41).
The Foundation not only supplies a large amount of cost-free medicines to many
LDCs, but it also runs various public health related projects including local
training to promote Integrated Management of Childhood Illness, training and
supportive supervision of health personnel and the provision of training
infrastructure.
4.5.
Switzerland supports private participation in infrastructure in developing
countries through facilities of the Private Infrastructure Development Group
(PIDG). It has provided equity to the Emerging Africa Infrastructure Fund,
which in turn provides long-term US$ or EUR-denominated debt on commercial
terms to finance the construction and development of private infrastructure in
47 countries across Sub-Saharan Africa. It also supports GuarantCo which enhances local currency debt issuance by
private, municipal and parastatal entities for infrastructure projects in lower
income countries around the world. Finally, it supports InfraCo Africa,
which develops projects by taking on the high costs and risks of early stage
project development, and makes infrastructure projects happen in situations
where the private sector would not otherwise be willing or able to invest.
PIDG-supported infrastructure projects are mostly (72%) financed and wholly implemented
by the commercial private sector. Overall, 77 projects have been supported by PIDG so far. Of these 77 projects,
37 are now operational, delivering new or improved services to over 94 million people,
providing long-term employment to 183,000 people and leveraging in over US$ 8.8 billion
of private sector investment. This strong private
sector involvement means that they often utilize cutting-edge technology to
ensure maximum efficiency in the countries in which they operate. Most PIDG-supported
projects employ local managers and operators who are recruited on the basis of
their existing, appropriate qualifications, but all of whom are also provided
with on the job training. The percentage of training costs in relation to a
project's total investment cost varies widely, depending upon the type of
infrastructure being provided, the numbers of staff employed and the type of
technology being used.
It is unusual for the PIDG facilities (i.e. GuarantCo, EAIF
(Emerging Africa Infrastructure Fund), InfraCo) supporting a project to finance the costs of technology-related
training, as these costs are part of the overall investment cost of the
project. However, in some exceptional cases, Technical Assistance (TA) grants
have been accessed to provide technology-related training to PIDG supported
projects. In particular, the Chanyanya project developed and implemented by InfraCo Africa in Zambia has accessed US$ 230,000 of TA
funding to provide training and capacity building to local farmers in the
development, operation and marketing (of produce) of a cooperative designed to
provide large-scale pivot irrigation services to local farms on the outskirts
of Lusaka, Zambia. Previously, these small-scale farmers relied purely on
rainfall for irrigation. These training-related costs comprise approximately 10%
of the total investment costs of the project.
4.6.
Switzerland supports
the Climate Investment Funds' Scaling Up Renewable Energy Programme (SREP) for
low-income countries (currently LDCs listed only: Ethiopia,
Mali, Nepal, and Tanzania), which finances
capacity-building measures and infrastructure projects. The latter also foresee
technology transfers for renewable energy technologies.
4.7.
Moreover, Switzerland
supports numerous initiatives to help improve access to finance and the
business environment for both SMEs and private investments by way of technology
and know-how transfer. Examples include the Doing Business Better
Initiative and a mortgage market development project in Burkina Faso,
the Credit Bureau and Mobile Money Programmes,
and the Africa Leasing Programme. In South-East
Asia, SECO supports the IFC-led (International Finance Corporation) Mekong Private Sector Development Facility (MPDF), which
covers Lao P.D.R. and Cambodia.
In terms of knowledge transfer, the MPDF has supported efforts to set up credit
bureaus both in Lao P.D.R. and Cambodia
and helped to establish mobile phone banking schemes in Cambodia. Other
examples in South-East Asia include helping First Finance, a Cambodian
microfinance company, to develop a marketing strategy for its products,
supporting the Cambodian Battambang Investment Rice Company
to upgrade its environmental and social governance (ESG) scheme, and assisting
the Westline Education Group, a private
education provider in Lao P.D.R., in its efforts to comply with tax and
corporate governance obligations. In Africa, SECO has been supporting Tanzania to set
up a credit bureau. The programme will now be expanded to Sierra Leone, Burundi,
Lesotho, Zambia and the
UEMOA (West African Economic and Monetary Union) sub-region. While the Africa Mobile Money programme supported by SECO (among
others Madagascar
to develop telecom-led payment solutions) finished in 2011, such payment
solutions and knowledge sharing is now being supported at the global level with
the Innovative Retail Payments facility.
Technology and know-how transfer is also taking place in the Africa Investment Climate Programme that supports Benin, Mozambique
and Zambia.
4.8.
Finally, the
Swiss Government through the Swiss Investment Fund for
Emerging Markets (SIFEM AG) also provides long-term financing for
small and medium-sized enterprises in LDCs through private equity fund
investments. These funds provide equity investments for SMEs in the target
countries and combine the investment with a broad range of technical assistance
to the beneficiary companies such as skill development, improvements in
financial and accounting systems, assisting in marketing and distribution, risk
assessment and implementing information technology systems. Examples include
the Aureos East Africa Fund
(CHF 8.4 million), the GroFin East Africa Fund
(CHF 3.6 million), the African Infrastructure
Fund (CHF 12 million), the SEAF Blue Waters Growth
Fund (CHF 8.4 million), and the responsAbility
Investment Fund in combination with a separate TA fund (start-up
money from the Swiss Government of CHF 7 million).
4.2 Commercial Establishment of LDC Companies in Switzerland and
other Developed Countries
4.9.
With its "Swiss Import Promotion Programme" (SIPPO), Switzerland supports exports from companies from
selected developing and transition countries, including LDCs, to Switzerland and
other European countries. It also assists Swiss importers in finding new
products and sources. Besides promoting consumer awareness for such products,
Switzerland provides services such as advice on product design, business
partner search, training in export marketing, and support for participation in
trade fairs to companies domiciled in developing and transition countries,
including LDCs.
4.3 Financial Assistance and Export Risk Guarantees
4.10.
Switzerland also provides non-reimbursable financial assistance (grants) to
LDCs for the construction, rehabilitation or extension of infrastructure in
LDCs. The Swiss grant contribution to these projects also covers transfer of
technology, consulting services for project implementation, as well as
expertise for institutional (managerial) reforms and sector reforms. A special
focus is given to the establishment of public-private partnerships for
infrastructure services.
4.11.
The Swiss Export Risk Insurance (SERV) provides a system of
export risk insurances for goods and services destined for LDCs. Export risk
insurances incentivise and facilitate exports to LDCs and ensure a constant
technology transfer.
4.4 Trade and Clean Technology Cooperation
4.12.
Switzerland focuses on promoting the transfer of environmentally sound
technologies. A comprehensive programme for the establishment of so-called
"Cleaner Production Centres" was set
up. The aim of the centres is to offer private companies and the public sector
in LDCs a wide range of services including general information, in-plant
assessments, workshops, demonstration projects, capacity building and support
for the preparation of bankable projects. The centres provide these services
with the support of Swiss and other developed country Members' technical
institutes, universities and industries. Two four-year programmes for CHF 1
million each have been established in this field with Cambodia and
Lao P.D.R.. The Sustainable Trade Initiative provides producers in developing
countries, including LDCs, with know-how on environmentally and socially
sustainable production methods, thereby assisting these producers to increase
their market share for the main target products, including cotton, cocoa and coffee.
4.13.
Switzerland also supports programmes in the field of energy efficiency, which
aim at mitigating CO2 emissions globally and controlling air
pollution locally. These projects are related to the traffic and transportation
sector and to small and medium-sized industries (e.g. foundry, glass, and brick
industries). The main objective is to strengthen local partners (capacity
building) and to pool international expertise in order to develop locally
adequate solutions (technology packages). These pilot programmes are then
evaluated, documented and disseminated at the national level. In addition, Switzerland
supports transfer of know-how, training and infrastructure in the field of
environment monitoring and chemicals management.
4.14.
Switzerland and the World Bank jointly launched the National
Strategy Study Programme in 1997. The Programme has assisted
non-Annex I countries of the Kyoto Protocol, which includes a substantive
number of LDCs, in defining their negotiating positions and effectively using
the emerging international carbon market incentives for climate change technology
transfer. After a series of over 20 national strategy studies for developing
and transition countries, Switzerland
pooled its funds in 2006 with other donors in the Carbon
Finance Assist Trust Fund managed by
the World Bank Institute. This programme
supports the implementation of the flexible mechanisms under the UNFCCC through
(i) institutional capacity building; (ii) market development; and (iii) outreach.
4.15.
Strategic
partners at the national level are the designated national Authorities. The programme
is also closely cooperating with highly specialized consultants, research
institutions and the private sector. More recently, the programme has joined
forces with the large city grouping C-40 in order to seize CDM (Clean Development Mechanism) opportunities in megacities.
Over 50 per cent of the world's population live in urban areas and are
responsible for 75 per cent of global power consumption and emissions. However,
cities are under-represented as project owners in the CDM so far. The programme
aims at closing this gap.
4.16. With specific trade promotion programmes, Switzerland promotes the integration
of LDCs in the global economy. In the context of the Enhanced Integrated
Framework (EIF), Switzerland
has joined forces with the CEB UN Cluster on Trade
and Productive Capacities to support LDCs' integration into the
world trading system. A first pilot country programme has been launched in Lao
P.D.R., which has been initiated operationally in 2010. A second country
programme in Tanzania
is under preparation. With its contribution to the
Standards and Trade Development Facility (STDF), Switzerland
also assists LDCs to enhance their expertise and capacity to implement international
SPS standards referred to in the WTO Agreement on
the Application of Sanitary and Phytosanitary Measures (SPS Agreement). The Farmforce programme provided
smallholder farmers and farm business organizations with cloud-based technology
and training, allowing them to better access information about international
markets. Data about markets and the international farming business helps small
holder farmers to identify new opportunities to integrate their production into
value chains.
4.5 Training
4.17.
The Swiss
Tropical Institute, now Swiss Tropical and Public
Health Institute, offers a postgraduate diploma course entitled
"Health Care and Management in Tropical Countries". More than half of
the participants in this course regularly come from LDCs. Their participation
is possible thanks to the scholarships offered by the Swiss Government.
4.6 Research Activities
4.18.
Another kind of
technology transfer, which Switzerland
engages in, is collaborating with international organisations and/or with LDCs
directly in research, particularly in the public health and cross-cutting
issues in the agriculture domain. SDC promotes research partnerships in a
number of LDCs, including support through multi-year programme funding such as
the National Centres of Competence in Research
North-South, the research partnerships with developing countries
originated by the Swiss National Science Foundation,
the Swiss Universities of Applied Science,
and the Scientific Cooperation Fund implemented
by the Federal Institute of Technology in Lausanne.
4.7 Other Instruments
4.19.
In addition to
the activities mentioned above, Switzerland
has also engaged in capacity building and technology transfer in favour of
developing and least developed countries, pursuant to the Convention on
Biological Diversity (CBD) and its provisions on access and benefit sharing. Switzerland
also supports the BioTrade Initiative of the United Nations
Conference on Trade and Development, which provides for the
promotion of trade and investments in products and services derived from the
sustainable use of biodiversity.
5 DOMAINS OF SWISS TECHNOLOGY TRANSFER ACTIVITIES
5.1.
Switzerland promotes technology transfer in domains that are of high importance
to the LDCs. Specifically, the Swiss Government fosters technology transfer to
LDCs in the fields of public health, water supply and sanitation, agriculture,
food industry, machine industry, textiles, chemical industry, clean energy and
eco-technology and relevant IP protection. For an overview of ongoing projects,
see Annexes I and II.
5.2.
Switzerland also promotes and incentivizes technology transfer to LDCs in
domains in which it has special expertise. These include the machine industry,
as well as the manufacturing of precision instruments and chemical products.
The promotion of transfer of environmentally sound technologies to LDCs is
another domain in which Switzerland
is active. Here, the goal is to transfer both knowledge and methods that help
meet environmental standards. These programmes focus particularly on technology
transfer in the metal, paper, cement, food and textile industries. Furthermore,
Switzerland
supports the transfer of technologies in the field of renewable energies, for
example through its REPIC platform.
5.3.
The Swiss
Government encourages technology transfer between Switzerland and LDCs in various
ways including research funding, consulting and assistance, particularly in the
domains of public health and sustainable water supply.
5.4.
Finally, Switzerland
offers LDCs assistance in preparing and enforcing laws on the protection of
intellectual property rights. It also supports the LDC domestic offices
executing these tasks. The Swiss Federal Institute of Intellectual Property
offers state-of-the-art searches free of charge for LDCs, and, by doing so,
encourages innovative enterprises and industries in LDCs to use the patent
system, to benefit from the information which can be gathered through this system,
as well as to protect their own inventions, thereby encouraging the building of
technological capacity in LDCs. Switzerland is also actively involved in the
exchange of information regarding the protection and administration of
intellectual property rights with LDCs.
6 Concluding Remarks
6.1.
In conclusion,
Switzerland reaffirms its commitment to actively engage in the provision of
incentives for an enhanced technology transfer to LDCs and is working on
continuously improving its activities and reporting in this regard. The
continued dialogue between developed countries and LDCs will contribute to further
improving developed countries' annual reports, both in terms of format and
content. In parallel, discussions must continue to explore new and alternative
ways of more effectively incentivizing enterprises to transfer suitable
technology and know-how to LDCs, always keeping in mind the wider context and
framework conditions of governmental and private engagements aimed at building
local capacity and fostering sustainable development in LDCs.
6.2. As stated in earlier reports, government incentives to provide
technology transfer to third countries are only one of many factors relevant
for companies' strategic decisions regarding where to direct their foreign
investments and transfer their innovative technology. Overall conditions in
LDCs are often unfavourable to foreign enterprises that, in principle, would
have the capability and the willingness to transfer their technology and
know-how. LDCs thus need to persistently work towards an enabling environment
which attracts foreign investment and technology transfer. Some of the decisive
factors that contribute to attracting technology are favourable overall macroeconomic
and microeconomic conditions, a safe legal and regulatory framework (including
an accountable judicial system, adequate protection of intellectual property
rights and a well-functioning government administration) and market potential
at the national level.
_______________