Part 5
Regulation of biotechnology in the organization of Mercosur

Chapter 1
Legal and institutional aspects of the organization of Mercosur

The legal rights linked to the organization of Mercosur have73 special features that clearly differentiate it from other international experiences in community law. The internationalization of economic laws on industrial property or intellectual property rights places a high importance on the design of national legislation on the subject, limiting the scope for national action. In the Uruguay Round of the GATT negotiations, agreements began to indicate their linkage or non-linkage to the GATT – which meant that advantages in the area of customs duties on trade were lost.

The United States, starting with the Uruguay Round, began to emphasize regional preferential agreements and sign free trade agreements first with Canada, then the trilateral agreement between Canada, the United States and Mexico, and is currently driving the creation of Free Trade Area of the Americas (FTAA). This context of increasingly international economic law, intellectual property rights and overlapping integration projects forms the background for negotiation of intellectual property in Mercosur.

Through the political will of countries, an institutional and legal structure was organized which would allow immediately incorporating agreements established in Mercosur into national legislation. The 1991 Treaty of Asunción created a limited institutional structure for Mercosur, consisting of the policy-making Common Market Council (CMC) [Consejo del Mercado Común], made up of the Ministers of Economy and Foreign Affairs, and the Common Market Group (GMC) [Grupo Mercado Común], which is the executive body responsible for implementing policy, made up of the Secretaries of State for Economic Affairs and Foreign Relations. The Treaty did not specify the legal weight of these bodies’ decisions.

In December 1994, the Ouro Preto Protocol was adopted, which extended the institutional consolidation, adding a Mercosur Trade Commission (CCM) [Comisión de Comercio del Mercosur]. A trio of bodies was established, respectively called the Political Body, the Executive Body and Segment Commercial Body. Under the Protocol, these bodies have the power to formulate regulations which are binding on the participating states, i.e., Common Market Council Decisions, Common Market Group Resolutions and Mercosur Trade Commission Directives are linked to the States, which should incorporate them into their laws, to be enforced by the inhabitants of these countries.

In practice, however, there is a major crisis in terms of incorporating regulations approved at the Mercosur level into the internal legal and regulatory systems of the four Mercosur member countries (Brazil, Argentina, Uruguay and Paraguay), due to policy fluctuations on the part of the four participating countries and business and economic difficulties affecting development of the integration process. The incorporation of Mercosur regulations into domestic regulations was for some time neglected, but in 1995, it was given a new impetus.

It is possible to distinguish between two types of CMC Decisions, GMC Resolutions and CCM Directives: those which need to be incorporated at the legislative level, and those that which can be incorporated at the administrative level. There is a list of what still remains be incorporated, and countries have highlighted the remaining areas of difficulty. Among the resolutions adopted, a decision was included to “make a request, through the CMC, to the Joint Parliamentary Commission (CPC) [Comisión Parlamentaria Conjunta] of Mercosur, for it to arbitrate the means by which the legislature of each member state should prioritize draft laws of Mercosur-approved regulations which are before their legislatures, and which need to be incorporated via legislation.”

This is the case for the protocols on intellectual property, which need to be incorporated by legislative means. Other agreements can be incorporated by administrative means, although this does not eliminate the problems. Some countries have expressed difficulty in identifying the administrative division which has specific competence. The legal-institutional structure of Mercosur is so particular that there is no direct incorporation of the measures approved by the four member states into their respective national laws. This often hinders the effectiveness of agreements approved by the negotiators.

Intellectual property rights are often implemented through protocols approved by the CMC. This decision gives the protocol a “Mercosur status,” incorporating it into the regulations of the Mercosur bloc and introducing it into the system of dispute settlement. That is, these implementations are approved by decision of the CMC, so that they can be incorporated into the regulations of the Mercosur bloc countries and be subject to claims arising from the system of dispute settlement. The protocols are legal instruments that can not be promulgated separately – this is a condition for belonging to Mercosur.

The agreements, in turn, are not an integral part of the Treaty of Asunción. Some countries tend not to approve protocols that are part of the Treaty of Asunción, giving this type of instrument the character of an agreement, in order to promulgate it independently. This would be acceptable for a free trade zone; however, if the intention is to reach a common market, protocols which harmonize substantial economic legislation, governing the rights of individuals regarding protection of intellectual property rights, should be community-wide; that is, they constitute a legal and regulatory system in which each country must participate. To date, all protocols are subject to claims within the dispute settlement system of Mercosur and form an integral part of the Treaty of Asunción.

Chapter 2
Regulation of intellectual property

Introduction

The scope of legislation related to intellectual property rights, despite the major importance it has for the development of businesses and inventors, is being developed slowly. The main area in Mercosur with responsibility for negotiation on Intellectual Property is Work Subgroup [Subgrupo de Trabajo] No. 7 (SGT-7): “Industry,” although some issues, such as Cooperation in Breeder’s Rights, have already been discussed within the framework of Work Subgroup No. 8 (SGT-8): “Agriculture.”

Protocol on Harmonization of Regulations on Intellectual Property74

The Protocol on Harmonization of Intellectual Property in Mercosur on Matters of Trademarks and Indications of Provenance and Appellations of Origin was approved by Decision of the Mercosur Common Market Council (CMC) on the basis of Recommendation No. 7/94, from Work Subgroup No. 7 (SGT-7): “Industry”. Its goal is to promote adequate and effective protection of intellectual property rights relating to trademarks, indications of provenance and appellation of origin. In this sense, it establishes rules and principles for the implementation of these rights.

The Protocol aims to reduce the various interpretations and impediments to trade and movement of goods and services in the territory of the Treaty of Asunción member states, based on promoting adequate and effective protection of intellectual property rights, and establishing rules and principles that will help guide administrative, legislative and judicial actions, in each of the four member states.

The rules and principles are in conformance with regulations established in international multilateral instruments, in particular the Paris Convention for the Protection of Industrial Property (Stockholm Act of 1967) and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) dated April 15, 1994, annexed to the agreement establishing the World Trade Organization, at the Uruguay Round of the GATT negotiations.

States should ensure effective protection of intellectual property, relating to trademarks, indications of provenance and appellations of origin, ensuring the protection derived from the principles and standards set forth in this Protocol. They may provide a broader protection, provided it is not incompatible with the rules and principles of the international treaties mentioned above. States should grant to nationals of other countries treatment no less favorable than that granted to their own citizens in the protection and exercise of intellectual property rights relating to trademarks, indications of provenance and appellations of origin.

Finally, Article 24 provides that member states should undertake to make efforts to conclude, without delay, additional agreements on patents, utility models, industrial designs, copyrights, and other matters relating to intellectual property.

Cooperation and facilitation in protection of new varieties of plants75

This agreement arose from the determination that the laws of the four Mercosur countries should adapt to the 1978 Act of the International Union for the Protection of New Varieties of Plants (UPOV 78). Also considered was Decision No. 8/95 of Mercosur’s Common Market Council (CMC), which approved the Protocol on Harmonization of Intellectual Property in Mercosur on Matters of Trademarks and Indications of Provenance and Appellations of Origin, establishing in Article 21 that “member states shall provide protection to plant varieties and other plant-breeding activities by a patent system, a sui generis system, or any combination thereof.”

This CMC Decision includes consideration of national treatment, under which nationals of a member country, either individuals or legal entities, that are domiciled in the territory shall enjoy, in respect of recognition and protection of the breeder’s rights, in each of the other member states of the treaty, any legal treatment which the laws of the other member state grant or may later grant for its citizens, provided they meet the conditions and formalities imposed upon nationals of the member state mentioned.

An application for granting breeder’s rights can only be directed to a variety which has the same denomination in all member states. Each member state shall record the denomination proposed, unless it is inadequate under Article 13 of UPOV 78, or is inadequate in the territory of that member state. In this case, it shall require the breeder to propose another denomination.

States shall arbitrate the means necessary to obtain an appropriate harmonization of the methods and technical criteria used to verify compliance regarding differentiation, homogeneity and stability of plant varieties. They shall also arbitrate the means to obtain adequate harmonization of requirements and administrative procedures of requests for protection of plant varieties.

Member states of the Mercosur bloc, through their respective enforcement authorities for the protection of plant varieties, shall arbitrate the means for them to be able to manage, promote or support the incorporation of new genera or species into the breeder’s rights system of another member state. The member states of Mercosur shall publish a catalog of plant varieties, indicating the materials registered in the records of each member state.

Protocol on Harmonization of Regulations
on Industrial Models and Designs76

The purpose of the Protocol for Harmonization of Regulations on Industrial Models and Designs in Mercosur, approved by Decision of the Mercosur Common Market Council (CMC), is to establish rules and principles that serve to implement Intellectual Property Rights in Matters of Industrial Design. It recognizes the need to establish rules and principles to guide the administrative, legislative and judiciary actions of each member state in recognizing and enforcing intellectual property rights in the area of industrial design.

Mercosur member states undertake to observe the rules and principles of the Paris Convention for the Protection of Industrial Property (Stockholm, 1967) and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) (1994). The Protocol includes provisions on national treatment, non-overlapping systems of protection, and rights and requirements of protection. It excludes protection of industrial designs determined essentially by technical, functional or artistic considerations, or those that do not serve as a model to be manufactured industrially. Member states ensure effective protection, according to the principles and provisions of the Protocol. Nevertheless, they may provide a broader protection, provided it is not incompatible with the rules and principles of the treaties mentioned above.

Registration shall last at least 10 years from the date of application. Member states undertake to provide, in their legislation, a renewal of at least 5 years. The owner of a protected industrial design shall have the right to prevent third parties from manufacturing, selling or importing articles bearing or embodying a design, even copied, or a copy of the protected design, without the owner’s consent, if these acts are done for commercial purposes. Member states undertake to use the International Classification of Locarno, at least as a supplement to their own national classifications.

 

Chapter 3
Regulation of biosafety

Introduction

Work Subgroup No. 8 (SGT-8): “Agriculture”, and to a lesser extent, Work Subgroup No. 6 (SGT-6): “Environment”, have been the main sources of relevant standards. Other standards, to complement the general provisions above, originated in the recommendations of Work Subgroup No. 3 (SGT-3): “Technical Regulations.”

Background on agricultural biotechnology

The first important background event regarding agricultural biotechnology was the Regional Workshop for Harmonization of Biosafety in the Southern Cone: Oversight of Transgenic Plants, [Taller Regional para la Armonización de la Bioseguridad en el Cono Sur: Supervisión de Plantas Transgénicas] held in Buenos Aires, on November 16-20, 1992, organized by the Inter-American Institute for Cooperation on Agriculture (IICA) and the International Service for the Acquisition of Agri-biotech Applications (ISAAA)77.

Later, during the 2nd Latin American Meeting on Plant Biotechnology [Encuentro Latinoamericano de Biotecnología Vegetal], held in Puerto Iguazú, Argentina, on June 4-9, 1995, several technicians from the region agreed on the need to identify proposals for action for the establishment of standards and monitoring mechanisms for national field trials and marketing of transgenic materials, harmonized among the Southern Cone countries

For this reason, the Meeting on Biosafety and Marketing of Genetically Modified Organisms in Mercosur [Reunión sobre Bioseguridad y Comercialización de Organismos Modificados Genéticamente en el Mercosur] was held in Buenos Aires on September 19-20, 1995, organized by Argentina’s Ministry of Agriculture, Livestock and Fisheries (SAGPyA today), with the prognosis of the Cooperative Program for the Agro-Alimentary and Agro-Industrial Technological Development of the Southern Cone (PROCISUR) [Programa Cooperativo para el Desarrollo Tecnológico Agroalimentario y Agroindustrial del Cono Sur]. The objectives were to identify actions to harmonize regulatory and oversight procedures for developing and marketing GMOs in the region. The main recommendations were:

On March 5-7, 1996, the Regional Workshop on Biosafety in Agricultural Biotechnology: Towards the Commercialization of Genetically Modified Plants and Vaccines [Taller Regional sobre Bioseguridad en Biotecnología Agropecuaria: Hacia la Comercialización de Vegetales y Vacunas Genéticamente Modificados] was held in Buenos Aires, organized by Argentina’s SAGPyA and the UK’s Department of Environment, with the participation of PROCISUR, the Argentina Foundation [Fundación Argentina] and the British Embassy in Argentina. One of the objectives of the workshop was to contribute to formulating common criteria among the Southern Cone countries in matters of biosafety in agricultural biotechnology. The main product of the workshop was an agreement on regional cooperation, which aimed to:

Mercosur Framework Agreement on the Environment78

The Mercosur Framework Agreement on the Environment [Acuerdo Marco sobre Medio Ambiente del Mercosur] was approved by Decision of the Mercosur Common Market Council (CMC). Its objective is sustainable development and protection of the environment, through the coordination of the economic, social and environmental dimensions, to contribute to a better quality of the environment and people’s lives. This agreement shall remain in force indefinitely and shall enter into force 30 days after the deposit of the instrument of ratification by the fourth of the four Mercosur member states.

Its considerations refer to the importance of environmental issues within the agenda of consolidating and enhancing Mercosur, emphasizing that it is essential to enable sustainable development through cooperation among member states and declaring the need for a legal framework to regulate the actions of protecting the environment and conserving natural resources in Mercosur.

The member states reaffirm their commitment to the principles enunciated in the Rio Declaration on Environment adopted at the United Nations Conference on Environment and Development in Rio de Janeiro in 1992. In their efforts to obtain the tools to help apply these principles, member states should be guided by:

  1. Promoting the protection of the environment and the efficient use of available resources through the coordination of sectoral policies, based on the principles of gradualism, flexibility and balance.
  2. Incorporating the environmental component into sectoral policies and including environmental considerations in decision-making adopted in Mercosur in order to strengthen integration.
  3. Promoting sustainable development through mutually supportive environmental and economic sectors, while avoiding the adoption of measures which arbitrarily or unjustifiably restrict or distort the free movement of goods and services in Mercosur.
  4. Giving priority and integral treatment to the causes and sources of environmental problems.
  5. Motivating the effective participation of civil society in environmental issues.

States shall extend their analysis of environmental problems in the sub-region, with the participation of national authorities and civil society organizations, and should implement, among others, the following actions:

Regulatory Framework for the Treatment of Animal Genetics79

The Regulatory Framework for the Treatment of Animal Genetics of Cattle, Goats, Sheep, Horses and Swine in Mercosur [Marco regulatorio para el tratamiento de la genética animal de bovinos, caprinos, ovinos, equinos y porcinos en el Mercosur], approved by Resolution of the Mercosur Common Market Group (GMC), was motivated by the convenience of having a regulatory framework that guarantees free trade and movement of animals and materials for animal multiplication of registered breeds or cross-breeds without genealogical registration.

No discriminatory animal genetic restrictions of any kind shall be placed on free trade and movement of animals and materials for animal multiplication of registered breeds or cross-breeds without genealogical registration. Bodies or entities responsible for official registration in each country must report which assays are considered official and implement effective actions to harmonize them in a timely manner. Animals imported from third countries can only enjoy the benefits of free trade after the corresponding genetic assays have been carried out under Mercosur and recognized by official bodies or competent authorities.

Registration of animals raised in Mercosur member countries shall be performed in accordance with regulations applied to the breeders in the country where registration has been applied for, without further requirements beyond those required of local farmers. There shall be no discrimination between animals of domestic origin and those coming from other Mercosur countries in applying fees established by the entities responsible for registration as payment for services rendered.

Regulatory Framework for Veterinary Products80

The Regulatory Framework for Veterinary Products [Marco Regulatorio para Productos Veterinarios], approved by Resolution of the Mercosur Common Market Group (GMC), was established based on the need to harmonize the requirements for registration of veterinary products and establishments that manufacture and/or commercialize them in Mercosur member states. It also has the objective of promoting scientific advancement in animal health, developing the veterinary products industry in accordance with technological advances, and facilitating movement of veterinary products which meet standards of quality, efficacy and safety.

All veterinary products must be registered following the rules set forth in the regulation. A “veterinary product” is understood to be any chemical, biological, biotechnological or manufactured preparation, whose administration is done individually or collectively, directly or mixed with food, in order to prevent, diagnose or treat animal diseases.

Considering its importance for the diagnosis, prevention, treatment and eradication of animal diseases in food production, and considering their impact on health, the products must meet the highest standards of quality, raw materials, production processes and finished products, using internationally recognized organizations as a benchmark, such as the USDA Code of Federal Regulations, the US Pharmacopeia (USP), the Directives of the European Economic Community, the British Pharmacopoeia (BP), the European Pharmacopoeia (Ph.Eur.), and the standards of the WHO and the World Organization for Animal Health (OIE) [Office International des Épizooties].

Every establishment which manufactures, manipulates, distills, markets, imports or exports products directly to veterinarians and/or to third parties must be registered with the competent body in their respective country. Facilities and professional responsibility are regulated.

Applications for registration of veterinary products must be accompanied by a description of requirements, which shall the same for the four Mercosur member countries. Certificates of registration granted to veterinary products produced in the member states shall have a validity of 10 years. For marketing of any product which has harmonized standards originally approved in a member country, it will be necessary to obtain co-validation in any of the three remaining countries, from the relevant official body.

The application for registration of pharmaceutical products must include consolidated scientific information on the pharmacokinetic and pharmacodynamic aspects of the drug(s), as well as other information recorded on its metabolism and derived metabolites. When there is no scientifically recognized consolidated information, the competent authority shall establish the necessary assays and controls, in accordance with scientific-technological conditions recommended by recognized international organizations.

Biological products must undergo assays which meet the following requirements: controls for sterility, purity, safety, effectiveness and determination of potency and any other assays deemed necessary, supplemented by chemical, physical-chemical and biological tests which ensure compliance with the standards required by the regulations for all product types and characteristics.

The competent authority shall authorize the importation, use and/or manipulation of products for research and experimental tests, for known purposes and approved experimental designs, restricted to a single time, place and mode of use.

At a later date, supplementary regulations of the regulatory framework of veterinary products were approved, by Mercosur Common Market Group (GMC) Resolution No. 39/96, on the basis of Recommendation No. 16/96 from Work Subgroup No. 3 (SGT-3): “Technical Regulations.” These include a detailed set of specific technical rules and recommendations on requirements to be met in order to enable the various aspects presented by veterinary products.

Rules for Proper Manufacturing Practices and Quality Inspection of Medicines81

Rules for Proper Practices for Manufacturing and Quality Inspection of Medicines [Reglas sobre Practicas Adecuadas para la Fabricación y la Inspección de la Calidad de los Medicamentos] were approved by Resolution No. 04/92 of the Mercosur Common Market Group (GMC), based on Recommendation No. 5 from Work Subgroup No. 3 (SGT-3): “Technical Regulations.” Its approval considers that harmonized regulations on medicinal products must ensure adequate levels of quality in order to ensure the preservation of public health of member states and fair trade.

By means of this resolution, the GMC incorporated Resolution No. 2,865 of the World Health Organization into the regulations of Mercosur, and established that it must be assimilated by the specific legislation of each member state, as a minimum requirement for the manufacture and quality control of drugs and their active ingredients.

At a later date, Resolution No. 59/92 of the GMC approved the Guide for Inspections of Pharmaceutical Industry Establishments [Guía para Inspecciones de Establecimientos de la Industria Farmacéutica], an instrument to perform the duties of health surveillance, which is the responsibility of the authorities of Mercosur member states. Finally, Resolution No. 14/96 of the GMC established regulations on Verification of Compliance with Good Manufacturing and Control Practices in Pharmaceutical Industry Establishments [Verificación del cumplimiento de las buenas prácticas de fabricación y control en establecimientos de la industria farmacéutica], considering that the inspection of pharmaceutical establishments is one of the main instruments of regulation and control. This regulation is based on a regional harmonization effort conducted within the framework of the Health Products Commission of Mercosur’s Work Subgroup No. 3 (SGT-3): “Technical Regulations.”

The document will be updated at such time as the member states agree to adopt new regulations on Good Manufacturing and Control Practices recommended by the WHO, resulting from scientific and technological development in the sector.

Chapter 4
Common regulations on biosafety and intellectual property

Mercosur terminology standards for seeds82

These standards aim to facilitate seed trade among Mercosur member states. They apply to the entire scope of Mercosur, for the stages of procurement, production, certification and marketing of seeds. The policy and regulatory entities from the agricultural area of the four countries are responsible for their implementation. The following international and domestic regulations of countries in the Mercosur bloc serve as technical references:

Definitions of the most well-known terms are provided below:

Chapter 5
Internalization of regulations

The coexistence of four national legal systems is complex, since it is premised on maintaining the autonomy of each country. Each system thus adopts, within its own jurisdiction, particular ways to create and extinguish laws, which are not interchangeable. In recognition of this diversity, the regime adopted in the Ouro Preto Protocol decided to establish a system of uniform procedures to provide predictability and harmony on issues relating to the validity of regulations in the four Mercosur countries.

The system adopted to incorporate common regulations into national laws and to determine the term of their validity in the four countries, agreed to in Ouro Preto Protocol, reaffirms the legal and political decision of states to maintain their autonomy. The decision reflects the constitutional “asymmetry” which exists in Mercosur.

The constitutional constraints in Brazil and Uruguay on automatic inclusion of collective regulations create a situation where the reciprocity and equality required by Argentina’s Constitution do not exist. In Brazil, treaties, once incorporated into national legal system, are then considered to be laws, including the principles governing their repeal. This fact shows the impossibility of imposing supranational features on Mercosur regulations.

The system implemented based on the Ouro Preto Protocol has shown deficiencies that are reflected in increasing delays regarding internalizing the mandatory regulations derived from the Treaty. Within Mercosur, there are numerous difficulties in making integration rules come into effect simultaneously, as a result of the delays found in the various national legal systems. In view of this situation, complaints were discussed before the Common Market Group (GMC), regarding failure to incorporate various regulations. As consensus was not obtained for formulating a resolution of these claims, the Group concluded its activities without reaching any solution.

The GMC dictated two resolutions aimed at the problem. Resolution No. 22/98, made a request “to give priority to draft laws moving through the parliamentary process which involve regulations approved by Mercosur to date and which require incorporation by legislative means.”

Resolution No. 23/98, established, in non-binding fashion, that all draft regulations “which are pending approval by agencies with decision-making powers which require incorporation by administrative means must specify the period in which the regulation is to be incorporated into the legal systems of the member states, counted from the date on which said regulation has been approved.” The resolutions do address certain concerns; however, they do not progress towards solving the problem, which consists of political hesitation to comply with the legal commitments entered into.

Decision No. 23/00 of the Common Market Council (CMC), adopted in March 2000, on the relaunching of Mercosur, highlights the need for Mercosur to have an efficient and updated segment on the process of incorporating its regulations into the legal systems of member states. For this purpose, it provides that states shall notify the Administrative Secretariat of Mercosur (SAM) [Secretaría Administrativa del Mercosur] on the incorporation of Mercosur regulations into their national legal systems. After a regulation has been incorporated by all states, SAM shall notify the others of this fact.

SAM shall prepare a Incorporation Status Report on Protocols, Decisions, Resolutions and Directives [Cuadro de Incorporación de Protocolos, Decisiones, Resoluciones y Directivas], which shall be updated monthly and distributed to member states. The GMC shall include, as a priority issue on the agenda of its regular meetings, an analysis of the Incorporation Status Report. Delegations must report the status of processing the incorporation of provisions have which not yet been incorporated into their legal systems.

In the area of intellectual property rights, the Protocol on Harmonization of Intellectual Property in Mercosur on Matters of Trademarks and Indications of Provenance and Appellations of Origin is not yet in force. Only Brazil and Paraguay have promulgated the respective national laws incorporating this regulation into their domestic legal systems. In Argentina, the representatives have argued that the adoption of the Protocol requires modifications to the National Law of Trademarks, which is why it is still under study.