RESTRICTED  
  
WT/WGTTT/W/21  
 
23 October 2013  
(13-5868)  Page: 1/4  
Working Group on Trade and Transfer and Technology    
 
DRAFT 
 
REPORT (2013) OF THE WORKING GROUP ON TRADE AND TRANSFER  
OF TECHNOLOGY TO THE GENERAL COUNCIL 
 
 
1  INTRODUCTION 
1.1.  At the Fourth Ministerial Conference in Doha in November 2001, Ministers agreed to "an 
examination, in a Working Group under the auspices of the General Council, of the relationship between trade and transfer of technology, and of any possible recommendations on steps that 
might be taken within the mandate of the WTO to  increase flows of technology to developing 
countries".
1 Paragraph 43 of the Hong Kong Ministerial Declaration of 18 December 2005 
reaffirmed the Ministers' commitment to advance the work of the Working Group and instructed 
the General Council "to report further to our next Session".   
1.2.  Since the November 2011 Report of the Wo rking Group on Trade and Transfer of Technology 
to the Ministers, the Working Group has held six sessions during the period 2012 to 2013. The 
reports of the meetings are contained in documents WT/WGTTT/M/39/Rev.1, WT/WGTTT/M/40, 
WT/WGTTT/M/41, WT/WGTTT/M/42, WT/WGTTT/M/43 and WT/WGTTT/M/44.2 As in the previous 
years, at these meetings, Members continued the analysis of the relationship between trade and transfer of technology, as well as considered any possible recommendations on steps that might 
be taken within the mandate of the WTO to increases flows of technology to developing countries. 
2  RELATIONSHIP BETWEEN TRAD E AND TRANSFER OF TECHNOLOGY 
2.1.  During the year 2012, Members continued their analysis of the relationship between trade 
and transfer of technology largely on the basi s of three presentations – the first entitled 
"Knowledge Transfer and Global Value Chains" by the OECD, the second by the WTO on "Global 
Value Chains and Technology Transfer" , and the third by UNCTAD on " Impact of Bilateral 
Investment Treaties (BITs), Regional Trade Agreements (RTAs) and Non-Equity Modes (NEMs) on 
Transfer of Technology". In addition, at one of the sessions during the year, Members also 
considered a communication from Colombia, Costa Rica, Mexico and Peru, which proposed a workshop, on Trade and Transfer of Technology under the auspices of the Working Group.   
2.2.  In highlighting OECD's work in the area of  global value chains (GVCs) and value added, the 
presentation entitled "Knowledge Transfer an d Global Value Chains", underscored broader 
conceptual issues in the context of GVCs, value added and technology transfer. The presentation 
identified five types of governance models in GVCs (market, modular, relational, captive and 
hierarchy) and stated that the extent of knowledge  transfer varied and depended on the choice of 
model. The relational model was found to be the most beneficial for technology transfer as it 
envisaged face-to-face interactions and high opportunity for mutual learning, as in the case of 
apparels in East Asia and computers in Taiwan. The presentation highlighted that over the past 
decade, the production processes have undergone radical transformation in being segmented and dispersed involving multinational companies and local firms across countries. Citing the cases of 
India and Indonesia, the presentation also pointed to the fact that lowering of import barriers for 
                                               
1 Paragraph 37 of document WT/MIN/(01)/DEC/1.   
2 To be issued. 
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  intermediate goods had a correlation with low prices, larger sales, more variety and quality 
improvement through technology acquisition.  
2.3.  The presentation by the WTO focused on the impacts of fragmentation of production on 
international competitiveness. It highlighted the fact that services and manufacturing firms 
operated increasingly across regions and multiple network production chains and that participation 
in GVCs through FDI also resulted in technolo gy transfer and increased exports. Therefore, 
industrial upgrading and acquisition of adva nced technological capabilities to enhance 
competitiveness had become ever more important.  Knowledge transfer is embodied in traded 
goods and services. The presentation found that: (i) increase in trade volume of developing 
countries could also be attributed to the growing role of supply chains and an ongoing shift to high-tech products; (ii) GVCs played an important role in technology transfer, and national policies 
should be geared to facilitating absorption of te chnologies; (iii) participation in GVCs through FDI 
also resulted in technology transfer and increased exports; and (iv) services are also the enablers 
of global production networks and take an ever increasing role in global production.  
2.4.  Based on two UNCTAD publications – "The World Investment Report 2011" and "Local 
Production of Pharmaceuticals and Related Technology Transfer in Developing Countries", the presentation by UNCTAD on the impact of Bilateral Investment Treaties (BITs), Regional Trade 
Agreements (RTAs) and Non-Equity Modes (NEMs) on Transfer of Technology highlighted that 
NEMs, a middle ground between FDI and trade, were most common in the pharmaceuticals, automotive components, IT services and electronics sectors. By the year 2010, the cross-border trade through NEMs had reached US$2.1 trillion and the NEM-related trade (under the licensing 
sales) had tripled between 1990 and 2009. In the context of technology transfer, NEMs played a 
crucial role in helping the diffusion of technology and skills to local partners. However, upgrading of local skills and training primarily depended upon domestic capacity to absorb and assimilate as 
well as on the nature and content of th e contractual agreement. In making some 
recommendations on how development benefits  from the NEMs could be maximized, the 
presentation listed the following: (i) embedding  NEM policies in overall development strategies 
through providing coherence in trade, investment and technology policies; (ii) building domestic 
productive capacity; (iii) facilitating and promoting NEMs through stable and enabling legal framework; and (iv) addressing negative effect s through strengthening the bargaining power of 
local firms vis-a-vis  foreign firms. 
2.5.  Following these presentations, Members engaged in a productive discussion on: (i) how GVCs 
have impacted on the economic development and trade prospects of developing countries; (ii) the role of governments in promoting participation of local firms in GVCs and promoting technology 
transfer; (iii) how the lowering of trade barri ers in intermediate goods benefit developing 
countries; (iv) what policy steps could be appropriate to enhance trade flows and technology transfer; (v) UNCTAD's work, if any, on guide lines and best practices that could facilitate 
technology transfer; and (vi) what elements countries need to consider while devising a strategy 
for attracting NEMs that come with technology content.   
2.6.  During the year 2013, the analysis of th e nexus between trade and transfer of technology 
continued largely on the basis of UNCTAD's presentation on the impact of NEMs on transfer of 
technology made at the 41
st Session, Pakistan's national experience of using technology to 
improve financial services, data management, information technology as well as its positive impact on people's life, and Secretariat's briefing to  the Working Group on the main elements that 
emerged from a Workshop on "Enviro nmental Technology Dissemination". 
2.7.  In commenting on UNCTAD's presentation on the impact of NEMs on transfer of technology, 
Some Members expressed interest in looking furthe r into some of the issues highlighted in the 
presentation, such as: (i) how to maximize development benefits from the NEMs; (ii) embedding 
NEM policies in overall development strategies through providing coherence in trade, investment and technology policies; (iii) building domestic productive capacity; (iv) facilitating and promoting NEMs through stable and enabling legal framework;  and (v) addressing negative effects through 
strengthening the bargaining power of local firms vis à vis foreign firms. 
2.8.  Pakistan shared its experience on the use of technology to improve financial services, data 
management, information technology and its positive impact on people's life. The presentation, 
while underscoring the importance of technology transfer in integrating developing countries into 
the global economy, also highlighted how informat ion technology (IT), working together with the WT/WGTTT/W/21 
 
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  financial sector, has played an important role in providing mobile financial services across the 
country. In this context, e-banking and "easypaisa" – a mobile financial service - launched by Telenor Pakistan and Ta'ameer Bank in 2009, and "Khushal Munafa" – another mobile financial service – introduced in 2013 were specifically mentioned. The presentation also pointed out that 
these services resulted in financial empowerment, including a huge impact on gender 
empowerment and extension of financial facilities to the rural areas in Pakistan.  
2.9.  The Secretariat made a presentation, on the request of the Working Group, on the main 
elements discussed during the Workshop on "Envi ronmental Technology Dissemination; Challenges 
and opportunities related to environmental technology dissemination" held in November 2012. The Working Group was informed that the workshop t ook place in the context of paragraph 32 (i) of 
Doha Declaration with the  overall objective to discuss barriers to environmental technologies 
dissemination and the extent to which their elimination would contribute to their dissemination as 
well as to the promotion of international sustainable development objectives. The discussions in the workshop focused on three specific environmental technologies; (i) Carbon Capture and 
Storage (CCS) Technologies, (ii) Low Emission Technologies, and (iii) Waste Management and 
Water Treatment Technologies. The experts explained key factors that could facilitate technological innovation, improve access to technologies and their dissemination as well as ways of inducing 
innovation in environmental technologies through public policy. Some experts found that though 
facing regulatory, economic and policy challenges, the CCS technologies can play a vital role in climate change and in this context collaboration and information sharing with the public are important; in the case of low emission technologies, standards, certification, participation of 
developing countries in international standard setting and trade and investment are key in 
promoting innovation and supporting market development; and, effective waste management policies and enabling environment can stimulate development of technology and markets. The 
presentation on waste management also underscored the vital role of science and research, 
legislation in fostering waste management technologies and the contribution these can make in tackling climate change. 
2.10.  In addition, UNCTAD flagged its interest in presenting the findings of its recent study 
entitled, "Technology and Innovation Report 2012: Innovation, Technology and South-South Co-operation" to the Group at one of its sessions.  However, some Members expressed a wish to be 
consulted before an invitation is made to other organizations for making presentations or sharing 
their work with the Working Group.  They also  sought clarity about the procedure for other 
organizations to make presentations to the Group. The Secretariat explained that in line with the 
Work Programme agreed in 2003, the work on th e relationship between trade and transfer of 
technology had been based primarily on th e submissions by Members, work by other 
intergovernmental organizations, academia and sharing of country experiences. It was also 
indicated that a very large number of organizations had made presentations to the Working Group 
in the past. However, on another proposal by a Member, the Working Group agreed to invite the 
Trade and Environment Division of the WTO to share the findings of a workshop that it had organized on "Environmental Technology Dissemination" on 12 November 2012. 
2.11.  While considering a revised communication from Colombia, Costa Rica, Mexico and Peru, 
initially tabled in 2012, on a proposed workshop  on Trade and Transfer of Technology, Members 
agreed, in principle, to hold the workshop. The wo rkshop is tentatively scheduled to take place on 
11 March 2014.   
3  ANY POSSIBLE RECOMMENDATIONS ON TH E STEPS THAT MIGHT BE TAKEN WITHIN 
THE MANDATE OF THE WTO TO INCREASE FLOWS OF TECHNOLOGY TO DEVELOPING 
COUNTRIES 
3.1.  During 2012, Members proceeded with their discussion of an earlier submission by India, 
Pakistan and the Philippines entitled "Facilitating Access to Information on Appropriate Technology Sourcing". Since the submission of this document, a number of Members have commented and raised questions on some elements of the docu ment. In that context, these Members asked the 
proponents whether the submission was still of some interest to them, and if they were 
considering the submission of a revised versio n of the document based on the discussion and 
feedback they had thus far received. The proponents indicated that they were engaged in the 
process of consolidating the room document would soon submit a formal submission to the 
Working Group.   WT/WGTTT/W/21 
 
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  3.2.  In 2013, while discussing the submission "F acilitating Access to Information on Appropriate 
Technology Sourcing", the proponents informed that they were still in the process of revising their 
submission and that they intended to table it in the near future. The Chair encouraged the proponents to do so at the earliest so as to en able the Working Group to engage in a productive 
discussion on the recommendations with a view to  fulfilling its mandate. In this context, the 
importance of national experience sharing was underlined so as to help the proponents to 
undertake informed revision of the submission. 
4  FUTURE WORK 
4.1.  Pursuant to the mandate contained in paragraph 37 of the Doha Ministerial Declaration, and 
subsequent affirmation, in paragraph 43, by Mi nisters in the Hong Kong Declaration, Members 
have examined the relationship between trade and transfer of technology and have also 
considered possible recommendations on steps that might be made within the mandate of the 
WTO to increase flows of technology to developing countries. The ongoing work, on the basis of submissions by Members and contributions by various intergovernmental organizations has 
covered a number of issues and has helped to enhance Members' understanding of the complex 
issues that encompass the nexus between trade an d transfer of technology. Although progress has 
been made, more work remains to be done. In  view of this, Members recommend that the 
Ministers direct that the Working Group should continue its work in order to fully achieve the 
mandate of the Doha Ministerial Declaration. 
 
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