RESTRICTED  
 WORLD TRADE  
ORGANIZATION  WT/WGTTT/W/14 
29 November 2007 
 (07-5239) 
  
Working Group on Trade and Transfer of Technology  
 
 
DRAFT 
 
 
REPORT (2007) OF THE WORK ING GROUP ON TRADE AND  
TRANSFER OF TECHNOLOGY TO THE GENERAL COUNCIL 
 
 
I. INTRODUCTION 
1. At the Doha Ministerial Conference Ministers ag reed to "an examination, in a Working Group 
under the auspices of the General Council, of th e relationship between trade and transfer of 
technology, and of any possible recommendations on st eps that might be taken within the mandate of 
the WTO to increase flows of technology to developing countries".1   
2. Since its report to the General Council in 20062, the Working Group has held four formal 
sessions (12 April, 4 July, 19 October and 7 De cember 2007).  The minutes of these meetings are 
contained in documents WT/WGTTT/M/19, WT/WGTTT/M/20, WT/WGTTT/M/21 and WT/WGTTT/M/22
3, respectively.  At these meetings, Members continued the analysis of the 
relationship between trade and transfer of technol ogy, and considered possible recommendations that 
might be taken within the mandate of the WTO to increase flows of technology to developing 
countries.   
II. RELATIONSHIP BETWEEN TRADE AND TRANSFER OF TECHNOLOGY 
3. In 2007, work on the relationship between trade and transfer of technology continued largely 
on the basis of a presentation made by UNCTAD and a country presentation made by the Philippines.   
4. At the 19th session of the Working Group, Members continued their consideration of the 
relationship between trade and transfer of technol ogy on the basis of an earlier briefing by UNCTAD 
on their ongoing work on "Trends in Cross-Border Flows of Technology".  The presentation identified 
six indicators for assessing cross-border technology flows.  These included;  (i) payment of royalties and licensing fees by the users to technology provide rs;  (ii) trade in capital goods;  (iii) trade in 
business and professional services;  (iv)  the number of patents filed;  (v) the flow and expenditure of 
transnational corporations in research and developm ent (R&D);  and (vi) the growth of industrial 
alliances.  The presentation demonstrated the fact  that technology owners hip and development was 
mostly concentrated in developed countries.  A li mited number of developing countries with larger 
markets, and with some production and technological  capacity already in place, had to an extent, 
benefited from technology flows.   
5. UNCTAD's contribution was considered useful to the work of the Working Group and a 
number of Members felt the focus of work in th e Working Group should be at the macroeconomic 
level, rather than follow a microeconomic appro ach.  These Members felt that considering trade 
                                                     
 
1 Paragraph 37 of WT/MIN/(01)/DEC/1. 
2 WT/WGTTT/8. 
3 To be issued. WT/WGTTT/W/14 
Page 2  
 
  policy from a broader perspective would provide a better response to the technological needs of 
developing countries.  Members considered UN CTAD's contribution as useful in facilitating 
discussions in the Working Group and in providing a better understanding of th e relationship between 
trade and transfer of technology.  
6. At the 20
th session, the Philippines made a presentation on its experience with technology 
generation and its transfer.  The presentation stressed that the successful transfer of technology played 
an important role in stimulating the formation an d growth of advanced technology entrepreneurial 
start-ups, contributed to increased revenues of ex isting firms and made a positive contribution to the 
country's economic development.  In addition,  improved allocation of resources among economic 
sectors and industries, as well as the generation and adaptation of technology had resulted in better 
organization of firms which had led to greater competitiveness, growth and productivity across the 
economy.   
7. The presentation showed that the FDI had led to a strong technological base and high-value 
addition in the Philippines' semi-conductor sector.  Intellectual Property Philippines (IP Philippines) 
had also played a crucial role in technology transf er.  In order to promote technology transfer, IP 
Philippines had expanded its relationshi p with other partners in the private sector so as to increase 
technology dissemination, diffusion and absorption.  The expansion of a cross-country network of intermediaries, comprising provincial research and innovation organizations, university research 
centres and the private sector was encouraged by the government as a matter of policy.  Foreign study 
and training were also effective tools in the tr ansfer of technology and know-how.  The Philippines 
had also attempted to tap the expertise of  overseas Filipino experts and scientists.   
8. Some of the policy challenges that the Philippi nes had faced in its efforts to create a sound 
knowledge and technological base included:  technology contracts containing provisions relating to 
exclusive rights for the supply of machinery;  technology contracts demanding guarantees against 
changes in taxes, tariffs, currency exchange rates,  remittances and royalties and contracts containing 
provisions for the excessive use of foreign techni cians and limited use of competing technologies.  
The high cost of technology transfer, specially in  monopolistic arrangements and the manipulation of 
payments in joint ventures, was also identified as an  impediment in this regard.  The designing of 
appropriate incentive measures and an institutional s upport system that would ensure a more effective 
and widespread use and diffusion of foreign technology throughout the whole economy, had also been a crucial policy challenge.  The need to enhance a sub-contracting system by strengthening small-and 
medium-sized enterprises' (SMEs) capabilities and th eir linkages to big enterprises had also been a 
major challenge. 
9. During the discussion, a number of Members expressed the view that international 
agreements in the area of technology transfer had an important role to play in technology transfer.  In 
that context, a number of provisions in the WTO Agreements such as Articles 7, 8, 62 and 66 of the TRIPS Agreement were cited.  The importance of public policy in encouraging public-private 
partnership, the linkage of foreign investment w ith SMEs and the interface between technology and 
human resources were also highlighted.  The role of  Aid for Trade in the context of capacity building 
and the development of human cap ital was also underscored.   
10. At the 21
st session, Members continued their discussion on the elements of the Philippines' 
presentation.  Clarifications were sought on some el ements of the presentation, including what future 
plans the Philippines had to attract technology, as well as its experience with the linkage between 
intellectual property and technology transfer.  The role of public policy, linkage between foreign 
investment and the small and medium enterprises, and development of human capital in a country's 
efforts to develop its technologi cal base was also underscored.  Th e Philippines intends to provide 
sectoral examples on its experience with technology tr ansfer at one of the future meetings of the 
Working Group.   WT/WGTTT/W/14 
 Page 3 
 
 
  11. Members agreed that sharing of national expe riences in technology transfer had value in 
broadening the scope of their deliber ations and helped clarify some of the complex issues they were 
grappling with in the Working Group.  It was felt that such knowledge-sharing exercises would 
facilitate a better understanding of the complex nexu s between trade and tran sfer of technology and 
hence help make progress in the Working Group.   
III. ANY POSSIBLE RECOMMENDATIONS ON STEPS THAT MIGHT BE TAKEN 
WITHIN THE MANDATE OF THE WTO TO INCREASE FLOWS OF TECHNOLOGY TO DEVELOPING COUNTRIES 
12. Members continued their consideration  of possible recommendations on steps that might be 
taken within the mandate of the WTO to increase fl ows of technology to developing countries on the 
basis of the revised non-paper tabled by India, Pakistan and the Philippines.  The non-paper 
elaborated upon some of the possible recommendations
4 tabled earlier by these Members.   
13. At the 19th session, India, Pakistan and the Philippines introduced a revised version of the 
room document, which built upon the recommendati ons contained in their earlier submission 
(WT/WGTTT/W/10) and provided responses to some of the clarifications that had been sought by 
some developed Members.  The issues highlighted in the revised room document included:  the 
linkage between Articles 67, 66.2 and 7 of the TRIPS Agreement;  mechanisms on voluntary 
guidelines developed by OECD;  exchange of in formation on investment and technology-related 
incentives and best practices in tec hnology transfer;  information sharing among patent offices;  and 
the linkage between technology transfer and the te mporary movement of na tural persons under Mode 
IV of the GATS.  The Montreal Protocol, a multilateral environmental agreement containing 
provisions on the transfer of technology, was consid ered as something that could be used as a model 
to develop possible recommendations on facilitating transfer of technology.  In this context, 
references were made to Article 10 (Financial Me chanism) and Article 10(a) (Technology Transfer) 
of the Montreal Protocol.    
14. Members welcomed the revised room document as a step in the right direction and 
commended its focused approach.  Clar ifications  were  sought on certain issues contained therein.  On 
paragraph 10 in document WT/WGTTT/W/10, one Member asked how the WTO could avoid 
duplication of work in other organizations if it we re to act under the guidelines being proposed.  The 
need for making clarifications with regard to the provision of technical assistance in Article 67 of the 
TRIPS Agreement, as sought in paragraph 7 of th e document was also questioned.  In addition, 
guidance was sought on the application of the mechanisms in the Montreal Protocol in the context of 
transfer of technology.  Some Members suggested th at the proponents  consider tabling the document 
as a formal submission in order to facilitate  the reflection process in the capitals.   
15. Discussions under this agenda item continued at the 20th session.  The proponents provided 
responses to some of the clarification sought earlie r by some Members.  One Member shared the 
proponents' views on the need to clarify the linka ge between Articles 67, 66.2 and 7 of the TRIPS 
Agreement and on the importance of informati on sharing and cooperation among patent offices.  
Clarification was sought as to whether the proponent s were proposing an additional mechanism when 
they had asked to clarify on the linkage betwee n the above Articles of the TRIPS Agreement.  
Clarification was also sought on whether the propon ents had intended to expand the application of 
Article 66.2 to all developing countries.  Some Me mbers stated that they were still reviewing the 
document and would make comments on it at future meetings.   
                                                      
4 WT/WGTTT/W/10. WT/WGTTT/W/14 
Page 4  
 
  16. At the 21
st session, Members generally acknowledged the role that Mode IV of the GATS 
could play in the transfer of technology.  In that context, underscoring the direct link that 
intra-company transferees provided to technology tran sfer, the view was expressed that that was an 
area in which Members should pursue new or im proved market access commitments in the GATS.  
The discussion also underscored the importance of appr opriate investment promotion for an effective 
programme of technology transfer.  In that cont ext, one Member asked how the measurement of 
restrictions on FDI and technology transfer coul d be built into the consideration of the proposals 
tabled in the revised document so that the Wo rking Group and other WTO bodies equipped with the 
relevant expertise could gauge their potential.   
17. At this session, the Philippines suggested, and Me mbers agreed, that the Secretariat prepare a 
self-contained document containing a summary of di scussions since the inception of the Working 
Group.   
IV. FUTURE WORK 
18. Although the work carried out in the Working Group has contributed to a better 
understanding of the issues involved, much work still remains to be done.  It is expected that in the 
coming year work would continue on the relations hip between trade and transfer of technology, as 
well as on any possible recommendations on steps that  might be taken within the mandate of the 
WTO to increase flows of technology to develo ping countries.  While the discussions on the 
relationship issue are likely to benefit from nati onal experiences with technology generation and its 
transfer, the focus of work on the possible recommenda tions will need to be pursued on the basis of 
existing (WT/WGTTT/W/10) and future submissions by Members. 
 
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