Effects and Policy Considerations for Free Trade Agreements: What Is Wrong with FTAs?
© Springer-Verlag Berlin Heidelberg 2015Christoph Antons and Reto M. Hilty (eds.)Intellectual Property and Free Trade Agreements in the Asia-Pacific RegionMPI Studies on Intellectual Property and Competition Law2410.1007/978-3-642-30888-8_3
Legal Effects and Policy Considerations for Free Trade Agreements: What Is Wrong with FTAs?
Max Planck Institute for Innovation and Competition, Munich, Germany
Reto M. Hilty
Thomas Jaeger (Corresponding author)
3.1 Country Groups
The correlation between the motives and the results behind TRIPS-plus FTAs appears flawed. FTAs currently entail a shift from a fair balance of interests (if it ever existed) towards the interests of developed countries and there is need for action on the level of international law. Remedies must therefore be developed that correspond to the true significance of intellectual property (IP) provisions in FTAs and that defend a fair balance of interests. With a view to providing a starting point for a better understanding of the political, economic and social linkages and parameters underpinning FTA provisions and, on that basis, for a development of remedies, this chapter undertakes to examine two main issues: first, the relationship under international law of TRIPS-plus FTAs to the pre-existing TRIPS regime and the relationship among the provisions of the various FTAs in order to assess the combined legal effect of the applicable rules of international law and of the TRIPS-plus obligations laid down in FTAs; and second, taking into account that background of legal effects, the motives or incentives for states at various levels of development to enter into negotiations over TRIPS-plus standards and to conclude respective FTAs are questioned. By way of conclusion, some initial thoughts on suitable ways to remedy the alleged asymmetries between short-term negotiation trade-offs and negative long-term macroeconomic effects of FTAs are sketched out.
KeywordsDeveloping countriesIP protection in Free Trade AgreementsMost favoured nationsTRIPSWTO
R.M. Hilty: Professor Dr., Director. Full Professor ad personam at the University of Zurich. Honorary Professor at the University of Munich.T. Jaeger: PD Dr., LL.M. (KUL), Senior Research Fellow.
1 Problem Outline
For a number of years now various industrialised nations have unfolded activities aimed at raising the international level of protection for intellectual property (IP) vis-à-vis the level benchmark as currently instituted by the WTO/TRIPS Agreement of 1994 (the so-called TRIPS-plus standards).1 Attempts at revising the TRIPS Agreement itself to raise the standard of protection on a comprehensive, multilateral level within the framework of the WTO have proven unsuccessful thus far. In response, the EU and US in particular have moved to change the negotiating forum, that is, to side-step WTO-type multilateralism and to resort to bilateral negotiations with their overseas trade partners.2 This has meanwhile resulted in a disarray of bilateral free-trade agreements (FTAs), laying down sometimes far-reaching obligations in IP for the parties. The Asia-Pacific Region is no exception here. In fact, a tight net of FTAs exists in that Region, which is commonly referred to as the Asia-Pacific ‘spaghetti bowl’ of FTAs, covering IP issues among other matters.
These agreements raise a multitude of issues which are addressed in the various contributions to this volume. Apart from an in-depth assessment of the different nations’ various FTA negotiation strategies and of the substantive provisions actually laid down in some of the Asia-Pacific FTAs, the macroeconomic bases of and effects for the different economies involved in particular merit a closer look. First, however, two fundamental preliminary matters must be addressed.
As one preliminary point, the relationship under international law of TRIPS-plus FTAs to the pre-existing TRIPS regime and the relationship among the provisions of the various FTAs require examination, particularly as concerns conflicting provisions. On that basis, the combined legal effect of the applicable rules of international law and of the TRIPS-plus obligations laid down in FTAs can be assessed. Do the various FTA obligations mutually add-up in the sense of a regulatory ‘race to the top’, or do they cancel each other out or apply only inter partes, or do they have any other effect and, if so, under what circumstances do these legal effects occur?
Secondly, taking into account that background of legal effects, one may wonder about the motives or incentives for states at various levels of development to enter into negotiations over TRIPS-plus standards and to conclude respective FTAs. Are those motives balanced and how do they affect the quality of the IP provisions laid down? Perhaps alternative approaches to international IP enforcement other than FTAs are called for or at least a modification of the current FTA approach.
With a view to providing a starting point for a better understanding of the political, economic and social linkages and parameters underpinning FTA provisions, these preliminary reflections are undertaken in the sections below. However, any hypotheses built therein will have to be tested against the results of the detailed assessments of strategies, provisions and economic effects of FTAs in the Asia-Pacific ‘spaghetti bowl’. Taken together, the collected contributions to this volume therefore represent a first step towards the development of interdisciplinary explanations for the design of the provisions that are currently found in the various FTAs’ IP chapters and also of a more solid basis for their criticism and future revision.
2 The ‘Spaghetti Bowl Plus One’: Legal Effects of Introducing Additional FTAs into the Bowl
As a precursor to examining the motivation of states to enter into FTAs in the Asia-Pacific region later in this chapter, the legal quality of FTA obligations is to be examined: Given the pre-existing obligations for states under the TRIPS Agreement plus the multitude of pre-existing FTA obligations in the ‘spaghetti bowl’, does it make a difference at all for states to enter into yet another FTA? Does that additional FTA always create additional obligations in terms of a higher standard of IP protection and enforcement? Under what conditions do obligations mutually cancel out? What happens in the case of conflict and how likely is such conflict to arise?
Depending on the answers to those questions, the adding a ‘ladle’ of yet more FTA ‘spaghetti’ to the ‘bowl’ may have severe compliance effects for the states parties concerned or none at all. In turn, the negotiating behaviour and motivation to agree to TRIPS-plus FTAs for states will likely differ significantly depending on the expected real effects of the obligations at hand. The first step to understanding and conceptualizing the IP provisions that are found in FTAs today is therefore the hardcore analysis of their real effects.
2.1 Unrelated Obligations or One Coherent Standard?
The ‘spaghetti bowl’ of FTAs leads to a multiplication of IP-related provisions, so that states are bound by a multitude of parallel obligations vis-à-vis different trade partners. If certain obligations prevail over others in the ‘spaghetti bowl’, it may have the effect of prescribing a dense homogeneous standard rather than being just a complex and random accumulation of unrelated norms.
If FTAs in the ‘spaghetti bowl’ are indeed related in terms of their legal effects insofar as they together set one applicable standard, an additional FTA may either just blend into the existing regime or change the whole regime. Here, the negotiating behaviour of a given state may therefore be either irrelevant in terms of changes to its own and everybody else’s pre-existing obligations or it may have the effect of changing obligations for everybody. Whereas if, on the other hand, FTAs ‘in the bowl’ are random insofar as they do not form a coherent set of rules, a given state’s negotiating behaviour will always be relevant for that state in terms of altering its own obligations, but not for anybody else ‘in the bowl’.
To answer this question, we must determine the relationship between FTA obligations in the ‘spaghetti bowl’. We must, in other words, take a look at the doctrine of a conflict of norms in international law.
2.1.1 Definition of Conflict
The International Law Commission defines conflict as a situation ‘where two norms that are both valid and applicable point to incompatible decisions so that a choice must be made between them’.3 The focus to ascertain the existence of a conflict rests therefore on the compatibility or incompatibility of outcomes and not on singular formal criteria, like, for example, the question of a formal denomination of the subject matter covered.4 This approach to conflicts and conflict resolution is, in other words, one of de facto relationships between rules.5 The relevant de facto or effects-based relationship can be established by an overlap of obligations ratione materiae, ratione personae or ratione temporis.6
Consequently, there can be no conflict where obligations are not related de facto, because the subjects differ substantially or where the addressees or the point in time for which they are in force do not coincide. By contrast, a ‘spaghetti bowl’ setting, where relationships between parties and agreements are dense and complex, thus harbours an intense and multi-directional potential for conflict in terms of the parties involved, substance of aims and obligations or timeline. Furthermore, in order to be deemed conflicting in legal terms,7 the contradictory outcomes warranted by different provisions must be binding.8
Looking at the Asia-Pacific ‘spaghetti bowl’ in particular, the TRIPS-plus FTAs in that bowl are related to one another and to the TRIPS Agreement ratione materiae, as they all essentially aim to stipulate obligations for IP protection and enforcement. The precise aim of those FTAs is to deviate from TRIPS by laying down different, typically higher, standards. Since the FTAs (like the TRIPS Agreement) are typically concluded for an indefinite or at least a reasonably long period of time, the permanency accorded to the obligations contained in them creates an overlap ratione temporis. Finally, the overlap ratione personae results from the (ubiquitous) situation where a given country is party to TRIPS as well as to one or several FTAs. Of these three dimensions, the question as to the extent to which any overlap ratione materiae exists is clearly the contentious issue for determining the presence of a conflict of norms and obligations in the spaghetti bowl. A careful delineation of the substance and scope of the IP-related obligations laid down in TRIPS vis-à-vis those laid down in the FTAs (or between the FTAs) concluded by a given country is consequently of the essence in this regard.
Conflict scenarios in the spaghetti bowl include the TRIPS Agreement being complemented by a later TRIPS-plus FTA, the TRIPS Agreement prohibiting a provision laid down in a later FTA, and the TRIPS Agreement prohibiting the exercise of a right granted by a later FTA.9 For example, conflict may arise where parties to an FTA would agree to exempt favourable concessions in their agreement from the stipulation in TRIPS that ‘any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members’10 (the ‘most favoured nation’ (MFN) clause). Such a unilateral exemption is not foreseen in the TRIPS Agreement. Similarly, TRIPS would prohibit the exercise of an optional right granted to one or both of the parties to an FTA to suspend the application of the MFN clause. As far as the relationship between FTAs is concerned, potential conflict arises from the multitude of players and strategies involved, so that the provisions and standards laid down in the agreements that a given country concludes with its various trade partners may well differ significantly from one another. Scenarios of ‘spaghetti bowl’ conflicts include an earlier FTA prohibiting a provision contained in a later FTA or the earlier FTA prohibiting the exercise of a right granted through a later FTA.
2.1.2 Presumption Against the Existence of Conflict
Even in a complex ‘spaghetti bowl’ setting however, the starting point for assessing the conflict potential for FTA provisions is the international law principle that parties must not be presumed to have willingly entered into incompatible agreements (principle of presumption against conflict).11 A harmonious interpretation of the various obligations that a given party has entered into in the spaghetti bowl is therefore to be attempted as far as possible.
2.1.3 Universal Agreements: Minimum Standards and Favourability Rules
Another important conflict-reducing factor is the practice of laying down simple minimum standards rather than an inflexible minimum–maximum obligation in multilateral (universal) agreements.12 Agreement on minimum standards only fosters compromise at the negotiations, albeit at a risk that the minimums agreed to by the parties are but low. Where states parties bound by low minimum standards agree to adhere to stricter standards vis-à-vis selected trade partners in an FTA, the stricter provisions can normally not contravene the universal obligations on minimum standards.
The most important universal agreement for IP protection incorporating minimum standards only is the TRIPS Agreement. Across the board of the substantive IP rights and the relevant enforcement provisions in the TRIPS Agreement, it accords parties discretion to ‘implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement’.13 For TRIPS therefore, any increase in the protection standard for substantive rights or enforcement provisions would normally be permissible.14 Incompatibilities may only arise in the rare instance where the provisions concerned are reciprocal and mutually incompatible, so that the stricter standard is always necessarily incompatible with another minimum standard. For example, provisions adding to the procedural rights of the rightholder in enforcement litigation may exceptionally encroach upon minimum rights of defence accorded to the other party.15 Notwithstanding a closer examination of this question that is not undertaken here, it seems that prima facie the TRIPS Agreement would not also authorize ‘more extensive protection’16 for rightholders diminishing explicitly laid down rights of defence. Another example of conflict, again irrelevant in practice, would be a contravention of an FTA with the general provisions and basic principles of the TRIPS Agreement, for example, exemptions or suspensions from the principles of national treatment (NT)17 or from the MFN clause18 beyond those foreseen in TRIPS.
A second technique that reduces conflicts between agreements and that is widely used in universal international IP protection agreements in particular is the ‘favourability rule’, under which the agreement or provisions which are more favourable for the protection of rightholders prevail.19 Examples here include the Berne Convention20 (standards more favourable to authors prevail), the Universal Copyright Convention21 (higher standards of protection for literary and artistic works prevail) and the 1961 Rome Convention22 (more extensive rights or protection for performers, producers of phonograms or broadcasting organizations prevails).
As a consequence, the potential for normative conflict between the substantive provisions of a universal IP protection agreement like TRIPS in particular and IP provisions laid down in a ‘spaghetti bowl’ FTA is to be considered negligible in practice. Conflicts would only arise in the rare case of changes in the level of protection for mutually incompatible reciprocal provisions.
2.1.4 FTAs: Concurrence of Aims and NT and MFN Effects
As regards the conflict potential between the obligations entered into by the same party in various FTAs, a similar picture emerges as in the case of conflict between FTAs and universal agreements: the conflict potential is generally low. This is mainly due to three characteristics.
First of all, it was shown (above) that conflict presupposes a partial overlap of the obligations concerned. Between FTAs however, there can usually be no mutual incompatibility of obligations because the parties to the agreements will typically differ: the obligations laid down in an FTA between states ‘A’ and ‘B’ do not usually affect the obligations laid down between ‘A’ and ‘C’, because all obligations in international agreements apply inter partes only.23 Mutual incompatibility of the provisions of several FTAs therefore presupposes that, exceptionally, at least some parties to those (for example, multilateral) FTAs are identical or that there is, again exceptionally, some other relationship of incompatibility although the parties are not identical (for example, B exercises a right laid down in the FTA between A and B that de facto contravenes a right accorded to C in the FTA between A and C). In the IP field however, for the other two reasons discussed immediately below, such situations of de facto incompatibility are even more unlikely to occur than in other areas of international law.
For once, the TRIPS-plus FTAs concluded in the ‘spaghetti bowl’ all pursue identical or similar goals, which is to increase standards and to attain a generally high level of IP protection—at least higher than what is laid down in TRIPS. In this general TRIPS-plus climate, FTAs will usually not forbid parties to go beyond a given level of protection so that, in other words, again some form of minimum standards approach applies. Accordingly, conflicts could arise only where, exceptionally, such a minimum standards approach does not apply. Where, as will be common, an FTA pursues additional aims next to a simple establishment of TRIPS-plus protection, those other aims might work as a counter-balance and effectively stipulate maximum levels or ceilings of protection. For example as regards the EU’s Economic Partnership Agreements (EPAs) examined elsewhere in this volume,24 sustainable development forms the presiding objective for those agreements in addition to their TRIPS-plus concerns. If the relevant other objective effectively introduces a maximum level of protection (and, as was just shown, if some of the parties to the FTAs are exceptionally identical) an FTA–FTA conflict might exist. There is, however, not much likelihood of such a situation arising.
In addition, by virtue of its universal character, the TRIPS Agreement still forms the underlying legal framework for the ‘spaghetti bowl’. In practice, FTAs do not seek explicit conflict with the TRIPS Agreement. TRIPS provisions designed to determine the behaviour of parties on a universal basis pro futuro therefore codetermine the effects of obligations laid down subsequently to TRIPS in ‘spaghetti bowl’ FTAs. Codetermination of legal effects of FTAs concluded by TRIPS parties has, in particular, the object and effect of conflict avoidance but, of course, also of furthering the aims of the TRIPS Agreement itself. Two TRIPS provisions of this kind are particularly pertinent in this regard: the NT principle and the MFN clause.
The MFN clause25 contains an unconditional26 obligation for states parties to the TRIPS Agreement to ‘immediately’ extend ‘any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country’ in relation to the protection of IP ‘to the nationals of all other Members’ of TRIPS.27
The MFN obligation has two implications. First, the highest standard of IP protection accorded by a state in any of the FTAs it has concluded applies vis-à-vis all of its trading partners. Second, the MFN rule avoids an emergence of conflict between the stipulations made in various FTAs as, essentially, less favourable IP protection provisions are simply overruled28 and become obsolete. The state party concerned is therefore always bound by only one (that is, the highest) standard and does not need to apply or sort out the relationships between the various different standards laid down in all of its ‘spaghetti bowl’ FTAs.
A similar effect to that of the universal MFN clause is achieved through the NT principle29 in TRIPS. Under the NT principle, TRIPS parties are obliged to ‘accord to the nationals of other Members treatment no less favourable than that [of] its own nationals’30 in terms of IP protection. The NT principle is therefore the bottom-line to be complied with first—a state must accord all TRIPS members at least the domestic standard of IP protection and not treat them less favourably. Against that background, the MFN clause assumes practical relevance only where a TRIPS party accords the nationals of another party a treatment that is even more favourable than its domestic standards.31 If there is (as seems to be the case for EU IP protection, for example) no more favourable protection standard laid down internationally than is laid down domestically, only the domestic standard applies.
The NT principle, therefore, again works to ensure that the highest applicable standard of protection is extended to all other TRIPS members. In doing so, the NT principle may, in particular, overrule lesser standards of protection laid down in an FTA, so that the FTA standard becomes irrelevant for a party which already applies more favourable standards for its own nationals. Furthermore, the NT principle is also a tool for avoidance of conflict among a multitude of standards existing in the ‘spaghetti bowl’, as—at least for incoming (foreign) rightholders—only one level of protection applies.
In sum therefore, the MFN clause and the NT principle fulfil similar and complementary roles in (1) ensuring universal application of the highest standard applied by a given party, and (2) avoiding conflict via an immediate harmonization of applicable standards at the level of that highest standard.
For illustration, let us imagine a setting where the EU concludes TRIPS-plus FTAs with two separate countries ‘A’ and ‘B’ at lower (Lt) and higher (Ht) TRIPS-plus levels respectively. All parties are also parties to the TRIPS Agreement. The lower (Lt) and higher (Ht) TRIPS-plus standards are set above the previous domestic levels in A and B respectively. In this setting, the combined application of the MFN clause and the NT principle yields the following picture. Presuming that the EU has laid down domestic standards that are higher or equal to the standards of its TRIPS-plus FTAs with A(Lt) and B(Ht), rightholders from A(Lt) or B(Ht) will always see that standard applied when seeking protection in the EU, without there being room or need for an application of the respective FTA. Rightholders from the EU seeking protection in A(Lt) and B(Ht) will be able to rely on the Ht-standard in B(Ht) and on the Lt-standard in A(Lt), unless A or B apply a higher standard in an FTA with another trading partner than the EU. If so, that higher standard applies also for EU rightholders seeking protection in A or B by virtue of the MFN clause. The clearest emergence of the MFN-effect, however, is in relation to rightholders from A(Lt) seeking protection in B(Ht). Even where A and B have no FTA in place between themselves or where they do have an FTA in place that is less favourable than the EU-B(Ht)-FTA, rightholders from A(Lt) can rely on the TRIPS-plus standard that B has accorded the EU in the EU-B(Ht)-FTA by virtue of TRIPS’ MFN clause.
2.1.5 Result: One Coherent Standard Set by the ‘Spaghetti Bowl’
In spite of a multitude of ‘same aim’ TRIPS-plus FTAs in the Asia-Pacific ‘spaghetti bowl’, a closer look reveals that we are in fact dealing with related norms setting the framework for a more or less one coherent IP protection and enforcement standard. This is due to the fact that universal agreements relating to international IP protection make widespread recourse to minimum standards and to favourability rules, which authorize subsequent FTAs as long as the obligations contained therein do not fall behind the universal standards. In addition, international law applies a principle of presumption against conflict, under which a harmonious interpretation of seemingly incompatible obligations is to be attempted as far as possible.32 For TRIPS-plus FTAs (such as those of the Asia-Pacific spaghetti bowl), conflicts with the universal framework of the TRIPS Agreement and other international IP protection agreements are practically excluded. At the same time, normative conflict between FTAs entered into by the same party is not likely either, due to lack of an overlap of obligations ratione personae. In addition, FTAs too typically do not stipulate maximum protection levels, but minimum protection obligations. A conflict between FTAs thus presupposes the unlikely situation of a concurrence of an introduction of a maximum level of protection and an identity of parties to the FTAs concerned.33
2.2 Excursus: The Odd Exception of Conflicting FTAs in the ‘Spaghetti Bowl’ and Their Legal Effects
It was just shown that the ‘spaghetti bowl’ setting is one of a coherent standard for IP protection and enforcement, where norms are related but normative conflict is unlikely to arise. Nonetheless, for the sake of completeness of the examination, we shall briefly deal with the rules applicable for the remote chance that exceptionally an additional FTA would incorporate a conflicting standard and assess the legal effects of such an odd FTA on the rest of the ‘spaghetti bowl’.
The relatively most probable, yet in practice quite remote, scenario of a conflict is that between two FTAs in the ‘spaghetti bowl’, with both FTAs being applicable between (at least partially) same parties and with one of the FTAs introducing a maximum level of protection superseded by the other.34 In this way, either a stipulation made in one agreement might be prohibited by a ceiling contained in another agreement or, simply, the stipulations made in both agreements lead to contradictory results.
Outside the limited applicability of the concept of ius cogens,35 international law does not know an ex ante hierarchy of norms.36 This absence of a pre-established hierarchy among the norms of international law means that in the ‘spaghetti bowl’ setting, no agreement can be deemed superior in terms of a derogatory or invalidating relationship. In particular, the TRIPS Agreement does not per se prevail over specific FTAs. Likewise within the general WTO framework, the specific agreements—TRIPS, the General Agreement on Tariffs and Trade (GATT)37 and the General Agreement on Trade in Services (GATS)38—stand on the same level,39 so that principles laid down in the various sub-agreements (most importantly GATT’s enabling clause40 or exceptions for regional trade agreements)41 are prima facie not significant for the application and interpretation of TRIPS. It is only the ‘chapeau’42 of the WTO Agreement that prevails over the more specific agreements—TRIPS, GATT and GATS—and guides their application in broad terms.43 In sum therefore, WTO and TRIPS law do not possess any special quality that would automatically prevent or remove the binding character of contravening international obligations laid down elsewhere, particularly not in FTAs.44
Corresponding to the absence of a pre-established normative hierarchy in international law is the absence of a hierarchy of aims and values.45 Development-friendly provisions in agreements are, therefore, not to be applied or interpreted under more favourable conditions than provisions protecting the interests of stakeholders from industrialized nations or fostering trade liberalization and vice versa.
In sum thus, all obligations entered into by states in a ‘spaghetti bowl’ setting have the same binding force, irrespective of whether they were agreed in a universal or a bi- or multilateral setting or in- or outside the WTO framework and irrespective of the aims pursued.46 This means that where normative conflict arises, that conflict must be resolved by means other than a normative hierarchy between allegedly higher-ranking or more important and lower-ranking or less important agreements. Notions such as the latter are alien to international law.
Where normative conflict exists, several conflict resolution tools may be applied.47 One tool is the aforementioned principle that ius cogens automatically devoids and terminates any conflicting treaty provisions.48 However, the substance of ius cogens is not immediately relevant to the area of international IP protection of interest in the present context.49
Other than ius cogens, the conflict resolution tools applied in international law are all known from or similar to principles applied in national law. Most50 of them are codified in the Vienna Convention on the Law of Treaties (VCLT).51 Those tools are the principles of
In addition, certain other principles of international law are applied in the interpretation of conflict situations—these principles are substantive (for example, the principles of good faith and of error) and procedural (for example, the definition of legal interest, the significance of party refusal to provide information, the competence to assess own jurisdiction or the non-retroactivity of treaties).57 The overall motto for application of all of these principles is, as in national civil law, the exploration of the true will of the parties.58
For the ‘spaghetti bowl’ setting, the fundamental determinant from among the aforementioned conflict resolution rules is the pacta tertiis principle,59 under which no state can lay down binding obligations vis-à-vis a third state without its consent. It governs the scope of application of other principles such as the lex posterior rule,60 under which the later agreement between parties removes earlier obligations between those parties, and of the lex specialis rule,61 under which more specific obligations between the same parties override more general provisions laid down between those parties. In other words, any stipulations made between states only bind those states. Likewise, derogation or priority application under the principles of lex posterior and lex specialis always presupposes an identity of parties (and of subject matter).
In line with these principles, the VCLT stipulates a number of rules on the termination and modification of obligations laid down in international agreements, such as FTAs. For example, the VCLT stipulates that a treaty as a whole (not just one of its provisions) may be terminated where all parties agree to the termination at least implicitly.62 Obviously in the ‘spaghetti bowl’, this scenario has no relevance for determining the relationship of the various FTAs with the TRIPS Agreement or vis-à-vis one another. As concerns a modification of pre-existing obligations through an FTA, the VCLT establishes that an earlier treaty may be modified as a whole or in respect of certain provisions where all parties to the earlier treaty agree to its modification63 or where that older treaty provides for the modification.64 Such a modification would derogate from the older obligations in the sense that the older obligation would not come back into force if the newer obligation ends. Where the modification is not agreed among all the parties to the earlier agreement but just by some and the modification is also not provided for in the earlier treaty, the modified obligations apply only inter se, that is, between the parties that consented to the modification (provided that the new obligation is not incompatible with the objectives of the earlier treaty).65 Where these conditions are not fulfilled, the modification is invalid and thus conflict with the later provision persists.
In the ‘spaghetti bowl’, from among these rules of the VCLT only the possibility to modify earlier treaty obligations inter se and without general derogatory effect is relevant in practice. Every TRIPS-plus FTA in the ‘spaghetti bowl’ constitutes a modification of the obligations laid down in the TRIPS Agreement. From the point of view of international law, that FTA constitutes a valid modification of the earlier TRIPS obligations between the parties concerned. In addition, the MFN clause contained in TRIPS functions partially as an enabling clause for such FTAs, insofar as—via the MFN clause—the obligations under TRIPS of the parties that have concluded the FTA are modified along erga omnes