Comments%20for%20TRIPS%20Plus%20Ten:%20Economic%20Implications

1
Comments for TRIPS Plus Ten Economic
Implications

• Keith Maskus
• Prepared for SIDA/ICTSD Conference, Stockholm, 24
  September 2004

2
Perspectives

• A trade economists view of IPRs and development
• Based both on researh and practical experience
• Complex questions without simple answers focus
  on a few themes

3
Expectations of TRIPS

• Original idea agreement on counterfeiting and
  piracy
• There were many differences among developing
  countries.
• Positive expectations
• Central concession in return for market access
• Additional flows of ITT and research
• Shift of global innovation toward needs of poor
  countries
• Relief from IPR-related trade threats and access
  to dispute resolution.

4
Have Expectations Been Met?

• Considerable dissatisfaction among
  developing-country governments
• Weak link to market access
• Limited success in ITT
• Recognition of need for broader reforms
• Not much evidence of targeted innovation
• Concerns in agriculture, medicines, science and
  education.

5
Was TRIPS a Good Idea?

• Yes, because of policy externalities.
• Yes, because IPRs are a pillar of market support.
  
• But the details of TRIPS leave considerable room
  for argument about how well or how equitably IPRs
  are globalized.
• Importance of flexibility.

6
Is TRIPS a Boost for Development?

• Positive case for TRIPS
• IPRs support market deepening and product
  quality, even at low development levels.
• IPRs support greater flows of ITT.
• IPRs offer scope for improving commercialization
  of publicly supported research.
• IPRs can improve scope for implementing critical
  new technologies.

7
Is TRIPS an Obstacle to Development?

• Negative case for TRIPS
• Heavy demands on development budgets and
  expertise.
• Limits policy space for learning and imitation.
• Raises potential for anti-competitive activity.
• Stronger protection could reduce technology flows
  to poorest countries.
• Neutral case impacts may be slight in poor
  countries.
• One opinion it is still too early to be
  confident of much.

8
Focus on ITT

• Importance of inward technology for development
• Both access and adoption/learning are necessary
  for productivity.
• Major market-mediated forms of ITT
• Trade in goods and services (capital goods)
• Foreign direct investment
• Technology licensing (patents, trademarks,
  know-how)
• Non-market forms are also important

9
Potential Market and Policy Failures

• Asymmetric information and transactions costs
• Market power and markups on technology prices
• Externalities and spillovers
• Policy coordination difficulties
• Subsidies and tax holidays
• Trade and investment policies
• Intellectual property rights

10
TRIPS and ITT

• TRIPS-like protection can resolve some of these
  difficulties.
• But evidence suggests other problems could be
  worsened in poor countries.
• ITT is likely to be enhanced by differentiated
  innovation regimes and IPR standards,
  safeguarding policy space.

11
TRIPS Provisions on ITT

• Article 7 IPRs should contribute to the
  promotion of innovation and transfer of
  technology.
• Article 8.2 freedom to prevent IPRs abuses that
  interfere with ITT.
• Article 66.2 positive obligation of developed
  countries to provide incentives for enterprises
  to promote ITT to LDCs.
• Inherent difficulty of this task.

12
Increasing ITT Host Country Policies

• General support for technology adoption and ITT
• Need for policy flexibility regarding nature of
  market failures, imitation prospects, competition
• Low-income countries should have wide exemptions
  from rigorous IP protection, especially where
  public goods are involved.

13
Increasing ITT Source Country Policies

• Improve market access.
• Technical assistance for capacity building and
  technology adoption. Consider undertaking
  competition policy actions on behalf of
  developing countries.
• Fiscal incentives for ITT in parallel with those
  for disadvantaged regions in OECD.
• Encourage differential pricing strategies,
  especially for data and research results.
• Greater opportunities for temporary movement of
  technical workers and students.
• Public research programs into LDC technology
  needs.

14
Multilateral (WTO) Cooperation

• Extend Article 66.2 on a graduated basis.
• Re-visit WTO rules on subsidies to expand policy
  space for ITT.
• Clarify that TRIPS permits research exemption in
  patents and PVRs.
• Expand information flows on effective
  interventions.
• Expand Mode 4 GATS negotiations (temporary
  movement) to include acquiring education and
  skills (a knowledge export).

15
Other Multilateral Options

• Dedicated small fee on international patent and
  trademark applications.
• Move toward consideration of a multilateral
  agreement on access to basic science.
• Consider additional measures for price
  differentiation in information products.
• Clarify international norms on the scope of fair
  use in digital works.

16
Concluding Remarks

• TRIPS a qualified success.
• TRIPS needs to be implemented in good faith.
• Reiterate the need for careful consideration of
  appropriate standards and flexibilities.
• There is scope for improving ITT processes.
• Developing countries need complementary policies.