Will the TRIPS Agreement Foster Appropriate Biotechnologies for Developing Countries?
ABSTRACT While almost all of the investment in agricultural biotechnology to date has been in temperate crops suitable for developed countries, developing countries are the greatest potential beneficiaries of this major technological advance. To realise this potential requires investment in crops appropriate to climatic and agronomic conditions in developing countries. Protection of intellectual property rights is a necessary condition for the private sector to invest in appropriate biotechnologies. This paper develops a game theoretic model of a bioscience firm that adapts a new technology to a range of agronomic conditions in response to the enforcement of intellectual property rights in a developed and a developing country. Over a range of potential penalties, low levels of enforcement by the developing country remain endemic despite the desire to have the bioscience firm adapt the biotechnology to its local conditions. In particular, the trade penalties contained in the Agreement on Trade-Related Aspects of Intellectual Property Rights are likely to be ineffective. The developing country might increase enforcement if the developed country was more aggressive in liberalising agriculture trade because there would be greater symmetry in the benefits of the technology. Copyright 2007 Blackwell Publishing Ltd.
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ABSTRACT: Currently there are proposals and negotiations regarding the strengthening of protection for geographic indicators (GIs) in the WTO. A major proponent of stronger protection for GIs has been the European Union. One of the arguments it has put forward for stronger protection has been that it will provide an avenue for economic development for agricultural producers in developing countries – a way to capture rents in the markets of developed countries. This paper first outlines the proposed changes to the international protection of geographic indicators. Second, the potential for groups of producers to generate and capture rents in foreign markets is assessed under differing assumptions pertaining to industry structure, product differentiation in the short and long run, barriers to entry reputation and the form of legal protection in importing countries. A discussion of the resource requirements to establish and maintain a GI is also provided.
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ABSTRACT: High transaction costs and an absence of institutional infrastructure in developing countries prevent comprehensive enforcement of intellectual property rights and generate obstacles to the adoption of genetically modified (GM) crop technology. Governments of developing countries that are members of the World Trade Organization are faced with two options when licensing GM crop technology: (1) attempt to regulate GM crops to the standards of the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) or (2) allow a black market in GM seeds and risk trade retaliation from the GM innovator's host country through a TRIPS trade complaint. This paper develops a conceptual model that frames the adopting country's range of licensing options, including a new levy system, and derives welfare measures for each option. The model illustrates how a levy on GM technology can be a welfare-increasing policy for developing countries, and the operation of a levy is discussed. The conceptual model is applied to Brazil's soybean market and quantitative economic surplus measures are estimated within a calibrated welfare model for a range of licensing scenarios. The model's results suggest that a levy may interfere with the long-term prospects for innovators to collect monopoly rents in adopting countries. Copyright (c) 2007 The Agricultural Economics Society.Journal of Agricultural Economics 02/2008; 59(2):217-236. DOI:10.1111/j.1477-9552.2007.00141.x · 0.97 Impact Factor