Securing the Knowledge Empire

Peter Drahos and John Braithwaite on how the US has used bilateral deals to secure its predominance in the information economy

The protectionist intellectual property paradigm that the US has quietly globalised over the last 20 years or so has attracted little comment outside of specialist circles. Peter Drahos and John Braithwaite investigate how, alongside the multilateral policymaking forums, the US has used bilateral deals to secure its predominance in the information economy

Since the mid-1980s, a sea change has been taking place in the way that international standards of intellectual property are set. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has turned out to be a floor without a ceiling, and the hopes of many developing countries that the US would be content with the gains brought by its standards regime, to be hopelessly naïve. In fact, in the globalisation of their protectionist intellectual property paradigm, the corporate actors responsible for TRIPS at the end of the 20th century were merely laying the foundations for the knowledge economies of the 21st.

TRIPS was not just the product of private governance. It was also one of economic coercion in the face of the resistance felt from developing countries when the US began to push for the inclusion of intellectual property in the General Agreement on Trades and Tariffs (GATT) at the beginning of the 1980s. Developing countries, which at that time held about one per cent of the world’s patents and were desperate for access to western technology, knew that such a proposal would not be in their interests.

The US understood that many of these countries – the most active amongst them, India, Brazil, Argentina, Cuba, Egypt, Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia – were dependent upon access to its markets under the Generalised System of Preferences (GSP). It began a process of reforming this system to create a national trade enforcement tool for US corporations. Under US trade law, US corporations were now able to petition the US Trade Representative to withdraw benefits of trade agreements, or impose duties on goods from foreign countries that were not extending adequate and effective protection for US intellectual property. The Trade Representative then had the option of listing countries under what came to be known as the ‘301’ process.

There is nothing very secret about this process. Almost every developing country that opposed the US at the GATT stage has ended up being listed for bilateral attention under it by the US. In 1988 the US changed its Trade Act to make resisting its wishes in a multilateral forum part of the conditions that could lead to a country being identified as a Priority Foreign Country and therefore the subject of a Special 301 investigation. Developing countries hoped that by negotiating multilaterally there was the possibility that they would be able to obtain some limits on the use of 301 actions by the US on intellectual property. Such was the suggestion of developed country negotiators and the GATT Secretariat. In fact, exactly the opposite happened. During the 1990s the US increased its unilateral surveillance of countries on intellectual property issues. By 2000 more than 70 countries had been reviewed under Special 301, with 59 foreign countries failing to meet satisfactory standards, whose laws and practices on intellectual property had to be watched.

Thus the global regulatory ratchet the US created in the 1980s and 1990s consists of waves of bilateral agreements followed by occasional multilateral or regional standard-setting (e.g. TRIPS and the North American Free Trade Agreement (NAFTA)). Each wave of bilateral or multilateral treaties enforces existing standards and very often sets new ones. In all these agreements states are bound not to offer less protection than agreed to, but are allowed to offer more extensive protection than is required. Thus the ratchet only ever moves upwards. Its latest manifestation is in the free trade agreements that the US has concluded with Jordan, Chile and Singapore. These all contain long and detailed provisions on intellectual property, provisions that are ‘TRIPS-plus’. The US is globalising domestic intellectual property standards that meet its own economic needs and fit with its cultural and philosophical traditions. What the US Supreme Court has declared to be its domestic position, namely that anything under the sun is patentable finds deep opposition around the world. Many have strong reservations about the patentability of plants, animals and human genetic resources, based on a variety of ethical perspectives and traditions, including religious, indigenous and environmental ones. Yet the US has relentlessly pushed such provisions in TRIPS and subsequent bilateral agreements. It is equally relentless in seeking to impose upon the world a system of agriculture in which the farmer becomes the lessee of patented seeds, plants, fertilisers and pesticides. Fears that this technology does not meet the needs of subsistence farmers around the world, that it carries with it environmental risks that have not been properly assessed, that it cuts across farming traditions such as the saving and exchange of seed or that it requires economies of scale that few countries can really exploit are brushed aside by its US multinational overseers, who respond by threatening litigation in the WTO.

The US has also been successful in excluding from TRIPS the recognition of authors’ rights, based on European philosophical traditions that recognise an indissoluble link between creators and their works (the key ones being the right to paternity – which gives, for example, the composer of a song the right to be identified as such, and the right to integrity – the right of the author of any type of work and film to object to any addition to, deletion from or change to his or her work if this is detrimental to the work or to the reputation of the author). Hollywood, in the form of the Motion Picture Association Of America (MPAA), has been opposed to these rights because they are potential interferences in its world-wide system of production, marketing, distribution and exhibition. Yet at the same time actors like the MPAA invoke free speech values to argue that there should be no restrictions on the circulation of US film, television and other copyright works. Of course, there is a trade agenda – because as has been known for a long time, trade follows the film. The practical upshot of these free speech/free trade arguments is a constant pressure to remove quotas. No quota is too low to be ignored. When Indonesia imposed a screen quota requiring its First Run theatres to show at least two Indonesian films each month for a minimum of two days both the MPAA and the International Intellectual Property Alliance raised the matter with the USTR as part of their recommendation in 1993 to list Indonesia under the 301 process. The endgame for Hollywood is zero restriction on its capacity to dominate any type of screen in the world at any time and place. The US fashions and globalises intellectual property standards based on its own economic institutions, extending its sovereignty, ignoring the world’s moral diversity and the desire of different societies to pursue different paths to development. Underneath the individualist ideology of intellectual property there lies an agenda of under-development, of maintaining economic hierarchy. Today’s global intellectual property paradigm is about protecting the knowledge and skills of the leaders of the pack. In the US, state and US multinationals remain committed partners in the institutional project of information feudalism: acquiring and maintaining global power based on the ownership of knowledge assets. Meanwhile the inequalities and problems of this global redistribution of property rights in information are only slowly coming to be understood.

Peter Drahos <Peter.Drahos AT anu.edu.au > and John Braithwaite <John.Braithwaite AT anu.edu.au > are the authors of Information Feudalism: Who Owns the Knowledge Economy? (Earthscan, London, 2002)