Trade and Intellectual property

“TRIPS is probably the most significant agreement of the 20th Century”

(TRIPS = Trade Related Aspects of Intellectual Property Rights, a World Trade Organization agreement)

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“…The TRIPS case study I think it’s a very important study in how a trade negotiation fails citizens. Because it was conducted in secrecy. Consumers weren’t present but even more importantly it was drafted by the corporations themselves because corporations have a lot of technical expertise. That have patent attorneys. They have intellectual property lawyers that are advising them. And so they were actually able to draft clauses, in fact, there was an entire draft agreement that was tabled by the Intellectual Property Committee before negotiators in the late 1980s. And essentially multinationals from Japan and from Europe and from the United States said to world governments this is what we want.

So it’s not just a case of simple lobbying. It’s a very sophisticated form of global networking in which actual text produced to influence what are ultimately public laws. So the idea that private power drafts laws that we all have to abide by is something that should worry people in democracies.

FRIES: You’ve written extensively that a corporate elite has played the knowledge game for over a century but wanted to change the rules of the game several decades back. And that the appointment of Edmund Pratt to Pfizer as CEO in the 1970s was a key event in making it happen. Talk about that.

DRAHOS: Well I think the Pfizer story is a really interesting story about how one can change the world. How individuals can change the world. So we often talk about globalization as this abstract thing but what we don’t realize is that individuals have important ideas. Now in the case of Pfizer & Edmund Pratt as well as the consultants that he hired or that gave him advise their big idea was to stick intellectual property into trade agreements. It’s a simple but very, very powerful idea. So the whole significance of this story in a way lies in the fact that individuals change the rules of the game. Globalization is not just an abstract force. People make our world and they make it in response to certain values or goals that they have.

FRIES: Talk about the key players and their agenda.

DRAHOS: The key players were the pharmaceutical industry because they were amongst the first companies to internationalize. They saw the possibility of markets in poorer countries like India & China. But aside from pharmaceutical companies there were also telecommunications companies or what we now broadly understand to be information technology companies because they could see the importance of global markets. Agricultural companies, companies that related in farm related activities like Monsanto. But as well automotive and manufacturing companies such as General Electric. Companies that essentially took out a lot of patents. And of course, then there were the cultural industries. So the movie industry for example where obviously the United States had a lot of important interests because of its very strong motion picture industry.

So there were a range of industries that came to understand that they would do better if they could strengthen their monopolies. It’s not that they didn’t already have intellectual property rights. They did. But what they wanted was to strengthen them far more. They essentially wanted to turn knowledge which is a public good into a private good. It’s a kind of simple but powerful idea.

A way to think about it is say look knowledge is inherently a public good. Knowledge basically just diffuses throughout the world. It has for most of human history. The reason we have the equality in the world that we do is because knowledge has moved around. People have learned how to do things from other people.

So TRIPS was really about eliminating competitors. So for example, the Indian generic industry was able to manufacture high quality products that people all around the world benefited from. So the idea that the US pharmaceutical industry had was that it could use TRIPS to impose product patents on Indian pharmaceutical manufacturers. The motion picture industry saw a way of strengthening copyright. And very importantly the big advantage of sticking intellectual property rights into a trade agreement was that the GATT or the WTO as we now know it had an enforcement mechanism. So that you basically had a means of enforcing these rights if countries did not comply with the standards. That was the real power behind the idea. That you basically could retaliate against countries using your trade defense tools. Whatever they happen to be.

FRIES: So US corporate leaders were the key players?