Susan K. Sell 1995 IP Protection

Intellectual Property Protection and Antitrust in the Developing World: Crisis, Coercion, and
Choice
Author(s): Susan K. Sell
Source: International Organization, Vol. 49, No. 2 (Spring, 1995), pp. 315-349
Published by: The MIT Press
Stable URL: http://www.jstor.org/stable/2706974 .
Accessed: 17/06/2014 15:49
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.
The MIT Press is collaborating with JSTOR to digitize, preserve and extend access to International
Organization.
http://www.jstor.org
This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

All use subject to JSTOR Terms and Conditions
Intellectualproperty protectionand
antitrustin thedevelopingworld:
crisis,coercion,and choice
Susan K. Sell
The nations of the developingworld have made a dramaticturn toward

market-oriented policies. As recentlyas 1985,developingcountrieswere still
pressingfora new internationaleconomicorder (NIEO) based on economic
nationalismand the rejectionof global liberalism.Yet, today even the most
ardentformerchampionsof extensivestateintervention in theeconomyand of
discrimination againstforeigninvestorshave adopted policies thatemphasize
private-sectorinitiative,nondiscrimination, and economic openness. What
accountsforthischangein policy?Have thesecountrieschangedtheirmindsor
just their policies? These are the questions addressed here, with specific
referenceto intellectualproperty(i.e., patentsand copyrights)protectionand
antitrustpolicy.
This analysisof intellectualpropertyprotectionand antitrustpolicyin the
developingworldsuggeststhe usefulnessof decomposingthe broad issue of
economicliberalizationto accountforvariationacrossissue-areas.Despite the
factthatdevelopingcountriesare increasingly embracinga marketorientation,
the process of economic reformdiffersbetween the areas of intellectual
property,on the one hand, and antitrustpolicy on the other. A nuanced
analysisof the impactof bothpowerand ideas is necessaryto accountforthe
differences.
Two perspectivesin international relationstheory,neorealismand interpre-
tivistneoliberalism,offerdifferentexplanationsforpolicychange.Neorealism
emphasizes the role of power and leads us to expect that weak states will
complywith the preferencesof powerfulstates. By contrast,interpretivist
annual meetingof the

An earlier versionof this articlewas presented at the eighty-ninth
AmericanPoliticalScience Associationin Washington,D.C., 2-5 September1993. I thankVinod
Aggarwal,Marshall Alcorn, Alasdair Bowie, Martha Finnemore,Arjo Klamer, Jim Lebovic,
Sharon Lockwood,HenryNau, JohnOdell, Wayne Sandholtz,Lee Sigelman,Danny Unger,and
the anonymousreviewersfor IntemationalOrganizationfor theirhelpfulcommentson earlier
drafts.Tim Piroprovidedexcellentresearchassistance.
49, 2, Spring1995,pp. 315-49

IntemationalOrganization
? 1995 byThe 10 Foundationand the MassachusettsInstituteof Technology

316 InternationalOrganization
neoliberalismexaminesthe role of learningand normsas sources of change

and focusesmoresquarelyon the redefinition of nationalinterests.Both types
of analysiscan accommodate the role of internationalinstitutions.In the
rationalistneorealistvariant,institutions can alterthe incentivesfacingstates
and can playan importantrole in enhancingthe credibility of commitments as
well as reducingthe incidence of cheatingby monitoringcompliance. For
interpretivistneoliberals,institutionscan play a moretransformative role and
help states to redefinetheir interestsby spreadingnew norms and value
orientations.Accordingto JohnIkenberryand Charles Kupchan, normsare
''generalprinciplesupon whicha certainvisionof international orderis based.
Value orientationsare norm-basedattitudestowardspecificpolicyissues and
typesofbehavior."1In bothissue-areastheoverriding interestis prosperity;the
norm is liberalism.The value orientationsof the two are competitionin
antitrust policyand propertyrightsin intellectualproperty protection.
At the outset,I want to emphasizethatthe distinctionbetweenpowerand
learningis hardlyblack and white.Both are presentin these two issues. The
line betweenlearningand "being taughta lesson" can be veryfineindeed.2
Externalpressurecan be used byelitesin targetedstatesto achievecoalitional
realignments or to pushthroughpainfulreforms thattheelitesdeem necessary.
When elites redefinetheirinterests,to promoteliberalizationfor example,
externalpressurecan often provide a convenientboost for them to move
againstdomesticopposition.However,withthesole exceptionofMexico,there
is as yetno strongdomesticconstituency forintellectualpropertyprotectionin
developingcountries.Therefore,I argue not thatone perspectiveis rightand
the otherwrongbut ratherindicatewhat aspects of each case the different
perspectiveshelp to explain. On balance, neoliberalismprovides a more
thoroughaccount of the changes in antitrustpolicy, whereas neorealism
providesa betteraccountingof thechangesin intellectualpropertyprotection.
In the intellectualpropertycase, learningon the partof U.S. policymakers
was importantin the adoption of a coercive strategyto force recalcitrant
countriesto pass laws strengthening the protectionof intellectualproperty.
Once the UnitedStates adopted a coercivestrategy, thiscase is best explained
byexternalcoercion,as the UnitedStates has aggressively linkedhigherlevels
of protectionto trade issues throughSection 301 of the U.S. Trade Act. The
United States has applied significantdirectpressureon targetedstates.These
statesare highlydependenton access to the U.S. marketand are, therefore,
vulnerableto U.S. threatsof trade sanctions.Examiningthe effectsof this
coercivestrategy suggeststhatexplanationsbased on powercan accountforthe
1. G. JohnIkenberryand Charles Kupchan, "Socialization and Hegemonic Power," Intema-

44 (Summer1990),pp. 283-315.The quotationis drawnfromp. 285 fn.3.
tionalOrganization
2. This phrase is adapted fromcommentsby Marshall Alcorn at a seminar entitled"The
Rhetoricof Disciplined Inquiry,"George WashingtonUniversity, Washington,D.C., 9 October
1993.

IntellectualProperty 317
substance,timing,and adoption of policies protectingintellectualproperty.

However,thiscase also revealsthelimitsof a coercivestrategy; weak statescan
resistexternalthreatseven at substantialcosts to themselves.In nearlyevery
instance,targetedstateshave chosennot to implementand enforcethesenew
policies. In short,targetedcountrieshave changedtheirpoliciesbut not their
minds.If targetedcountriesdo not accept the value orientationpreferredby
the powerfulstate,and no politicallyinfluentialdomesticconstituency favors
the new policies, one can expect nonimplementation and robust domestic
resistance.
By contrast,in the antitrust case no countryhas employedan overtcoercive
strategy.Pressure for change has come fromwithinthe developingcountries
themselves.General externalpressureformarket-oriented reformis certainly
present in the form of the InternationalMonetary Fund's conditionalitypolicy
and the WorldBank's structuraladjustmentlendingprogram.However,these
two institutions have not pushed antitrustpolicies because theireconomists
argue that importliberalizationwill achieve the efficiencygoals of such
policies.3Whileimplementation has proceededslowly,and itis as yettoo early
to make sweepinggeneralizations, evidencesuggeststhatdevelopingcountries
have changedtheirminds,not onlytheirpolicies. Evidence thatthese states
have accepted the value orientationof antitrustincludes: the emergenceof
politicallypowerfuldomestic constituenciesfavoringthe new policies; the
sequence of policychange (norm change priorto policyadoption); and the
voluntaryand activequest forinformation and assistancein draftinglaws and
trainingofficials to administerthenewpolicies.The economiccrisisoftheearly
1980shelpedto resuscitatethemoribundUnitedNationsConferenceon Trade
and Development(UNCTAD) restrictive businesspractices(RBP) code. In
December 1980 the United Nations General Assemblyunanimouslyadopted
the Set of MutuallyAgreed Equitable Principlesand Rules forthe Controlof
RestrictiveBusinessPractices(RBP set). Under itsterms,an intergovernmen-
tal groupof experts(IGE) is chargedwithimplementing and interpretingthe
provisionstherein.Althoughthe IGE has no enforcement powers,itsmandate
is to providea forumforconsultationand discussionofnationaland legislative
experience.4This institutionalmechanismhas played an importantrole in
expeditingthe adoption of antitrustpolicies in developingcountries.Since
3. See Clive Gray,"Antitrustas a Componentof Policy Reform:What Role forDeveloping

Countries?" in Dwight Perkins and Michael Roemer, eds., Reforming Economic Systemsin
DevelopingCountries(Cambridge,Mass.: HarvardInstituteforInternationalDevelopment,1991),
pp. 403-40; WorldBank,Korea:ManagingtheIndustrialTransition, vol. 1, The ConductofIndustrial
Policy (Washington,D.C.: World Bank, 1987), p. 74; and World Bank, Korea: Managingthe
IndustrialTransition, vol. 2, SelectedTopics and Case Studies(Washington,D.C.: World Bank,
1987),pp. 34, 80, and 88.
4. United NationsGeneral Assembly,"The Set of Multilaterally AgreedEquitablePrinciplesand
Rulesfor the Controlof Restrictive BusinessPractices,"TD/RBP/CONF/10/Rev. 1 (New York:
UnitedNations,1981).

1989, developingcountrieshave been flockingto UNCTAD to learn more

about the operationof antitrustpolicies. The antitrustcase revealsa process
that has been more gradual, circuitous,and more dependent on domestic
circumstances withindevelopingcountries.The neoliberalemphasison choice,
learning, and the role of internationalinstitutionscan account for the
substance,adoption,and implementation of these policies.Howeverit cannot
account for the timingof the change; in this regard neorealism,with its
emphasison constraints facingweak states,offersinsights.
These two cases highlightthe usefulnessof movingbeyond the debate
betweenrationalistneorealismand interpretivist neoliberalism.Whileitseems
fairlyobvious thatcoercionis unnecessaryif stateshave accepted the norms
and value orientationsat issue, less obvious are the conditionsunderwhich
coercionby the strongerpartyfails to yield the desired results.The United
States has investedenormous amounts of time and energyin its coercive
strategyand has thusfarhad verylittleto show forit in intellectualproperty
protection.I am not claimingthatcoercionneverworks,but thatit largelyhas
failed in intellectualpropertyprotection.Furthermore, the prospectsforthe
sustainabilityofthenewpoliciesseem to be muchbetterin thearea ofantitrust
policy,in thatthenewpoliciesare a productofthesestates'redefinedinterests.
Since the mid-1980s,developingcountrieshave been adoptinglaws and
policies for the protectionof intellectualpropertybased on a conception
commonto the industrializedworld-namely,intellectualpropertyas private
property.Because the effectiveprotectionof private propertyrightsis a
cornerstoneof a liberal economic order, these new policies reflectthe
developingcountries'shifttoward a marketeconomy.Intellectualproperty
protectionis importantforboth internationalinvestment and trade.Investors
are reluctantto build plants or issue licenses in countries where their
technologyand know-howare not protected. Exporters of products or
processesbased on intellectualproperty seek to recovercostsofdevelopingthe
property and to preventcounterfeitingand piracy.In thepast,manydeveloping
countriesrefusedto issue patentsto foreigninventorsbecause patentprotec-
tion provides a temporarymonopoly and raises the prices of protected
property.Other developingcountriesdid offerprotection,but on a relatively
limitedbasis. Indeed, duringthe NIEO era, developingcountriesrejectedthe
notion that intellectualpropertyshould be construedas privateproperty.
Instead,theyargued thatintellectualpropertyshould be transferred withno
remittancebecause it was the "common heritageof mankind."Their new
policies of protectingintellectualpropertyas privateand commercialreverse
thisconception.
Similarly, policydevelopingcountriesare beginningto
in thearea ofantitrust
adopt laws and policiesthatresemblethoseof the industrializedworld.In the
past,the fewdevelopingcountriesthathad antitrust laws exclusivelytargeted
local subsidiariesof foreign-basedmultinationalcorporationsin the serviceof
economicnationalism.Instead of usingantitrust policiesto promotedomestic

marketcompetition,these countrieshad employedthem to controlforeign

enterprises'activities.More recently,developing countries have come to
perceiveantitrustpolicies as relevantfortheirown domesticenterprisesand
are designingpoliciesto breakup domesticpublicmonopoliesthatare a legacy
of previouseras of economicnationalism.The adoptionof antitrust legislation
and policies and the creationof domesticinstitutions to monitorand enforce
such policies will become increasingly importantas these countriescontinue
openingtheirmarketsand stimulating activity.
private-sector
The two cases warrantcomparisonbecause the participantsin the NIEO
negotiationssaw both issues as componentsof an integratedassault on
economicliberalism.Developingcountriessoughtchangesin prevailingmodes
of both antitrustpolicyand intellectualpropertyprotectionas part of their
quest fora newinternational and technologicalorder.In theantitrust
scientific
area, they sought to eliminate technology-transfer contract clauses that
restrictedtheirabilityto use the technologyto become moreself-sufficient. In
thearea ofintellectualproperty, theysoughtto weakeninternational standards
of protectionto gain access to technologieswithoutpayingroyaltyfees to the
holders of intellectualproperty.Indeed, the strategicincentivesin each
issue-area are different.Free ridingon others' intellectualpropertyis an
attractiveoption; the widespread piracyof patented goods underscoresthe
point.In cases inwhichridingfreeis themostattractive option,thosewho seek
to preventitfacetheburdenofchangingthepayoffs. Here neorealismprovides
compellinginsights;in particular,the incentivesto forgofreeridingmustbe
suppliedfromtheoutside.5
Bycontrast,antitrust policiesreducedomesticmonopolypowerand can help
stimulateforeigninvestmentand the importationof foreigngoods. These
policiesreduce pricesforconsumers,whereasintellectualpropertyprotection
tends to increase prices of desired goods. Once developingcountriesbegan
movingtowardmarket-oriented policiestheyhad economicincentivesto adopt
antitrustpolicies. The incentivesare inherentin antitrustpolicies since such
policiescan promoteefficiency gains.These gainscan accrueto thedeveloping
countries,as opposed to theforeignholdersofintellectualpropertyrights.The
movementtowardantitrustpolicyis beingnegotiatedmuchmore palpablyin
thedomesticarena.6Previouslyprivilegeddomesticgroups,suchas thechaebol
(conglomerates)in South Korea, have marshaledtheirenormouspower to
block antitrustlegislation.The winnersunder the old policies stand to lose
5. As Lisa Martinarguesin CoerciveCooperation(Princeton,N.J.:PrincetonUniversity Press,

1992),such incentivesmaybe suppliedbyeitherhegemonicpoweror institutions. However,in the
playeda minimalrole in providingincentives
intellectualpropertycase, internationalinstitutions
fordevelopingcountriesto changetheirpoliciesof lax protection.
6. Particularlyin South Korea and Taiwan, antitrustpolicies have become a potentpolitical
weapon in the handsof democraticreformers. in Korea and Taiwan:
See Susan K. Sell, "Antitrust
The Link Between Politicsand Money in the Contextof Democratization,"preparedforannual
meetingoftheAmericanPoliticalScience Association,New York,1-4 September1994.In thetext
thatfollows,theterms"Korea" and "Korean" referto SouthKorea.

underthe new policies;but theirpoweris beginningto erode underpressures

forsocial change and the leadershipof bold reformers. Domestic constituen-
cies forantitrustlegislationare emergingin developingcountriesin thecontext
of democratizationand economicreform.Populistaspects of antitrustpolicy,
suchas protecting consumers,promotingsmall-and medium-sizedenterprises,
and recastinggovernment-business relationsare becomingimportant weapons
in anticorruption battlesand in changingthe domesticbalance ofpowerwithin
thestatein favoroftheurbanmiddleclass. Reformershave significant political
incentivesto promoteantitrustpolicies.Under conditionsin whichincentives
are built-in,such as in antitrustpolicy, neoliberalismprovides a more
compellingexplanation.Finally,thefactthattheNIEO negotiatorsthemselves
saw the issues as componentsof an integratedassault on economicliberalism
suggeststhe usefulnessof comparingthe two cases and providesinsightsinto
the prospectivefates of these policies in a markedlychanged international
economicenvironment.
This articleproceeds in four sections.The firstexaminesthe role of the
economic crisis of the 1980s. The next two sections analyze trends in
intellectualpropertyprotectionand antitrustpolicy,respectively. The fourth
sectionpresentsconclusionsabout these cases and suggestsfurtherresearch
based on thisanalysis.
Economic crisis
The economic downturnthat began in the late 1970s and progressively

worsenedin the 1980s heightenedpowerdifferentials betweenthe industrial-
ized and the developingcountries.Bank lending to developing countries
droppedsharplyin the early1980s.The resultingscarcityof externalfinancing
in the formof privatebank loans was accompaniedby a sharpdrop in foreign
directinvestment in developingcountries.Between 1981 and 1986,inflowsof
foreigndirectinvestment droppedbynearly25 percent.7Higheroil priceshurt
non-oil-exportingdevelopingcountries,and manydevelopingcountrieswere
saddled withhuge foreigndebts. This bleak situationwas exacerbatedby a
resurgencein tradeprotectionand a drop in commodity prices.The euphoria
of the NIEO gave way to a landscape of sharplyreduced opportunities,and
developingcountriesscrambled to adjust to this less hospitable economic
environment.The consensus that had been so crucial to the developing
countries'multilateral
NIEO agenda was shattered.Developingcountrieswere
far more vulnerableto these economic shocks than were the industrialized
countries.For example,in 1982Mexico announcedthatitwas no longerable to
serviceitsdebt.
These economicshocksprompteddevelopingcountriesto adoptpoliciesthat
promotedtheirintegration intotheglobal economy.Even a casual observerof
7. Manuel Agosin and David Gold, "Recent Trends in FDI and Related ActivitiesbyTNCs,"
TheCTC Reporter,
no. 21, Spring1986,p. 21.

currenttrendsin developingcountriesmustbe struckbytheextentto whichthe

policies have come to resemblethe wishes of the United States and other
wealthyindustrialized countries.Throughoutthepostwarera theUnitedStates
consistentlyarguedthatthe road to developmentis paved by the freeplayof
marketforces and repeatedlyurged the developingworld to adopt liberal
economicpolicies. Thus, to the extentthatdevelopingcountriesare opening
theirmarkets,liberalizingtrade and investment, adoptingstrongerpolicies to
protectintellectualpropertyrights,privatizingpublic-sectorenterprises,and
embracingmarketmechanisms,they are "doing the rightthing" fromthe
vantagepointoftheUnitedStates.
The economiccrisisof the 1980s was an internationalconstraintto which
states had to respond. Clearly constraintsmatter,but responses to those
constraintsdepend on choice. Whatwere themoreproximatecauses forthese
policychanges? Why,forexample,did theywait nearlya decade to use the
machineryestablishedfor antitrustto facilitatethe adoption of
institutional
new policies?Bywhatmechanismsdid thesechangescome about? Whatwere
the sources of these new policies? In short,the economiccrisisof the early
1980swas a facilitatingconditionforthepolicychange.Yet it is insufficient
for
understanding the precisetimingof the changes,the sourcesof the substance
of the new policies, and the mechanismsthroughwhichthese changes came
about. We need to look elsewhere to understandwhy the effectsof the
economiccrisisplayedout as theydid.
Intellectualpropertyprotection:coercionand its limits
The most importantfactor in the recent spread of intellectualproperty

protectionpolicieshas been coercion;theUnitedStateshas applied significant
pressure on developing countries to offerstrongerintellectualproperty
protection.But the ensuinganalysisrevealsthatthiscoercivestrategy has had
has soughtto strengthen
quite limitedresults.The United States consistently
intellectualpropertyprotectionabroad. Throughoutthe 1960s and 1970s,its
effortsat exhortationin various multilateralforums,includingthe World
IntellectualPropertyOrganizationand UNCTAD, produced paltryresults.
Beginningin the early1980s,at the behestofvariousU.S. corporateinterests,
theUnitedStatesachievedquickresultsthroughitsbilateralconsultations with
Hungary,Singapore,SouthKorea, and Taiwan.8Throughtheseearlysuccesses
8. Industryassociationsin service,investment,
high-technology, chemical,pharma-
agricultural
ceutical, and entertainmentsectors lobbied Congress for more effectiveintellectualproperty
protectionabroad. Amongthe mostactivegroupswere the Associationsof: the Pharmaceutical
Manufacturers;the ChemicalManufacturers;the SemiconductorIndustry;and the International
IntellectualPropertyAlliance (an umbrellaorganizationof eighttrade associations:American
Publishers,Inc.; AmericanFilmMarketing;Data Processingand ServiceOrganizations;Computer

the U.S. government learned that exhortationalone was ineffective, but that
linkingtrade and intellectualpropertyprotectioncould yield the desired
results.Americanpolicymakers learnedthroughsystematic bilateralconsulta-
tionsthata coercivestrategy was morepromising.The UnitedStatestightened
thislinkagebetweentradeand intellectualproperty throughitsamendmentsto
theTrade and TariffAct in 1984 and again in 1988. It now can swiftly retaliate
with trade sanctionsin the event that targetedcountriesfail adequately to
protectitsintellectualproperty.
The linkbetweenU.S. powerand themovetowardthemarketbydeveloping
countriesis the U.S. abilityto exploitthevulnerability of targetedstates.The
United States possesses considerablemarketpower, and access to the U.S.
marketis criticalformanydevelopingcountries.In responseto the economic
crisisof the early 1980s, developingcountriesincreasinglyhave tipped the
balance away from import-substituting industrializationtoward export-led
strategies.The debt crisis,the perceived exhaustionof models of import-
substituting industrialization,and the success of the East Asian countriesall
have contributed to thisexport-ledshift.Therefore,access to northern markets
has become moreimportant.
Tables 1-4 illustratethe extentof targeteddevelopingcountries'vulnerabil-
ity to U.S. trade threats.Table 1 shows the value of selected developing
countries'exportsas a percentageof theirgross domesticproduct (GDP)
between 1982 and 1992. Table 2 shows the dollar value of these countries'
exportsto the United States. Table 3 indicates the percentageof selected
developingcountries'trade conductedwiththe United States. Withthe lone
exceptionof China,the United States is the largestimporterforeach of these
countries'goods. By contrast,as illustratedin Table 4, onlytwoof thetargeted
states,Mexico and South Korea, rankin the top ten tradingpartnersforthe
UnitedStates(rankedthirdand sixth,respectively). Therefore,thesecountries
are farmoredependenton tradewiththeUnitedStatesthantheUnitedStates
is on them.Bythemid-1980s,theU.S. marketabsorbedmorethanhalfofLatin
Americanexportsand one-thirdof exportsfromEast Asia. Thus, the United
States has significant potentialleverageover these countries.As Alan Sykes
pointsout, "If access to the U.S. marketis restricted,the targetnationcannot
readilymakeup thelosses byredirecting itsexports."9
The United States has wielded itsmarketpowerthroughSection301 of the
Trade Act, which allows it to threaten trade retaliationfor inadequate
intellectualpropertyprotectionto induce policychanges in targetedstates.
Softwareand ServicesIndustry;Business SoftwareAlliance; Computerand Business Equipment

Manufacturers;National Music Publishers;the Recording Industryof America; and Motion
PictureAssociationofAmerica).
9. See p. 282 of Alan 0. Sykes,"ConstructiveUnilateralThreatsin InternationalCommercial
Relations:The LimitedCase forSection301," Law and PolicyinIntemational Business,vol. 23, no.
2, 1992,pp. 263-330.

Section301 oftheTrade Act of 1974givesthePresidentpowerto enforceU.S.

rightsunder trade agreementsor to eliminate policies and practices that
discriminateor impose unjustifiable burdenson U.S. commerce.The act also
permitsindustries,tradeassociations,and individualcompaniesto petitionthe
United States Trade Representative(USTR) to investigateactionsof foreign
governments. If the USTR decides to investigate, the firststep is consultation
withthe foreigngovernment to tryto resolvethe problem.If these efforts fail,
withina year (in all but subsidies cases, forwhicha shortertime period is
mandated) the USTR recommendsappropriateaction to the President.This
appropriateactionoftenconsistsofthethreatofretaliationvia tradesanctions.
Afterpressurefromthe privatesector,the United States also linkedgeneral-
ized systemof preferences(GSP) benefits,whichgrantpreferentialmarket
access for developingcountries,to the effectiveprotectionof intellectual
property.
Section 301 cases
In a comprehensiveanalysisof the U.S. recordin Section301 actions,Sykes

foundthat"Section 301 is fairlysuccessfulin inducingforeigngovernments to
modifytheirpracticeswhentheyare accused ofviolatingU.S. legal rights;...
successis morelikelywitha GSP beneficiary."'10Table 5 providesa summary of
the Section301 cases in whichintellectualpropertyissueswere at stake.In all
eightcases, the targetedgovernments agreed to improveintellectualproperty
protectionalong the lines desired by the United States. Furthermore,the
timingof the changes demonstratesthe stronglink betweenthis exerciseof
U.S. leverageand the changesin targetedstates.In short,both the substance
and thetimingof thesepoliciescan be explainedas a productofcoercion.The
detailed examinationof a numberof Section 301 cases against developing
countriesbelow illustratesthe relationshipbetweenthe substanceand timing
of policychange in targetedstates,on the one hand, and the exerciseof U.S.
coercion,on theother.
However, as the followingcases demonstrate,there is a sharp disparity
betweenthe adoptionof thesepolicies and theirimplementation and enforce-
ment. While developing countrieshave acquiesced in a formal sense by
adoptingnewlaws and policies,theyhave resistedimplementing and enforcing
thesepolicies.This discrepancybetweenpolicyadoptionand implementation
underscoresthefactthatdevelopingcountriesare actingunderduressbut are
notconverts.
In the 1985intellectualpropertyrightscase againstSouthKorea, theKorean
governmentacquiesced in 1986 by enactingproduct patent protectionfor
10. Sykes,"ConstructiveUnilateralThreatsin InternationalCommercialRelations,"p. 313.

servicesas a percentage
TABLE 1. Exportsofgoods and nonfactor
ofgrossdomestic
product
Country 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
Argentina 10.9 8.9 8.2 11.4 8.0 7.5 8.8 15.3 10.5 7.6 6.3
Brazil 7.9 12.0 14.5 12.4 9.0 9.5 10.9 8.4 7.2 8.5 -a
Chile 19.1 23.4 22.5 28.1 31.1 33.3 37.4 37.9 37.1 35.7 33.1
China (PRC) 10.5 9.7 11.0 11.8 13.0 15.6 14.5 13.7 19.0 21.9
India 6.5 6.4 6.6 6.1 5.8 5.9 6.1 7.2 -
Mexico 15.0 18.2 17.1 14.9 16.9 19.7 16.9 15.9 15.7 14.0
SouthKorea (ROK) 37.0 36.1 36.4 34.5 38.5 41.8 39.6 33.7 30.4 28.8 29.6
Thailand 24.0 20.6 22.6 24.4 26.7 30.1 34.3 36.6 36.5
aDash = data notavailable.

Source.InternationalMonetaryFund,Intemational Yearbook,vol. 46,
FinancialStatistics
(Washington,D.C.: InternationalMonetaryFund, 1993), pp. 136-37.
TABLE 2. to theUnitedStates(in thousandsof U.S. dollars)

Valueofexports
Country 1987 1988 1989 1990 1991
Argentina 930,599 1,217,212 1,185,397 1,698,931 a
Brazil 7,183,143 8,388,319 7,744,372 7,459,893 6,387,483

Chile 965,950 1,242,356 1,363,786 1,340,910 1,267,571
China (PRC) 3,020,413 3,357,938 4,404,887 5,175,334 6,147,516
India 2,252,391 2,556,216 2,643,570
Mexico 13,265,079 13,453,232 16,091,910 18,834,135 18,951,857
SouthKorea 18,362,736 21,477,257 20,694,317 19,419,654 18,607,413
Thailand 1,734,490 2,545,959 3,419,008 3,968,018 5,132,831
aDash = data notavailable.

Source.UnitedNations,1991 IntemationalTradeStatistics Yearbook,vol. 1, TradebyCountry
(New York: UnitedNations,1993), pp. 24, 102,162, 170,420, 498, 580, and 866.
pharmaceuticalsand improvingenforcementprocedures.Accordingto the

presidentoftheU.S.-basedPharmaceuticalsManufacturing Association(PMA),
Gerald Mossinghoff,"The Korean case was a major step forwardand set an
of
importantexample what could be accomplishedusingtrade instruments to

TABLE 3. oftradeconductedwiththeUnitedStates
Percentage
Country
(rank) 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
Argentina(1)a 13.4 9.9 10.8 12.2 10.3 14.6 13.3 12.4 13.8 b
Brazil (1) 20.5 23.1 28.6 27.2 25.8 27.4 24.8 22.5 23.7 20.2
Chile (1) 19.3 26.1 24.6 21.8 20.1 19.9 18.3 17.0 16.2 14.8
China (3) 8.0 7.8 9.3 8.6 8.5 7.7 7.1 8.4 8.3 8.6
India (1) 9.2 15.0 15.0 18.1 18.7 18.6 18.4 - 14.7
Mexico (1) 50.7 62.9 62.4 65.1 72.0 64.6 65.9 70.0 70.2 69.7
SouthKorea (1) 28.6 33.9 36.0 35.6 40.1 38.9 35.4 33.2 30.0 26.0
Thailand (1) 12.8 15.0 17.2 19.7 18.1 18.6 20.1 21.6 22.7 21.3
aRankof theUnited States as a tradingpartner,based on 1991figures,is shownwithinparen-

theses.
bDash = data not available.
Source.United Nations,1991 International Yearbook,vol. 1, TradebyCountry
TradeStatistics
(New York: UnitedNations,1993),pp. 24, 102, 162,170,420, 498, 580, and 866.
TABLE 4. Valueof U.S. exports countries

in selecteddeveloping
(in thousandsof U.S. dollars)
Country
(rank)a 1987 1988 1989 1990 1991
Mexico (3) 14,572,859 20,621,656 24,843,516 28,245,178 33,143,982

SouthKorea (6) 7,660,050 10,669,469 13,469,690 14,393,889 15,496,451
China 3,488,357 4,956,696 5,806,829 4,805,549 6,278,071
Brazil 3,998,894 4,247,215 4,798,002 5,061,527 6,147,835
Thailand 1,481,938 1,682,717 2,291,224 2,991,110 3,752,521
India 1,457,516 2,482,114 2,462,499 2,485,815 1,997,630
Chile 796,155 1,064,599 1,410,753 1,672,267 1,838,996
Argentina 1,088,909 1,054,663 1,036,744 1,179,126 2,044,691
aRankofcountryas a U.S. tradingpartneris includedifcountryis amongthe top tenpartners.

TradeStatistics
Source.United Nations,1991 International Yearbook,vol. 1, TradebyCountry
(New York: UnitedNations,1993), p. 940.

TABLE 5. U.S. e-xperience cases underSection301

withintellectualproperty
oftheTradeAct of1974
Yearcase
Year terminated GSP
Case no. Country Area filed orsuspended beneficiary
301-49 Brazil Informatics 1985 1989 Yes

301-52 SouthKorea Intellectualpropertyrights 1985 Open Yes
301-61 Brazil Pharmaceuticalpatents 1987 1989 Yes
301-68 Argentina Pharmaceuticalpatents 1988 1989 Yes
301-82 Thailand Copyright
enforcement 1990 1991 Yes
301-84 Thailand Patentprotection 1991 Open Yes
301-85 India Intellectualpropertypro- 1991 Open Yes
tection
301-86 China (PRC) Intellectualpropertypro- 1991 1992 No
tection
Source.Adapted fromAlan 0. Sykes,"ConstructiveUnilateralThreatsin InternationalCom-

mercialRelations:The LimitedCase forSection301," Law and Policyin Intemational
Business,
vol. 23, no. 2, 1992,pp. 263-330.
achieve intellectualpropertyobjectives."'"The Korean case remainsopen

because theprivateactorswho have been monitoring Korean compliance-the
InternationalIntellectualPropertyAlliance and the PMA-have been disap-
pointed in Korea's performance.The pharmaceuticalmanufacturer Bristol-
MeyersSquibb CompanychargedKorean companieswithpiracyand in 1989
filednew Section 301 complaintswiththe USTR.12 As a result,Korea has
remainedon theUSTR's watchlistofintellectualproperty rightsviolators.The
U.S. Business SoftwareAlliance and the InternationalIntellectualProperty
Alliance also have closelymonitoredKorea's performance.In July1992, the
BusinessSoftwareAllianceestimatedthat86 percentofthepersonalcomputer
softwareused in Korea was pirated,accountingformore than $300 millionin
losses.13Despite thepassage oftheComputerProgramProtectionAct (CPAA)
in Korea in July1987,penaltiesforpiracyin Korea are stillrelatively
low; the
11. Gerald J.Mossinghoff, "For BetterInternationalProtection,"Les Nouvelles26 (June1991),

pp. 75-79 and p. 76 in particular.
12. Michael P. Ryan,"Strategyand CompliancewithBilateralTrade and Dispute Settlement
Agreements:USTR's Section 301 Experiencein the PacificBasin," MichiganJournalof Intema-
tionalLaw 12 (Summer1991),pp. 799-827 and p. 824 in particular.
13. "SoftwarePiracy:Self-DefensetheBest Choice forVictims,"BusinessInternational, vol. 24,
20 July1992,p. 250.

maximumfine for piracy is 3 millionwon (about $4,000).14The Business

SoftwareAlliance continuesto press foramendmentsto the CPAA to raise
penalties againstpiracy,and the InternationalIntellectualPropertyAlliance
has recommendedthatKorea remainon theSection301 watchlist.
The 1987 PMA-initiatedcase againstBrazil foritslack of patentprotection
for pharmaceuticalproductsis noteworthy because it is the only case that
resultedin traderetaliationbytheUnitedStatesunderSection301 provisions.
AfterBrazil refusedto alteritspolicy,the United Statesplaced a 100 percent
retaliatorytariff
(totaling$39 million)on importsofBrazilianpharmaceuticals,
paper products,and consumerelectronics.15 Brazil fileda General Agreement
on Tariffsand Trade complaintagainstU.S. traderetaliation,but it "withdrew
itscomplaintwhenthe sanctionswere dropped [in summer19901in exchange
forBrazil'spatentcommitments."'16 Then-PresidentFernandoCollorde Mello
proposed patentlegislationthatwould protectpharmaceuticalproductsand
processpatentsforthefirsttime.The patentreformpackage presentedto the
Brazilianlegislaturein May 1991"denies protectionto drugsthatare notmade
in Brazil, a provisionintended to force patent holders to manufactureor
license themlocally."'17These conditionsdo not satisfythe PMA, and it will
continue to monitorBrazil's approach. In the words of one transnational
corporationexecutive,"Brazil is lookingforsomethingto get it offthe hook
withthe US Trade Representative.But I'm not reallyoptimistic."18 The PMA
recommendedthat Brazil remain on the USTR watch list in 1992. A 1993
USTR investigation was terminatedin February1994 afterBrazil promised
USTR MickeyKantorthatit would enact a new patentlaw. However,in the
wake of the political scandals of the Collor administration,intellectual
property protectionhas been puton hold bytheBrazilianlegislature.Brazilian
and USTR negotiatorsmetfivetimesbetweenMay 1993 and February1994 to
discuss the possibilityof trade sanctionsfor Brazil's failureto protectU.S.
pharmaceuticalpatents.The 1991 patentbill had stillnot been passed, and
BrazilianSenatorJoseRicha indicatedthathe would notpressurethe Senate
to hurrypassage of a new law.19
In 1988, the PMA filed a petition against Argentina.In consultations
betweentheU.S. and Argentinegovernments, Argentinapledgedto strengthen
patentprotectionforpharmaceuticalsby 1992.The PMA subsequentlyagreed
14. Fred M. Gregurasand Moon Sung Lee, "SoftwareLicensingin Korea," Les Nouvelles27
(December 1992),pp. 215-19 and p. 217 in particular.
15. "DifferencesOver Code on Patents,"LatinAmericanRegionalReports-Brazil,RB-91-04,
(London: LatinAmericanNewsletters, 2 May 1991),p. 4.
16. Mossinghoff,"For BetterInternationalProtection,"p. 77.
17. John Pearson, "The Patent Pirates are Finally Walking the Plank," Business Week,
Industrial/Technologyed., 17 February1992,p. 127.
18. William Neuman, "IPR ProtectionImproves,but Reformsnot Uniform,"BusinessLatin
America,20 April1992,p. 127.
19. Scott Studebaker,"Brazil: ConstitutionalRevisionSession Floundering,"Latin American
Law and BusinessReport2 (April 1994),pp. 11-13 and p. 12 in particular.

to withdrawits Section301 petition.The ArgentineCongresswas considering

various proposals for strengthenedpharmaceuticalprotectionthat reflected
the U.S. demands yet quicklybackpedaled on the issue of pharmaceutical
patents.The Argentinegovernment's agencyin chargeof intellectualproperty
protectionarguedthata strongpatentlawwouldlead to higherdrugpricesand
fewerjobs. The Argentineassociationsrepresenting domesticpharmaceutical
producers(primarilypiratelaboratories)and distributors echoed these senti-
ments,citingthehighcostofhealthcare and specterofputtingtheiremployees
out of work.An officialfroma wholesale pharmaceuticaldistributors associa-
tion, Reftels, told U.S. negotiatorsthat, "there were no saints in this
issue-each side was simplyprotectingits own economicinterests."20 Argen-
tinahas remainedon U.S. watchlists,and in early1993 Argentinawas ranked
as the top Latin American violator of pharmaceuticalpatents "due to a
powerfulgroupof firmsdedicatedto copyingpatentsand sellingpirateddrugs
throughout Latin America."'21 The ArgentineCongressis likelyto waterdown
reformproposalsdue to strongdomesticopposition.
Similarly,Thailand agreed to improveitsintellectualpropertyprotectionin
responseto the 1990 Section301 filingoveritslax copyright enforcement. The
United States is Thailand's largestexportmarket,providingthe United States
with significantleverage. The USTR repeatedlyhas cited Thailand on its
prioritywatchlist,and in the 1991 patentprotectioncase Thailand indicated
thatit would considercomplianceand "is lookingto the resultsof the GATT
negotiationsfor possible guidance."22Therefore,that case remains open.
Intellectualpropertyprotectionhas placed Thai leaders in a difficult
position.
In 1987, Prime MinisterPrem Tinsulanond'sadministration was ousted in a
no-confidence motionafterattempting to strengthenThailand'scopyright laws.
Intellectualproperty in Thailandbecause piracyhas
protectionis controversial
become a lucrativebusiness there.The governmenthas a stronginterestin
protectingthe piracyindustry thatprovidesjobs in manufacturing as well as in
over 12,500retailshops.23The domesticpoliticalstakesare obviouslyhighso,
"Bangkok'sapproachhas been to compromisewhennecessarythenfailto put
the newlynegotiatedregulationsin place."24Thai CommerceMinisterSubin
PinkhayanrejectedU.S. offersto help draftlegislation,indicatingthatsuch an
actionwouldconstitutea breachofsovereignty.25 repeatedlyhave
Thai officials
complainedabout "the United States' tendencyto use its'economicmuscleto
20. MarketNotes,LatinAmericanLaw and BusinessReport1 (August1993),p. 32.

21. Helen J. Simon, "Unfair Practicesin the Spotlight,"BusinessLatin America,25 January
1993,pp. 6-7.
22. Mossinghoff, "For BetterInternationalProtection,"p. 76.
23. Chris Shore, "The Thai CopyrightCase and Possible Limitationsof Extraterritorial
Jurisdictionin ActionsTaken Under Section 301 of the Trade Act of 1974," Law and Policyin
InternationalBusiness,vol. 23, no. 3, 1992,pp. 725-48 and p. 729 in particular.
24. "Thai-U.S. Trade Relations Skate on Thin Ice over IP RightsInaction,"BusinessAsia, 13
November1989,pp. 371-72.
25. Ibid.,p. 372.

throwits weightaround and bully'its tradingpartners."26 The United States

has continuedto pressureThailand and has keptThailand on itspriority watch
listas an intellectualpropertyviolatorthrough1994.
The 1991 Indian intellectualpropertycase is stillopen. The United States
decided to delaytraderetaliationdue to progressin U.S.-Indian negotiations
over patent protection.Hamish McDonald, reportingin the Far Eastern
Economic Review,pointed out that "India has taken steps to meet foreign
concerns about enforcementof intellectualpropertyrightsunder existing
laws."27Beginningin 1991,PrimeMinisterP. NarasimhaRao implementeda
liberaleconomicreformpackage substantially relaxingconditionsforforeign
investment.India softenedits position against the inclusionof intellectual
propertyrightson the GATT agenda. India has taken steps to strengthen
protectionforcomputersoftware,videos,and filmsand has also improvedits
enforcement The BusinessSoftwareAlliance has extendeditsactivities
efforts.
to India and is keeping close watch on developmentsthere, particularly
regardingenforcement. Despite India's movesin the desiredU.S. direction,it
has remainedon theUSTR's watchlist.
The last Section 301 case listedin Table 5 concernedintellectualproperty
rightsin thePeople's Republic of China (PRC). Initiatedin 1991,thiscase has
been the subject of intensenegotiations.Trade linkagethus far has proven
effectiveonlyon paper. The PRC enacteditsfirstpatentlegislationin 1984,but
this legislationwas deemed inadequate by interestedparties in the United
States. Section 301 consultationsbetween the two countriesin August 1991
provedfrustrating, butthePRC promisedto resumediscussionsovercopyright
and patentprotectionin October of that same year. The value of the PRC's
exportsto theUnited Stateswas an estimated$18,969millionin 1991 and rose
to $25,729millionin 1992,so thethreatoftradesanctionswas palpable.28After
repeatedlythreateningto impose sanctions,the USTR formally withdrewits
Section 301 special investigation in January1992. As a resultof the negotia-
tions,thePRC agreedto enactnewlaws and regulationsto expandthescope of
protectionand to join two internationalcopyright conventionsbythe summer
of 1993.29 As did governmentsin the other cases, the Chinese government
superficiallycomplied,but its piracyactivitieshave continuedunabated. In
June1994,the United States designatedChina a Section 301 priority country
forcopyright violations;deputyUSTR Charlene Barshefsky noted thatwhile
China had "worldclass" laws to protectintellectualpropertyrights,theywere
26. Shore,"The Thai Copyright Case and PossibleLimitationsofExtraterritorial in

Jurisdiction
ActionsTaken Under Section301 oftheTrade Act of 1974,"p. 747 n. 108.
27. HamishMcDonald, "The Late Convert:India WinsReprievein PatentRow withU.S.," Far
EasternEconomicReview,5 December 1991,pp. 64-65. The quotationis fromp. 65.
28. Exportvalues are fromU.S. Bureau of the Census, Statistical
Abstractof theUnitedStates:
1993, 113thed. (Washington,D.C.: Bureau oftheCensus 1993),p. 813,table 1351.
29. Joseph T. Simone, Jr.,"ImprovingProtectionof IntellectualProperty,"China Business
Review19 (March/April1992),p. 9.

rarelyenforced.30 The piratingof music recorded on compact discs and of

computersoftwarecomprisetwolucrativeindustries. An estimated100percent
ofthecompactdiscsproducedand 95 percentof all thesoftwareused in China
are pirated; indeed, the Chinese governmenthelps the pirates by granting
importconcessionsformachineryneeded to produce compactdiscs.31In the
compactdisc case, the Chinese set up factoriesas joint ventureswithSouth
Korean and Taiwanese investorswho soughtpartnersamongrelativesof the
Chinese Communistparty;accordingto industryofficials,these connections
"mayexplainwhytherehas been so littlecopyright enforcement."32
The PMA also fileda Section301 petitionagainstChile forfailureto protect
pharmaceuticalpatents but withdrewafterconsultationswith the Chilean
government, whichpromisedto enacta pharmaceuticalpatentlaw bylate 1989.
Subsequently,severalpatentlaws were proposed,but the PMA rejectedthem
all as inadequate. Aftercontinuedbilateraldiscussions,Chile finallyenacted
an acceptable law, whichwentintoeffectin September1991 and forthe first
timeextendedpatentprotectionto pharmaceuticalproducts.The law guaran-
tees protectionforfifteenyears;the United States had requesteda twenty- to
twenty-five-year guarantee but agreed that Chile was moving in the right
direction.In 1993 and 1994 the United States continuedto pressureChile to
strengthenits copyrightprotection,due to rampant computer software,
videotape, and audiotape piracy.The United States also is distressedthat
Chilean law providesneithersemiconductor maskwork(the individualdesign
of a chip'slayers)nortradesecretprotection.33
GSP status
In its quest to secure more extensiveguaranteesof intellectualproperty
protection,the United States also has threateneda targetcountry'sstatusas a
GSP beneficiary. The 1974Trade and TariffAct includedintellectualproperty
protectionas a new criterionforextendingand/ormaintainingGSP benefits;
yetWashingtondid notpursuethisavenue untilthe late 1980safterconsistent
pressure from industryassociations. In three instances, involvingIndia,
Mexico,and Thailand,GSP benefitswere denied forfailureto enact adequate
patentprotection.In 1987,Mexicocontinueditsrefusalto pass pharmaceutical
productprotectionand lost $500 millionin GSP benefits.34 The USTR cited
Mexico again in 1989 underSection301,but droppedMexico fromthelistdue
to evidencethatMexicowas consideringmajorchangesin intellectualproperty
30. Philip Shenon,"Chinese Accused of PiratingDisks," New YorkTimes,18 August 1994,p.

Dl.
31. Ibid.
32. Ibid.,p. D17.
33. MarketNotes,LatinAmericanLaw and BusinessReport,vol. 2, no. 1,January1994,p. 31.
34. Figuresforboth the Mexican and Thai cases are fromMossinghoff, "For BetterInterna-
tionalProtection,"p. 76.

legislationin 1990. In 1989,the PMA fileda complaintagainstThailand,and

when Thailand failed to acquiesce it was denied its duty-free benefitsunder
GSP in the amountof $165 million.In both cases, the targetedgovernment
faced strongdomesticoppositionto greaterintellectualpropertyprotection
frompowerfullocal drug manufacturers and was concernedthat extending
pharmaceuticalproduct protectionwould lead to higherconsumerprices.
Under continuedpressurefromthePMA via the USTR, in February1992 the
Thai governmentapprovedamendmentsto its PatentsAct. The PMA is still
dissatisfiedbecause the new act does not offerpipelineprotection(thatis, for
inventedbut not yet marketedproducts) nor does it eliminatecompulsory
licensing.35The Thai governmentcannot make furtherconcessionswithout
placing itself in a precarious position; the GovernmentPharmaceutical
Organizationdominatesthe local Thai drugindustry and benefitsfrompiracy,
so pharmaceuticalpatentsare a particularlysensitiveissue. In 1992,India lost
$80 million in GSP benefitsover itsweak of
protection pharmaceuticals.
An especiallysharp reversalfrompast policies of economic nationalism
currently is under way in Mexico. This case differsfromthe othersbecause
Mexico appears to have redefineditsinterestsand decided thatthebenefitsof
intellectualpropertyprotectionoutweighits costs. Mexico's extremetrade
dependenceon itgivestheUnitedStatesextraleverage,butin thepast Mexico
has successfullyresistedU.S. pressure.Manyfactorsare at work,includingthe
Mexican decision to join the GATT in 1986; the change in leadershipthat
broughtPresidentCarlos Salinas de Gortarito powerbya narrowmargin(50.7
percentofthevote) in December 1988;Mexico'splacementon USTR's priority
watchlist;and Mexico's eagernessto participatein the NorthAmericanFree
Trade Agreement(NAFTA). The factthattheSalinas administration initiated
the Mexican-U.S. NAFTA talks suggeststhat Mexico was motivatedby the
incentivesthat such an agreementmightbring. In other words, Mexico's
changed behavior is due to the high value it now places on international
institutions,suchas NAFTA.36
The Mexicangovernment also announcedthe Programof Modernizationof
Industryand ForeignTrade 1990-1994,whichexplicitly stateditscommitment
to strongerintellectualpropertyprotection.The connectionbetweenSection
301 pressure and the Mexican response was clear, as the United States
immediatelytook Mexico offthe priority watchlist.On 28 June1991 Mexico
enacted a new industrialpropertylaw thatrepresenteda markedreversalof
past policies. The new Mexican law for the firsttime extended patent
developingcountrieshave favoredthe use of exclusivecompulsory

35. Traditionally, licensesin
cases in whichthe patentee fails to exploitcommerciallythe patent in the developingcountry.
Under exclusivecompulsorylicenses,the patentrightsare transferred to local parties.As Pfanner
pointsout,"whenan exclusivelicenseis granted,the patentowneris excludedfromusinghis own
invention."See Klaus Pfanner,"CompulsoryLicensingof Patents:Surveyand CurrentTrends,"
SartryckurNIR NordisktImmateriellt doc. 1 NIR 1/85,p. 5.
Rattsskydd,
36. This pointwas suggestedbyan anonymousreviewerforInternational Organization.

protectionto chemical, pharmaceutical,agrichemical,and biotechnology

products.The law also includedprovisionsforthe protectionof trade secrets
(which had never been protected by Mexican law), stipulated that the
importation of patentedgoods would constitute"working"the invention(that
is, themakingof theproductthatembodiesthe inventionor the makingof the
patentedprocess), and virtuallyeliminatedthe groundsforgrantingcompul-
sorylicenses.37Accordingto Mike Privatera,the publicaffairsdirectorforthe
U.S.-based pharmaceuticalmanufacturer PfizerInc., "The Mexicans gave us
everything we wanted."38
These Section 301 and GSP cases demonstratethat the U.S. strategyhas
been largelysuccessfulin securingcomplianceon paper. The timingofthenew
policies can be explainedby a neorealistapproach thatemphasizescoercion.
Indeed, even thoughmost analystsargue that neoliberal explanationsare
superiorin accountingforthe substanceor contentof policies,in thiscase the
neorealistanalysisappearsto be sufficient.The policieshave been theresultof
directpressurefromindustryrepresentatives via the USTR, who have been
instrumental in shapingthesubstanceofthenewpoliciesthroughconsultations
withtargetedgovernments. Yet, in nearlyeveryinstancethetargetedcountries
have engaged in footdraggingand chosen not to implementand enforcethe
new policies. The continuedmonitoringand repeated threatsof renewed
Section 301 action in the absence of satisfactoryenforcementof the new
policies suggest that the trend toward greater protectionof intellectual
propertyis not being as ardentlyembracedas the United States would wish.
The targetedstatesacquiesce on paper and do just enoughto freethemselves
of U.S. pressure-but no more. While these countrieshave changed their
policies,theyhave not changed theirmindsabout the meritsof intellectual
propertyprotection.Even when the United States carriedout its threatsby
imposingsanctions on Brazil, India, Mexico, and Thailand, the targeted
countriesdid not comply.Free ridingon others'intellectualpropertyand the
profitsfrompiracystilloutweightheliberalnormofrespectforproperty rights.
Withthe sole exceptionof Mexico,at thisstage in theirdevelopment,theydo
not yet see intellectualpropertyprotectionas being in theirinterests.While
some evidence suggeststhat this is beginningto change, the widespread
acceptanceofthenormofintellectualproperty protectionis stilla longwayoff.
policyas a choice:changingtheirminds?
Antitrust
In contrastto the intellectualpropertyprotectioncase, the adoption of

antitrustpolicies in developingcountrieshas been based on choice within
37. SummarizedfromOscar Becerril,"Mexico's New Law Liberalizes TechnologyTransfer,"

Les Nouvelles27 (March 1992),pp. 4-5.
38. Mike Privaterais quoted in WilliamNeuman,"IPR ProtectionImproves,But ReformsNot
Uniform,"BusinessLatinAmerica,20 April1992,p. 127.

constraintsratherthan on coercion. Antitrustpolicies have been adopted

voluntarily,and the internationalinstitutional machineryestablishedin 1980
under the RBP Set has played an increasinglyimportantrole. As with
intellectualproperty rights,theeconomiccrisisoftheearly1980spromotedthe
policyshiftin developingcountries.However,the effectsof the crisiswere
different in this case: in the antitrustcontext,industrializedcountrieshave
refrainedcompletelyfromdirecthegemoniccoercionand threats.
On one level,the antitrust case is consistentwiththe neorealistexpectation
thatthe weak conformto the preferencesof the strong.Yet thiscase is also
consistentwitha conceptualizationof internationalrelationsthatfocuseson
the diffusion of ideas-here, neoliberaleconomicideology.In the intellectual
propertycase, learningon thepartof U.S. policymakers led to the adoptionof
a coercivestrategy; externalcoercionled developingcountriesto changetheir
policies.The sequencingof policychangein the antitrust case is different,and
normchangemayhave precededpolicychange.The underlying cause fornorm
change here was the economic crisisof the 1980s. But the more proximate
causes are to be foundin therealmof ideas.
As ThomasBierstekerpointsout,"in mostinstances,the'demand'forpolicy
reversalcame fromtechnocraticentrypointsfornew thinking... withinthe
state. Although these factionswere present before the early 1980s, the
magnitudeof the economic crisis,along with the failure of past policies,
providedthemwithan opportunity to articulatean alternativeset of ideas."39
The ideas were borrowed from the internationalpool-the Reagan and
Thatchereconomicrevolutionsand the academic economists(i.e., the "Chi-
cago school")-and weregivenfurther credencebythedemonstration effectof
theEast Asian successstories.40
The switchtoward export-ledindustrializationand attendanteconomic
liberalizationhave raiseda hostof economicissuesthatdid not seem salientto
developing countries during the NIEO era. Undeniably,certain coercive
elementshave been at work,foreconomicpolicychanges have been in part
drivenbystructuraladjustmentprogramsthroughthe InternationalMonetary
Fund and the World Bank.41Economic liberalizationis a core componentof
39. Thomas Biersteker,"The 'Triumph'of Liberal Economic Ideas in the DevelopingWorld,"

in Barbara Stallings,ed., The New IntemationalContextof Development(Cambridge:Cambridge
University Press,forthcoming), manuscriptp. 13.
40. In the early1980s,the East Asian "miracles"were inaccuratelyheld up as paragonsof free
marketeconomics.Much of the subsequentEast Asian scholarshiphas exposed thisfallacyand
demonstratedthe importanceof extensivestate interventionin these countries'development
policies. On the demonstrationeffect,see G. John Ikenberry,"The InternationalSpread of
PrivatizationPolicies: Inducements,Learning,and 'PolicyBandwagoning,'" in Ezra Suleimanand
JohnWaterbury,ThePoliticalEconomyofPublicSectorReformand Privatization (Boulder, Colo.:
Westview,1990),pp. 88-110.
41. In fiscalyear 1988, the followingtwenty-sixcountriesaccountedfor85 percentof World
Bank lendinggeared to reforming industrialand trade policies: Argentina,Brazil,Chile, China,
Colombia, Ecuador, Egypt,Greece, Hong Kong, Hungary,India, Indonesia, Malaysia, Mexico,
Morocco, Nigeria,Pakistan,Peru, Philippines,Poland, Republic of Korea, Singapore,Thailand,

InternationalMonetaryFund conditionsfor loans to developingcountries.

Furthermore, a spillovereffectfromcoerciveeconomicpoliciescould account
forthetimingof thechangesin antitrust policy,helpingto explaintheten-year
lag between the establishmentof institutionalmechanismsto expedite the
passage of antitrustlaws and the developingcountries'use of those mecha-
nisms.42
Deregulation,privatization, and the liberalizationof trade and investment
climates pose new challenges for developing countries. For example, by
deregulatingeconomicsectors,statesneed to ensure thatthe formerregula-
tions are not replaced by private-sectoranticompetitive behavior,such as
marketallocation or price fixing.As states privatizeformerlystate-owned
enterprises, theyneed to ensurethatprivate-sector ownersdo not abuse their
positionsand replicatetheinefficiencies oftheformerstatesector.Bybreaking
up formerstatemonopolies,statesseek to ensurethatthe new entitiesdo not
engage in restrictivebusinesspractices.In addition,by liberalizingtrade and
investment climates,developingcountriesare abandoningtheirformerstance
of discriminating againstforeign-based multinational corporations.
Thus, an economiclogic is at workinsofaras a countryeventuallygains an
interestin promotingcompetitionin its domesticmarketas a consequence of
liberalization.Even so, what distinguishesthis case fromthat of intellectual
propertyprotectionis that an internationalinstitution, establishedin 1980
the
through adoption of the RBP set,has played a significantrole in spreading
the industrializedcountries'conceptionsof antitrustand competitionpolicy.
The institutionalmechanismsestablishedunder the termsof the RBP Set
providea forumforeducation,the drafting of legislation,and the trainingof
officialsin implementationand enforcementof antitrustlaws and policies.
Policymakers in developingcountriesare recognizingtheconnectionsbetween
liberalizationand antitrustpolicies.InsteadofhavingtheUnitedStatesdictate
the substance of the policies under the threat of trade sanctions,these
countriesare takingtheinitiativeand activelyrequestingthehelp and adviceof
the IGE establishedby the RBP set. In other words, the more proximate
explanationsuggestsa significant role forinternational institutionsand choice.
The voluntarismin thiscase representsa contrastto the transparentcoercive
hegemonyoftheintellectualpropertycase.
A decade afterthe adoptionof the set of principlesand rules,the president
ofthe Second Conferenceto Reviewthe Set opened the Conferencebynoting
that"The worldwas now quite different fromwhat it had been 10 yearsago
when the Set of Principlesand Rules had been adopted, or even 5 years ago
whenthe firstReview Conferencehad been held. The past year,in particular,
PoliciesforIndustrializ-
Turkey,Venezuela, and Yugoslavia.See Claudio R. Frischtak,Competition
Policyand Research Series no. 7 (Washington,D.C.: WorldBank, 198 ), p. 25 nn.3
ingCountries,
and 4.
42. Vinod Aggarwalsuggestedthis point in his commentson an earlier draftof the present
article.

had seen veryrapidchangesin the international economyand therewas nowa

greaterand morewidespreadappreciationof the benefitsof the freemarket
and competition."43 Indeed, the UNCTAD secretariathas receivedrequests
for technical assistance under the terms of the RBP set from fifty-nine
developingand CentralEuropean countriesbeginningin 1989.
The countrieshave requestedmanydifferent typesof assistance,including
organizingregionaland nationalseminarsor workshops,draftinglegislation,
and trainingRBP officials.Table 6 lists the countriesthat have requested
assistance and the nature of the requested assistance. UNCTAD initially
providedassistancein the formof regionalworkshopsto introduceinterested
countriesto the operationof antitrust legislationand the controlof restrictive
businesspractices.Due to the huge demand in thisarea, it has expanded its
activitiesto includenationalseminars,advisorymissions,trainingworkshops,
and on-the-jobtraininginternships.44
As Table 6 shows, fifty-two countrieshave participatedin UNCTAD's
regionalworkshops,and an additionalfivecountrieshave requestedUNCTAD
assistancein conductingregionalseminars.Twelvecountrieshave participated
in national seminarson restrictive business practices;two countriesplan to
participate, and an additionaltwenty-one countrieshave requestedhelp from
UNCTAD for their national seminars. Currently, fourteencountrieshave
restrictivebusiness practiceslaws on the books; four are currentlydrafting
legislation;twohave plannedto draftsuchlegislation;and fourhave requested
UNCTAD assistancein preparinglaws. Finally,the trainingmissionsspon-
sored by UNCTAD address issues of implementation. Three countrieshave
thusfarparticipatedin trainingmissions;fourhave plans to participate;and
fourmorecountrieshave requestedUNCTAD assistancein trainingantitrust
officials.
The firstcountryto adopt RBP laws afterthe UNCTAD negotiationswas
South Korea. Accordingto a spokesman for the Korean government,his
country"respondedimmediatelyafterthe adoptionof the Set by introducing
theAct forMonopolyRegulationand Fair Trade and had starteda systematic
control of anti-competitiveand unfair business conduct."45The Korean
governmentmodeled its law afterthose of Japan and Germany,yet added
uniquely Korean elements. For example, violators of the law have been
requiredto issue public apologies. The staffof the Korean Fair Trade Office
judges this remedy to be, "perhaps even more powerfulthan monetary
remedies."46
43. UNCTAD, Reportof the Second UnitedNations Conferenceto ReviewAll Aspectsof the
BusinessPractices,
AgreedEquitablePrinciplesand RulesfortheControlofRestrictive
Multilaterally
TD/RBP/CONF.3/9 (Geneva: UNCTAD, 11 February1991),p. 1, par. 3.
44. Ibid.,p. 2, par. 7.
45. Ibid.,p. 15,par. 46.
46. StanleyP. Wagner,"Antitrust:The Korean Experience 1981-85," The Antitrust Bulletin,
Summer1987,pp. 471-522.The quotationis fromp. 500.

TABLE 6. StatusofSetofMutuallyAgreed EquitablePrinciples and Rulesforthe

BusinessPractices(RBP) technicalassistanceprograms,
ControlofRestrictive
bycountrya
Requesting Regional National Drafting RBP

Training
country seminar seminar legislation officials
Albania Request Request

Argentina Action Action Law Plan
Bangladesh Action
Botswana Action
Bolivia Action
Brazil Action NA Law Request
Brunei Action Request
Bulgaria Request Request
Cameroon Action Request Request
Chile Action Action Law Action
China Action Action Request Request
Colombia Action Request Draft
Costa Rica Action Request
Cuba Action Action
Dubai Request Request
Ecuador Action Request
Egypt Action Request
Ethiopia Action
El Salvador Action
Fiji Action
Gambia Action
Ghana Action Action Draft Plan
Guatemala Action
Guinea Action Action Request
Honduras Action
Indonesia Action Action Request Request
India Action Law
Iran Action
Kenya Action Action Law Action
Lesotho Action
Liberia Action
Madagascar NA Request
Mexico Action Request
Mongolia Action Request
Morocco Action Request
Myanmar Action Request
Nepal Action
Nicaragua Action
Nigeria Action Plan Plan Plan
NorthKorea Action Request
Oman Request
Pakistan Action Law
Peru Action Action Law Request
Poland Request Request Law
Philippines Action Action Draft
Romania Request Request
Russian Federation Action Request Law

TABLE 6. continued
Requesting Regional National Drafting RBP

Training
country seminar seminar legislation officials
Somalia Action
SouthKorea Action Law
Sri Lanka Action Request Law Action
Swaziland Action
Thailand Action Action Law
Trinidadand Tobago Action Request
Tunisia Action Law Request
Uruguay Action
Vietnam Action Plan
Venezuela Action Law
Zambia Action Action Plan Plan
Zimbabwe Action Draft
aRequest = actionhas been requested;Dash = no actioncurrently is planned;Action = action

has takenplace; Law = a law has been enacted;Plan = actionis planned;NA = notapplicable;
Draft= drafting of legislationis in progress.
Source.Adapted fromUNCTAD, "ActivitiesRelatingto SpecificProvisionsof the Set: Techni-
cal Assistance,Advisoryand TrainingProgramson RestrictiveBusinessPractices,"doc. TD/B/
RBP/83,6 August1991,p. 5, par. 20, and doc. TD/B/RBP/90,28 July1992,pp. 11-12.
Anotherkey difference betweenKorea's antitrustpolicies and intellectual

propertyprotectionis that Korea is implementingand enforcingantitrust
policies.Korea has targetedthechaebol,or domesticindustrialconglomerates;
in 1981 the thirtyKorean chaebol comprisedless than 1 percentof corpora-
tions,yet accountedfor39.7 percentof sales in miningand manufacturing.47
Between1981 and 1985,"in everycase involving a majorchaebol,violationsof
the statutewere found,and the subsequentcorrectiveordersindicatethatthe
chaebol were treatedno less harshlythan other defendants."48 In this case
there is no discrepancybetween the adoption of the policies and their
implementation; Korea's NationalAssemblybothsupportsand approvesofthe
activitiesoftheFair Trade Office.49
The domesticconsumerdemand to restrainthe power of the chaebol has
increasedover time.Once viewed as enginesof development,in the popular
mindchaebol are now perceivedas corruptand inefficient. Between 1986 and
1992,not much forwardmovementon antitrustpolicyoccurred;the chaebol
activelyresistedgovernment policiesand became adept at dodgingthem.With
the recentdemocratizationof Korea, publicpressureagainstthe chaebol has
increased. Korea amended its Fair Trade Act in November 1992, "to
Policy,TechnicalPaper no.
47. Roger Alan Boner and Reinald Krueger,TheBasics ofAntitrust
160 (Washington,D.C.: WorldBank, 1991),p. 43 n. 92.
48. Wagner,"Antitrust,"p. 505.
49. Ibid.,p. 516.

strengthenrestrictions on cross-ownership and capital investmentlimitsfor

large businessgroupings."50 This was the strongestlegislativemeasureyetto
curb chaebol power. Elected in December 1992, PresidentKim Young Sam
launched an aggressiveanticorruptioncampaign that has focused on the
chaebol and theiruse of financialpowerto buyelections.In November1993,
Chung Ju Yung, founderof Hyundai (one of the largest chaebol) and a
presidentialcandidate in the 1992 election,was sentencedto threeyears in
prisonforviolatingelectionlaws by diverting$62.8 millionfromthe Hyundai
Group to financehis campaign.51 Accordingto Koo Suk-moo,vice presidentof
the Korea Economic Research Institute,"The general public has linked
business activitieswithpersonal wealth accumulation.... They now look at
them [the chaebol] as entities of destructivepower and influence."52In
responseto thisnegativeassessment,JohnBurtonreportedthatin April 1993
thechairmanoftheFair Trade Commission,Han Lee-hun,announcedthatthe
new government of PresidentKim "willuse anti-trustlaws as itsmainweapon
to curb the economicpower of the chaebol.... Han explainedthat ... their
dominance of the domestic economy preventedthe growthof small and
mediumbusinesses."53In the summerof 1993, Han unveiled a new line of
attackby initiatingFair Trade Commissioninvestigations into the chaebol's
internal trading practices. According to Burton, the chaebol's extensive
internaltrading"reduces the abilityof small businessesto sell productsand
servicesto theconglomerates."54
PresidentKim rode intoofficeon a populistwave; thusfarhe has exhibited
bold leadershipand has been unafraidto confront thechaebol directly. He has
made it clear thatantitrust instruments willbecome increasingly importantin
the battle. Parallelingthese efforts,he has added campaignfinanceand tax
reformto his arsenal. Accordingto an UNCTAD report,lookingback on
Korea's decade-longexperiencein theRBP field,theKorean spokesmannoted
that"technicalco-operationfrominternational organizationssuchas UNCTAD
and fromdevelopedcountrieshad been veryuseful.Duringthe past 10 years,
the variousinternationalmeetingson antitrustor RBP control,includingthe
IGE meetingsand seminarsheld byUNCTAD, had providedhis countrywith
good advice whichhad been instrumentalin the efficientenforcementand
improvement of fairtrade policyin Korea."55Thus, in contrastto the Korean
50. UNCTAD, "Draft Report of the Intergovernmental Working Group of Experts on

RestrictiveBusiness Practiceson its Eleventh Session," TD/B/RBP/L.58/Add. 1, UNCTAD,
Geneva,26 November1992,p. 9, par. 40.
51. "HyundaiFounder SentencedforViolatingElection Laws," New YorkTimes,2 November
1993,p. A10.
52. Koo is quoted in Bruce Cheeseman, "Hyundai Probe Turns Up Heat on Big Business,"
SouthChinaMorning Post,13 December 1992,p. 2.
53. JohnBurton,"South Korea to Probe Chaebol Power,"FinancialTimes,7 April1993,p. 7.
54. Ibid.
MultilaterallyAgreed
EquitablePrinciplesand RulesfortheControlofRestrictive " p.
BusinessPractices,
16,par. 49.

effortsto strengthen intellectualpropertyprotection,the Korean implementa-

tion of antitrustpolicyhas been influencedby UNCTAD activities,has been
undertakenfordomesticreasons,and is supportedbythepopulace.
While South Korea was in a sense the post-RBP-setpioneer,a numberof
otherdevelopingcountriesalso have adopted antitrust legislationand policies
to controlRBPs. Venezuela hostedan UNCTAD regionalseminarin Septem-
ber 1990. Venezuela's new antimonopolylaw establishedthe Anti-Monopoly
Superintendency to implementitspolicies.A 1992 testcase suggestedthatthe
superintendency would apply the new law stringently. Venezuelan Sugar
DistributorCompanycontractedwithdomesticsugarmillsto be the exclusive
distributor of sugar to the millsand assertedits rightto set prices.Business
LatinAmericareportedthatSuperintendent Ana JuliaJatarchallengedthese
contractsand "saysthefirmmustnegotiatecontractswithoutexclusiveclauses
in orderto open thewayforcompetition.ObserverssayJatarcould be testing
the water with'small fry'beforeconfronting the powerfulcartelsthat have
traditionallydominatedVenezuela's distribution system."56 During 1992 and
1993,thesuperintendency expandeditsactivitiesbyinitiating itsowninvestiga-
tionsand renderingnumerousopinionsand consultations, "the mostimportant
of which related to proposed mergersand acquisitionsin electric power,
airline,vegetable oil, beverage, paint, ceramic, automobile,and insurance
sectors. Decisions to date reflectthe practical approach of the agency in
addressingproblemsof economic efficiency and consumerwelfare,"in the
words of Thomas Hughes.s7Importantly, the Venezuelan law is targeting
domesticmonopolies;this is a clear departurefromthe Andean countries'
earlierantitrustapproachoftargeting onlytransnationalenterprises.
The Venezuelan Anti-Dumpingand SubsidiesCommissionof the Ministry
of Industrypublisheda blockexemptionto the antimonopoly law in July1993,
defining"certainactivitieswhichbecause of theirrelativelyminorimpacton
the total marketwould not be considered an abuse of dominantmarket
position (designed primarilyto help small businesses)."58The Venezuelan
governmentpassed a new antimonopolylaw in August 1993 and a new
privatizationlaw that,as Hughes pointsout, providedthat"the privatization
process shall be null and void if the resultsviolate the Venezuelan anti-
monopolylegislation."59This underscorespolicymakers'concerns that the
privatizationprocessshouldpromotedomesticcompetitionratherthanmerely
transfereconomicconcentration to privatehands.At least throughthe end of
1993 Venezuela was implementingthis law; for example in Novemberthe
56. ManagementAlert,BusinessLatinAmerica,3 August1992,p. 268.

57. Thomas Hughes, "Venezuela: Recent Developments,"Latin AmericanLaw and Business
Report2 (February1994),p. 23.
Report1 (August1993),pp. 27-28.
Report1 (September1993),pp. 32-33.

antimonopoly authoritiesbarredthe local airlineAvensa fromparticipating in

biddingforthe privatization of Venezuela's otherlocal airline,Aeropostal,to
avoid the creation of a dominantmarketposition for Avensa withinthe
country.60
Chile began liberalizingitseconomymostrecentlyin 1985.61Afterreturning
to democracyin March 1990, the Chilean governmentstrengthenedthe
institutionsresponsiblefor promotingand implementingliberalizationand
freecompetition.In 1990,Chile revisedits formerantimonopoly law (Decree
211 of 1973) to expandthe responsibilities of the NationalEconomicTribunal
(Fiscalia Nacional), whichhas extensiveinvestigative powers,to include the
controlof price distortionswithrespectto imports(Law 18.525).62Chile also
participatedin UNCTAD's regionalRBP seminarin Caracas in September
1990 and discussedits experiencein the controlof RBPs; furthermore, Chile
participatedin the UNCTAD-sponsored RBP officialstrainingprogram.The
Chilean delegateto the second reviewconferencestatedthat"his countrywas
keen on constantlyimprovingits legislationwiththe objectiveof promoting
free competition.All these developmentswere fullyin line withthe Set of
Principlesand Rules. Moreover,Chile was willingto share itsexperiencewith
othercountrieswishingto adopt and implementcompetitionlegislation."63 By
organizingand conductingthese seminars and meetings,UNCTAD has
created a forumin whichdevelopingcountriescan compare notes witheach
otheras theybeginadoptingand implementing thesenewpolicies.
In lightof itsintellectualpropertystance regardingpharmaceuticals,Brazil
launchedan interesting investigation intoBrazilianpharmaceuticalcompanies
under its antitrustlaws. AlthoughBrazil liftedprice controlson Brazilian
pharmaceuticals, theMinistry of theEconomyhas continuedto monitorprices
in an effortto protectconsumersand preventunfairbusiness practices.64
Brazil's Administrative Council for Economic Defense (CADE) is charged
withinvestigating and punishingunfairbusinesspractices(i.e., monopolyand
cartel formation).In 1992, CADE fined several Brazilian pharmaceutical
companies for the abusive practice of tryingto raise prices by withholding
consumergoods.
60. Thomas Hughes, "Venezuela: Recent Developments,"LatinAmericanLaw and Business

Report1 (November1993),p. 26.
61. The Chileangovernment had adoptedneoclassicaleconomicreformsin theearly1970safter
the takeoverby AugustoPinochet.For a discussionof thisearlierperiod see Alejandro Foxley,
Latin AmericanExperiments in NeoconservativeEconomics (Berkeley: Universityof California
Press,1983).
Multilaterally and RulesfortheControlofRestrictive
AgreedEquitablePrinciples BusinessPractices,p.
26, par. 91.
63. Ibid.
64. This paragraphis based on PinheiroNeto-Advogados,"Investigationof Pharmaceutical
IndustryforAbuse of Economic Power,"LatinAmericanLaw and BusinessReport1 (April 1993),
pp. 23-24.

In early1994,theBrazilianMinistriesof Finance and Justicebegan drafting

a new antitrustlaw.65The presidentof CADE, Ruy Coutinho,indicatedthat
the new law will substantiallyspeed the processingof antitrustcases from
nearlytwoyearsto forty-five days.The bill will also definethe term"abusive
prices"-importantbecause government officialshave interpretedthistermin
politicallyconvenientwaysthatoftenbear no relationshipto anticompetitive
practices.Strengthening policiesis an importantstep;in thepast thesepolicies
have notbeen frequently enforced,and Braziliancourtshave overturnedmost
CADE administrative decisionswhenappealed bybusinesses.
Mexicopassed a new antitrust law in December 1992thatcame intoeffectin
June1993.As Natalia Delgado and StevenMartinsuggest,"essentially, theAct
is the Mexican government'sattemptto implementUnited States antitrust
policyin Mexico."66As in the intellectualpropertycase, Mexico is strongly
motivatedbyNAFTA. Chapter 15 of the NAFTA agreementcoverscompeti-
tionpolicy,and accordingto Jeffrey Lang and Laura Brankrequiresthat,"each
Party adopt measures preventingmonopolies and state enterprisesfrom
unfairly discriminating against,or engagingin, anti-competitive practiceswith
respectto investments ofotherNAFTA parties."67 Mexicohas movedswiftly to
implementthe law and establishan intensivetrainingprogramto develop the
necessaryexpertiseforstaffing the Federal CompetitionCommission(FCC).68
India has fundamentally changeditstreatment offoreigninvestors, and since
1989 has relaxed barriersto entry.The Monopolies and RestrictiveTrade
PracticesAct (MRTP) of 1969 had been used to limitthe entryof foreign
multinationalsintothe Indian market.However,as BusinessAsia reported,a
seniorexecutiveofa largeIndianenterprise(theTata Group) pointedout that,
"the waythe law is beingapplied now 'has the effectof keepingthe legislation
intactwhile dismantling, in practice,the entireedificeof regulatorycontrols
builtup in the 1970s.' "69
Relaxingtheformerstringent criteriaforindustriallicenses,in late 1988the
Indian governmentapproved a major collaborationbetween Tata Iron and
Steel Company (TISCO) and U.S.-based Timken Company to produce
bearings.As characterizedby BusinessAsia, "The controversialprojectwon
government permitsdespitevocal oppositionfromexistingmanufacturers-on
65. This paragraphis based on ScottStudebaker,"Brazil: EconomicPlan, Privatization,

Status
of ConstitutionalCongress,and OtherRecent Developments,"LatinAmericanLaw and Business
Report2 (February1994),p. 8.
66. Natalia Delgado and Steven Martin,"Mexico: The New Law of Economic Competition,"
LatinAmericanLaw and BusinessReport1 (June1993),p. 27.
67. JeffreyLang and Laura Brank,"A Step in the RightDirection: Unlockingthe Mexican
EnergyMarket,"LatinAmericanLaw and BusinessReport1 (August1993),p. 14.
68. MarketNotes,"Mexico's SECOFI ImplementsCompetitionLaw," LatinAmericanLaw and
BusinessReport1 (May 1993),pp. 34-35.
69. "Tata Timken Shows India's Monopolies Law is Losing Its Teeth," BusinessAsia 4
(September1989),p. 292.

the verygroundsthatlikelywould have led to its rejectiona fewyearsago."70

Other Indian bearingmanufacturers argued that the Tata-Timken venture
would floodthe marketand hurtlocal producers.The government's monopo-
lies commissionrejected theirargumentsand defendedthe ventureon the
groundsthat:(1) itwouldresultin productupgradingdue to access to superior
technologyand (2) theventurewouldnotseize the dominantmarketsharebut
instead would create a countervailingforce and thus stimulatedomestic
competition.71 againstforeignmultina-
Thus India has eased itsdiscriraiination
tional corporationsand has gone so far as to defend the meritsof foreign
multinationalinvestmenteven against local opposition.The Indian govern-
ment also has approved numerousjoint venturesbetween Indian firmsand
transnationalenterprisessuch as MinnesotaMiningand Manufacturing (3M)
and HoneywellCompany;whileit is entirelypossiblethatsome jointventures
mayhave anticompetitive effects,theTata-TimkenrulingsuggeststhatIndia's
monopoliescommissionis concernedwithstimulating domesticcompetition.
In anotherstrongreversalof past discriminatory policies,in 1993 the Indian
cabinet approved Coca Cola's plans to set up a whollyowned ventureto
produceitssoftdrinksin India.72In thewordsof TheEconomist,"Keeping soft
drinksmakersout of India has been a fetishwithIndian socialistseversince a
previousgovernmentchuckedout Coca Cola in 1977."73India's leading soft
drinkscompany,Parle,had been protectedfromforeigncompetitiondue to the
stringentlimitson shareholdingsin local affiliates.Under the 1973 Foreign
Exchange Regulation Act, foreignownershipwas limitedto 40 percentof
equity.74The Indiangovernment in Augustof 1991,and in
liftedthisrestriction
1993 alone over a hundredcompanies had won approval to increase their
Coca Cola's welcomeback on suchgenerousterms
equityin Indian affiliates.75
demonstrates thiscompletepolicyreversal.76
While the followingcases do not reveal extensiveimplementation,the
countries below voluntarilyhave sought UNCTAD counsel and availed
themselvesof UNCTAD's trainingprograms.In Latin America,the Andean
Pact countrieshad participatedin UNCTAD regional seminarsand each
requested national level workshops.As the Colombian spokesmansaid, "as
economies were liberalized the Set of Principlesand Rules had shown its
usefulness.... The dismantling ofquantitativerestrictionsinColombiahad led
70. Ibid.
71. Ibid.,p. 293.
72. Suman Dubey,"India Clears Some ForeignInvestments,SendingBullishSignalon Reform
Drive," WallStreetJournal,24 June1993,p. A6.
73. "Indian Economy,Pepsi Generation,"TheEconomist,6 June1990,p. 40.
74. JayantaSarkar,"Back in Charge: India's ReformsEntice Foreign Firmsto Raise Their
Profile,"Far EastemEconomicReview,8 July1993,pp. 49-50.
75. Ibid.
76. I thankan anonymousreviewerforInternational Organizationforsuggestingthisexample
to me.

to the adoption of antidumpingand countervailingduty statutes,and the

beginningofrevisionof antimonopoly legislation."77
Peru also adopted antitrustpolicies. Peru participatedin regional and
nationalseminarsconductedbyUNCTAD and has requestedfurther UNCTAD
assistancein trainingantitrust to implementand enforcethesepolicies.
officials
In November1991thelegislaturepassed over126 laws,manyofthemdesigned
to stimulateprivate-sectoractivity,and radicallyreorientedthe country's
formerlystatisteconomic policies. As part of this sweeping change Peru
eliminatedstate monopolies in telecommunications, postal and railwayser-
vices,and utilities.78
In 1987,SriLanka adopted antitrust legislationand createdtheFair Trading
Commissionof Sri Lanka, whichapplied the principleslaid downin the RBP
set ofprinciplesand rules.79Sri Lanka also receivedassistancefromUNCTAD
in the formsof a regionalseminarand a programto trainRBP officials.The
PhilippinegovernmentintroducedBill 996 in 1989 to address antitrustand
RBP issues. This bill proposed to establishan independentantitrustcommis-
sion and was variouslyinspiredbytheRBP code, U.S. lawsand courtdecisions,
and European models or experience.Speakingon behalfof the Group of 77
(developingcountries),the Philippinedelegate emphasizedthat,"In the 10
years since the adoption of the Set, the functionsof the Intergovernmental
Group of Experts had assumed greaterimportanceas Governmentsmade
competitionpolicya priority."80 In November1992 at the IGE meeting,the
spokesman for the Philippine governmentindicated that UNCTAD had
providedgeneroustechnicalsupportforthe developmentand institutionaliza-
tionofPhilippinecompetitionpolicies.81
ManyAfricancountries,such as Ghana, Kenya,Nigeria,and Zambia, also
have activelysought UNCTAD assistance in designingpolicies to control
RBPs. For example,Ghana availeditselfofUNCTAD's servicesby:participat-
ing in a nationalseminarin February1991; hostingan UNCTAD consultant
and UNCTAD RBP staffmemberfor a workingvisitfor advice in drafting
legislation;meetingwithUNCTAD RBP expertsin London in May 1992 and
visitingLondon's Officeof Fair Trading;and returning to Geneva to discuss
Ghana's RBP programwiththeRBP Unitof UNCTAD.82
MultilaterallyAgreed and RulesfortheControlofRestrictive
EquitablePrinciples " p.
BusinessPractices,
17,par. 56-57.
78. Based on SallyBowen,"Peru Opens Up EconomywithDeluge ofLaws," FinancialTimes20
November1991,p. 8, quoted in PierreGuislain,Divestiture ofStateEnterprises:
An Overview ofthe
Legal Framework, technicalpaper no. 186 (Washington,D.C.: WorldBank, 1992),p. 10 n. 27.
MultilaterallyAgreed and RulesfortheControlofRestrictive
EquitablePrinciples BusinessPractices,p.
18,par. 58.
80. Ibid.,p. 38, par. 144.
81. UNCTAD, "Draft Report of the Intergovernmental Working Group of Experts on
RestrictiveBusinessPracticeson Its EleventhSession," p. 10,par. 43.
82. UNCTAD, Reviewof the Operationof and ExperienceArisingfromtheApplicationand

The institutionalmechanismsestablishedin 1980 have come to serve a

number of importantfunctions.Multilateral assistance in the form of
UNCTAD's regional seminarshas introducedlarge groups of government
officialsto basic RBP controlprinciples.The IGE has become a forumfor
informalconsultationsthat,as summarizedby UNCTAD, has "served in the
past to identifyproblemsthatdevelopingcountries... faced in RBP control,
had provideda forumfordiscussionsofpossiblesolutionsto suchproblemsand
had servedto establishimportantcontactsbetweenexpertsof developed and
developingcountries."83 UNCTAD also has compiledand distributeda listof
RBP controlauthoritiesin numerouscountries,completewithphonenumbers,
addresses, and fax numbers and a standardizedchecklistfor information
requests and for steps that countriesmust take in preparinga case and
requestingconsultation.84 In this sense it is reducingtransactioncosts for
interestedstatesand therebyprovidingimportant benefitsto participants.
Beyondreducingtransactioncosts,the IGE has become a sourceof detailed
substantiveinformation about the rationaleforand operationofthe controlof
RBPs. During each session of the IGE, states are encouragedto engage in
multilateraland bilateral consultationson RBPs, address specificproblems,
and establishcontactswithexperts.Participantshave praised these consulta-
tions as helpfuland informative, and in response to the IGE's request,the
UNCTAD secretariathas pledged to continueto providefacilitiesforthese
consultations.UNCTAD has encouragedstatesto presentseminarson specific
substantivetopics, including deregulation and the treatmentof natural
monopolies,at thesemeetings.
By contrastto the acrimoniousfirstconferenceto reviewthe RBP Set in
1985, the second conferencein 1990 was characterizedby a high degree of
consensuson themeritsofboththeset ofprinciplesand rulesand theactivities
ofUNCTAD in thisarea. At UNCTAD VIII, whichtookplace in Cartagenain
February1992,memberstatesagreedthat:"UNCTAD shouldpursue,through
the Intergovernmental Group of Expertson RestrictiveBusinessPractices,its
workwithregardto policies and rules forthe controlof restrictive business
practices to encourage competition,to promote the proper functioningof
marketsand efficientresourceallocation,and to bringaboutfurther liberaliza-
tion of internationaltrade."85The NIEO focus on economic exploitationis
absent from this formulation.As the spokesman for the industrialized
countriesnoted,"an increasingnumberof developingand easternEuropean
Implementation of the Set of Multilateral

AgreedEquitablePrinciplesand Rulesfor the Controlof
RestrictiveBusinessPractices,TD/B/RBP/89/Add.1(Geneva: UNCTAD, 30 September1992), p.
2, par. 4-9.
MultilaterallyAgreed EquitablePrinciplesand RulesfortheControlofRestrictive
BusinessPractices,p.
29, par. 104.
84. UNCTAD, "Adoption of the Agenda and Organization of Work," TD/B/RBP/86,
UNCTAD, Geneva,21 July1992.
85. Ibid.,p. 2.

countrieswere followingthe Set's principlesin developingtheirown RBP

legislation.... The Set ... had stood the testof timebetterthan could have
been imaginedin 1980."86
Clearlythe institutionalmechanismsfor RBP controlestablishedin 1980
have played an importantrole in providinginformation, transna-
facilitating
tional learning,and gettingothersto join the growingnumberof countries
acceptingtheprincipleof RBP control.In Ikenberryand Kupchan'sterms,this
is a case of "normativepersuasion"in whichthe participating countrieshave
learned more about and accepted the idea of RBP controlpriorto adopting
policies.87By activelyapproachingUNCTAD both forhelp in the design of
these policies and forconsultationsto improvetheirfunctioning, developing
countrieshave been volunteersratherthancoerced targetsofmanipulationby
the powerful.Developing countrieshave redefinedtheirinterests,and the
institutional mechanismsprovidedbyUNCTAD have expeditedthe adoption
of new antitrustpolicies. Furthermore, UNCTAD has providedan arena in
whichdevelopingcountriescan choose froman arrayof approachesto RBPs,
designand adopt RBP controlpoliciesfortheirown reasons,learn fromeach
otheras well as fromindustrializedcountries'experts,and do so in such a way
thatdoes notcompromisedomesticlegitimacy.
Conclusion
The intellectualpropertyprotectioncase is an exampleofwhatIkenberryand

Kupchanreferto as socializationthroughexternalinducement, or,"acts before
beliefs." They describe the causal chain of behavior change as externally
induced policychange (that is, "cooperation throughcoercion") leading to
normchange (that is, "cooperation throughlegitimatedomination").88The
processofnormativechangeis stillunderwayand is, therefore, stillreversible.
The distancebetweenadoptingpolicieson paper and believingin theirintrinsic
The fact that developingcountrieshave not vigorously
meritsis significant.
enforcedthesenew policies suggeststhatdomesticoppositioncontinuesto be
robust.Interestedprivatepartiesin the United States, such as the Business
SoftwareAlliance, the InternationalAlliance for IntellectualProperty,the
PMA, and the SemiconductorIndustryAssociation,know that the distance
betweenformalpolicies and actual commitmentto the value of heightened
standards of protectionand their enforcementis great. Thus, they are
continuingto monitorthe implementation of these policies and to threaten
Section301-basedaction.
BusinessPractices,
AgreedEquitablePrinciplesand RulesfortheControlof Restrictive
Multilaterally
pp. 20-21,par. 70 and 71.
87. Ikenberry and Kupchan,"Socializationand HegemonicPower,"p. 290.
88. Ibid.,p. 291.

Business associationsalso are pursuingalternativechannelsto both secure

complianceand convincedevelopingcountriesof themeritsof protection.For
example,the PMA has fundedresearchdemonstrating the negativeeffectsof
lax protectionon developingcountries'economies. Ad hoc groups,led by
representatives of U.S. licensinginterests,have lobbied activelyin Brazil and
Mexico forincreasedpatentprotection.These groupsengage in educational
activitiesand meetwithlocal businessleaders.Accordingto RobertSherwood,
who has representedthe Brazil ad hoc group,nearlyeveryBrazilianbusiness
leader thathe metwith"has suffered losseswhenkeytechnicalemployeeshave
been hiredawayfromcompetitors, takingproprietary technologywiththem."89
The depth and sustainability of these recentpolicyreformsin intellectual
propertyprotectionwill depend on the emergenceof politicallyinfluential
indigenousinterestscommittedto thisdirection.Resistanceis stillthenameof
thegame,but at the same timesome evidenceexiststhatthismaybe changing.
Pockets of nascent indigenous interestsin strongerintellectualproperty
protectionare beginningto emerge.For example,Sherwooddocumentsa case
in which a Brazilian company owner sought to acquire a metal etching
technology fromabroad,"butifhe reachedan agreementwitha foreignsource,
he stood the riskof losingthattechnologythroughemployeedepartureto a
competitorwhile stillbeingobligatedto pay forthe acquired technology.He
droppedhis plans."90RobertMergescitesa linkbetweenstrongerintellectual
propertyprotectionand the new dynamismof indigenous industries:"A
recordingindustry flourishedin Hong Kong forthefirsttimeafterthepassage
of a copyrightact protectingsound recordings;the Indian softwareindustry
saw a growthsurgeaftera copyright "91
was extendedto software.
As more developingcountries'domesticindustriessufferfroma lack of
adequate intellectualpropertyprotectionand as theirhighvalue-addedexport
products that incorporateintellectualpropertycome to be pirated, these
industrieswillsupportstrongerenforcement. Videotape movieproducersand
record producersin Brazil, Mexico, the Philippines,Singapore, and South
Korea; computer associations in Malaysia and Thailand; and some drug
manufacturers in India have all demonstratedan interestin strongerstandards
of intellectualpropertyprotection.In the late 1980s,the associatedchambers
of commerceurged the Indian governmentto join the Paris Convention;in
1991, Indian computer softwareexportersformed the Indian Federation
AgainstSoftwareTheft(INFAST).92
89. RobertM. Sherwood,"New TheoryofConductivity inLicensing,"Les Nouvelles(December

1989),p. 187.
90. Ibid.
91. Robert Merges, "Battle of the Lateralisms: Intellectual Propertyand Trade," Boston
Law Journal8 (Fall 1990),pp. 239-46. The quotationis fromp. 246.
International
University
92. On the Paris Convention,see RobertMallott,"1990s Issue: IntellectualPropertyRights,"
Les Nouvelles (December 1989), p. 152. I thank an anonymous reviewerfor International
Organizationforprovidingme withtheINFAST example.

Additionally,as PacificRim countriescontinueto promotejoint ventures

withtransnationalenterprises,a greaterstake in intellectualpropertyprotec-
tion will be necessaryif they expect to acquire leading-edgetechnology.
Withoutsuchprotection,prospectivepartnerswillnotbe willingto sharetheir
mostvaluable technology.In fact,privateinvestorshave been able to secure
commitments fromjoint venturepartnersthat the U.S. government, Section
301 notwithstanding, has been unable to secure.For example,in orderto curb
piracy,Texas Instruments, InternationalBusinessMachines Corporation,and
MicrosoftCorporation all have become partnerswith local industriesin
Taiwan throughlicensingagreementsforcomputerhardware,software,and
chipproduction.93 This suggeststhatcorporationsmaybe betterable to create
situationsof mutualbenefitby extractingguaranteesof intellectualproperty
protectionfrompartiesthathavebeen recalcitrant in theSection301 processin
exchangeforsharingexpertiseand technologyinjointventures.
Developing countrieshave begun to encounternew problems as their
enterpriseshave expandedto manufacture technologicallysophisticatedgoods
for export.In fact,computersexportedfromTaiwan have been copied by
companiesin England,thePRC, and SoutheastAsia, thusturningthetableson
the old pattern:"before they copied others,now others copy them."94In
response to domestic demand fromlarge well-establishedexport-oriented
enterprisesin Taiwan, three industrialorganizations(the National Anti-
Counterfeiting Committeeof the National Federationof IndustriesRepublic
ofChina,theAssociationforComputerIndustry, and Taiwan ToyManufactur-
ersAssociation)have lobbiedforpolicychangesto curbpiracyand counterfeit-
ingofTaiwanese goods.95Taiwanese toymanufacturers maynowregistertheir
intellectualpropertybased on guidelinesdevelopedbyitsindustry association.
Nonetheless,these indigenousefforts have yetto succeed in changinggovern-
mentpolicyto the extentthatthe United States desires. ContinuingSection
301 and U.S. private-sectorpressurebears this out. These policies will be
implementedeffectively onlywhenthesecountriesembracethemfortheirown
reasons.
The prognosis for the control of RBPs appears to be more positive.
Developingcountriesare movingin thesame market-leddirectionbyadopting
antitrustpolicies. They are moving more slowly than is the case with
intellectualpropertyprotection,but with the help of UNCTAD, they are
tailoringpolicies to fittheirparticularsituations.They also are voluntarily
makinguse of the resourcesprovidedbythe RBP IGE. These policieswillbe
more politicallypalatable and will be perceivedas more legitimatebecause
93. Paul Liu, "A Reviewof IntellectualPropertyLaws in Taiwan: Proposalsto Curb Piracyand
Counterfeiting in a DevelopingCountry,"BrighamYoungUniversity Law Reviewvol. 5, no. 3, 1988,
pp. 619-42 and p. 630 in particular.
94. Ibid.,p. 630.
95. Ibid.

theycannot be construedas the result of "buckling"under crude foreign

pressure.
Developingcountriesface a delicate challengeahead, and the commitment
to liberalismis hardlycarved in stone. The U.S. Section 301 strategyin
intellectualpropertyhas helped to mobilize developingcountries'domestic
opposition,particularly amonglocal pharmaceuticalmanufacturers and others
who profitfromproductpiracy.96 It has also put elitesin developingcountries
in a difficultposition.If theysuccumbto U.S. pressure,theyare subject to
criticismsof sellingout theirsovereignty to foreigninterests.The sentiments
thatanimatedtheNIEO are stillpresentin the developingworld,especiallyin
Latin America.For example,despitethe factthatthe PartidoRevolucionario
Institucional(PRI) won therecentMexicanelection,questionsof socialjustice
dominatedthe populistcampaignof CuauhtemocCardenas Solorzano (Par-
tido de la RevolucionDemocratica;PRD). While he receivedonly17 percent
of the vote, his focus on the roots of the politicalviolence that eruptedin
Chiapas in early1994 highlighted distributiveissues thatthe PRI will have to
face in order to keep politicalpeace. In the wake of the Brazilian financial
scandals and resignationof President Collor, the populist candidate Luis
Inacio Lula de Silva began revivinginterestin economic nationalism.In
December 1993, disillusionedVenezuelan voters elected President Rafael
Caldera withjust over 30 percentof the vote. Caldera's campaign rhetoric
appealed to nationalistsentimentwithhis harshattackson the International
MonetaryFund and World Bank; he also pledged to reversemanyof the
market-opening "fatal economic policies" of his predecessorCarlos Andres
Perez.97
The present article suggeststhat rationalistneorealist analysisprovides
powerfulinsightsinto factors such as asymmetricalpower relations and
internationalconstraints.However,these factorsdo not capturesome impor-
tantaspectsof the story.The spread of hegemonicnormsis hardlyautomatic.
Interpretivistanalysesthatfocuson learning,choice,international institutions,
and nonstateactors,such as industryassociationsand transnationalenter-
prises,providecompellinginsightsintovariationacrossissues.
While an in-depthtreatmentof the domesticpoliticsof all the countries
discussed herein is beyond the scope of this article,it would be fruitful to
examinethe domesticpoliticsof boththe powerfulstatesas well as the states
thatare the targetsof powerfulstates' effortsto alter theirpolicies. A more
precise understandingof the conditionsunder which targeted states find
96. In the recentlyconcludedUruguayRound the provisionsof the Trade-RelatedAspectsof

IntellectualPropertyRights(TRIPS) includeimportantexemptionsfordevelopingcountries.As
Kent pointsout, developingcountries"obtained a major concession,whichwould allow themto
continueto pursueconsciouspoliciesofdrugpatentexemption."See ChristopherKent,"NAFTA,
TRIPS AffectIP," Les Nouvelles28 (December 1993),p. 176.
97. Lowell Fleischer,"Round of PresidentialElections will DetermineWhetherRegion will
ContinueEconomic and PoliticalReform,"LatinAmericanLaw and BusinessReport2 (January
1994),p. 2.

externalpressurebeneficialfordomesticreasons,and thoseunderwhichthey
willresistsuchpressure,would provideinsightsintothe processof hegemonic
socialization. Furthermore,the role of nonstate actors, such as industry
in the domesticpoliticsof boththe
associationsand transnationalenterprises,
initiatingand targetedstatesshouldbe highlighted. Both the mechanismsfor
and the impactsof transnationallinksbetweenthesepartiesare worthfurther
investigation.
The spread of hegemonicnormsalters domesticpoliticalincentives.The
of thenew directionin developingcountrieswilldepend on both
sustainability
theemergenceofpoliticallypowerfuldomesticconstituencies committed to the
new directionand the abilityof interestedprivatepartiesto mobilize these
constituencies to upholdand enforcethesepolicies.Forgingtransnationallinks
betweenprivatepartieswillbecome increasingly importantto marshallasting
supportforan open international economicorder.


Susan K. Sell 1995 IP Protection

Uploaded by

Copyright:

Available Formats

You might also like

Susan K. Sell 1995 IP Protection

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Susan K. Sell 1995 IP Protection

Uploaded by

Copyright:

Available Formats

Intellectual Property Protection and Antitrust in the Developing World: Crisis, Coercion, and

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

The nations of the developingworld have made a dramaticturn toward

annual meetingof the

49, 2, Spring1995,pp. 315-49

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

neoliberalismexaminesthe role of learningand normsas sources of change

1. G. JohnIkenberryand Charles Kupchan, "Socialization and Hegemonic Power," Intema-

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

substance,timing,and adoption of policies protectingintellectualproperty.

3. See Clive Gray,"Antitrustas a Componentof Policy Reform:What Role forDeveloping

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

1989, developingcountrieshave been flockingto UNCTAD to learn more

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

marketcompetition,these countrieshad employedthem to controlforeign

5. As Lisa Martinarguesin CoerciveCooperation(Princeton,N.J.:PrincetonUniversity Press,

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

underthe new policies;but theirpoweris beginningto erode underpressures

The economic downturnthat began in the late 1970s and progressively

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

currenttrendsin developingcountriesmustbe struckbytheextentto whichthe

Intellectualpropertyprotection:coercionand its limits

The most importantfactor in the recent spread of intellectualproperty

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

Softwareand ServicesIndustry;Business SoftwareAlliance; Computerand Business Equipment

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

Section301 oftheTrade Act of 1974givesthePresidentpowerto enforceU.S.

Section 301 cases

In a comprehensiveanalysisof the U.S. recordin Section301 actions,Sykes

10. Sykes,"ConstructiveUnilateralThreatsin InternationalCommercialRelations,"p. 313.

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

aDash = data notavailable.

TABLE 2. to theUnitedStates(in thousandsof U.S. dollars)

Country 1987 1988 1989 1990 1991

Argentina 930,599 1,217,212 1,185,397 1,698,931 a

Brazil 7,183,143 8,388,319 7,744,372 7,459,893 6,387,483

aDash = data notavailable.

pharmaceuticalsand improvingenforcementprocedures.Accordingto the

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

aRankof theUnited States as a tradingpartner,based on 1991figures,is shownwithinparen-

TABLE 4. Valueof U.S. exports countries

Mexico (3) 14,572,859 20,621,656 24,843,516 28,245,178 33,143,982

aRankofcountryas a U.S. tradingpartneris includedifcountryis amongthe top tenpartners.

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

TABLE 5. U.S. e-xperience cases underSection301

301-49 Brazil Informatics 1985 1989 Yes

Source.Adapted fromAlan 0. Sykes,"ConstructiveUnilateralThreatsin InternationalCom-

achieve intellectualpropertyobjectives."'"The Korean case remainsopen

11. Gerald J.Mossinghoff, "For BetterInternationalProtection,"Les Nouvelles26 (June1991),

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

maximumfine for piracy is 3 millionwon (about $4,000).14The Business

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

to withdrawits Section301 petition.The ArgentineCongresswas considering

20. MarketNotes,LatinAmericanLaw and BusinessReport1 (August1993),p. 32.

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

throwits weightaround and bully'its tradingpartners."26 The United States

26. Shore,"The Thai Copyright Case and PossibleLimitationsofExtraterritorial in

This content downloaded from 212.95.7.112 on Tue, 17 Jun 2014 15:49:33 PM

rarelyenforced.30 The piratingof music recorded on compact discs and of