Has the emergence of a knowledge economy - a knowledge-based (UNDP, 1999) or knowledge-driven economy (DTI, 1998) - fundamentally redefined a nations' trade interests? Or are such terms, with 'new economy', a fading imprint of the dot-com era, a high-water mark of a tide, now receding, of technological optimism and exceptionalism? It may, in any event, be impossible to intelligibly isolate a knowledge economy as such. The enticing idea that a fresh set of economic rules now governs knowledge-based transactions challenges the assumptions that traditionally structured trade negotiations, which are closer to the classical conception of economic interests defined and assessed in terms of rivalry over scarcity. Knowledge (or at least information) is superabundant today, and in principle non-rivalrous, the iconic public good (Stiglitz, 1998). But rivalry can arise over access to, legitimate use of, and equitable benefits from, knowledge. Technological, cultural and economic factors are inducing new forms of production that consciously capitalize on the non-excludability of knowledge, such as commons-based peer production (Benkler, 2002), rather than relying on contract or IP-based forms of legal exclusion. Yet, strictly speaking, the conceptual elements that would define a 'new' economy are of questionable novelty; much of the theoretical debate and assessment of economic interests does not concern new economic phenomena, but rather existing phenomena differently perceived. Leading Australian wine-maker Brian Croser was therefore making a political point to policymakers, not indulging in new economy theorizing, when he called for his trade to be recognized by policymakers as an entertainment industry, not as a rural industry.1
This chapter therefore considers neither the economics of these phenomena nor the objective economic interests they affect, but rather the perceived interests and the influence of those perceptions on trade negotiations: these include perceptions of comparative economic advantages and of unfair advantage and inequities. Whatever the theoretical uncertainties and the objective reality may be, the very perception that there is a new array of interests at stake in a knowledge economy that 'trades in knowledge' (Bellmann et al., 2003) as well as a new set of economic rules (Kelly, 1997) does have actual influence when comparative trade interests are identified and pursued. This in turn creates demand for positive international law governing national regimes for access to knowledge resources and derived benefits. Knowledge economy issues have come to the forefront of international trade negotiations, and can give negotiations in other fields (such as conservation of biodiversity and agricultural research) the dynamic of trade negotiations, typified by zero-sum assessments of interests and trade-offs constructed by bartering between polarities in perceived or asserted interests. These perceived differences fuel contention, as issues of public interest knowledge management overlap the traditional domain of trade negotiations. This gives a rivalrous quality to negotiations over the terms of access to, and use of, knowledge resources - the feedstocks of the knowledge economy.
This contentiousness is due to the increasing perceived value of knowledge resources, concerns that this value is misappropriated directly or through derivative innovation, and the impact of technological change on established equitable balances and the accepted boundaries of the public domain. Together, these developments fuel debate over equity and fairness in the access to, and use of, these resources, and over fair market access for innovations. As comparative national interests are re-evaluated and the balance of interests is reappraised in international relations, the impetus grows to renegotiate and recalibrate what could be described as the 'terms of trade' for knowledge resources and derivative innovations. The contemporaneous development of endogenous or 'new' growth theory represents a theoretical endeavour to build knowledge into models of economic growth rather than treating technological development as an exogenous factor (Romer, 1994).
As the perceived value of knowledge resources in economic growth rises, a multi-faceted debate continues at several levels and in diverse contexts: internationally, it ranges over negotiations on the governance of GR, the contested quality of the public domain and the appropriate bounds of IP regimes, and claims of usurpation or misappropriation of traditional products, cultural expressions and knowledge. Knowledge resources may be non-rivalrous in principle, but the terms of access and use may in fact be closely contested, especially when there are perceptions that access or use is unfair or that benefits derived from the resources are not allocated equitably: this can bring pressure to impose exclusivity over knowledge resources, or at least to stipulate certain equitable safeguards as a condition of access. The perceived damages arising from others' inequitable benefits from knowledge resources challenge the principle that knowledge is non-rivalrous (Taubman, 2005a). Demands for equity and respect for cultural integrity can lead to calls for some knowledge resources to be retrospectively withdrawn from a public domain of contested validity. The emerging matrix of international standards governing knowledge resources is partly the product of pragmatic negotiations influenced by perceived economic interests. Yet, its fundamental, idealized, role is to reconcile widely diverse values and to articulate a robust and coherent conception of equitable balance and legitimacy of rights and entitlements associated with intangible property.
Negotiations over knowledge resources waver between articulating general rules that invoke notions of balance, fairness and equity in the abstract, but give limited guidance on how they should be delivered in practice, and ad hoc bilateral settlements that yield clarity and precision, but no guarantee of procedural fairness and consistent equity of outcomes. Reconciling these two approaches is the key to a more systematic and stable manner of meeting international demands for equity in access and use of these resources. These approaches operate in parallel at the international level, ostensibly governing relations between states, and in private international and municipal law, determining the conditions for transactions between individual entities: thus, international rules governing GR aim at establishing relations between states by stipulating the conditions for individual acts of accession. For example, a key operational element of the Food and Agriculture Organization (FAO) International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), a binding treaty in international law, is a standard Material Transfer Agreement (MTA) that would, in practice, bind 'legal or natural persons' who receive covered GR (art. 12); and the kind of 'mutually agreed terms' that the Convention on Biological Diversity (CBD, art. 15.4) requires for access to GR would, in practice, be more likely to apply directly to legal persons' accessing resources than to be a true agreement between states.
This chapter examines two contrasting clusters of knowledge economy trade negotiations that exemplify the tensions between rules-based and result-oriented settlements, and illustrates how international standards of equity are established in practice. The first cluster of negotiations considers the debate over misappropriation of GR, the fairness of innovative imitations based on traditional agricultural products, and terms of market access for innovations derived from GR. The second set considers bilateral negotiations on trade in wine, which barter between the protection of traditional modes and reputations, and the entitlement to innovate and trade in innovative imitations, seeking to balance market access, innovation and tradition. In both cases, some parties seek to sustain advantages from their established knowledge traditions and their heritage of knowledge resources; this entails negotiating with other parties who rely on a continuing innovative capacity and thus seek access to existing knowledge resources as well as market access for their innovations (these two sets of interests may neatly, if inaccurately, be classed as 'south' and 'north'). In both these cases, the challenge of finding a robust determination of equitable distribution and a fair interpretation of rules has drawn trade negotiators in the two, seemingly contradictory directions - elaborating richer rules and principles (the 'fix-rule' approach; Bhagwati, 1991), or settling on pragmatic, if ad hoc, bilateral deals ('result-oriented' or 'managed-trade' negotiations). The WTO General Agreement on Trade in Services (GATS) operates explicitly at both levels: it sets broad principles and also functions in a traditional request-offer negotiating mode to establish specific sectoral commitments. Its IP counterpart, the TRIPS Agreement, is framed as a fix-rule agreement, but this conceals a managed-trade dynamic both in its original negotiation and in its implementation, as discussed in the following section.
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