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Archived updates for Monday, November 08, 2004

Encouraging International Technology Transfer

According to the forward, this report from the UNCTAD-ICTSD Project on IPRs and Sustainable Development reviews comprehensively the basic theory and evidence regarding how intellectual property protection affects incentives for international technology transfer (ITT). Analysis is provided of market-mediated ITT through trade, foreign direct investment, licensing, and personnel movements, along with informal means through imitation, reverse engineering, and spillovers. The report points out that there are inherent shortcomings in markets for technology that justify public intervention. One form of intervention is IPRs, which can support ITT but also
create market power. Empirical evidence suggests that enforceable patents can increase inward flows of ITT in middle-income and large developing countries but probably have little impact in the least-developed countries. Thus, the TRIPS Agreement at the WTO by itself will have little impact on technology acquisition for poor countries. Negotiators recognized this and introduced Article 66.2, which obligates the developed countries to provide positive incentives for ITT to the leastdeveloped countries. This study makes numerous suggestions for improving these incentives by policy changes in recipient countries, source countries, and the global trading system.
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