The Asian Economist

A sovereign state is one that governs independently from all foreign power. Globalization is eroding the developing countries’ ability to govern independently which ultimately leads to the erosion of the livelihood of its people. I will illustrate how globalization is eroding state sovereignty, specifically in developing countries, by using intellectual property law and the enforcement of the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights Agreement. In the following paper I will describe what the TRIPS Agreement is and how it is connected to globalization; how it is eroding state sovereignty; how it is eroding the state’s ability to regulate domestic and economic policies; and how the new agreement is actually eroding the livelihood of people in developing countries. I will conclude with why countries allow their sovereignty to be questioned by an international body.

What is the TRIPS Agreement?

The TRIPS agreement came about after the failure of the World Intellectual Property Organization (WIPO). “WIPO was the place where international discussion and negotiations about IP was held” (Tansey 2006, 3). The reason WIPO failed because countries could choose to sign on to it if it wanted to, and the countries that wanted to were mostly developed countries that wanted an international IP structure that would protect their economic interests. The Trade Related Aspects of Intellectual Property was under established under the General Agreement on Tariffs and Trade (GATT) in 1994 in Geneva in the Uruguay Round (Nayyer 2002). GATT was replaced by the WTO and TRIPS agreement still holds. Under the TRIPS agreement every country that is a part of the WTO must adhere to the IP rules. International property encompasses everything from copyrights and patents to plant breeders’ rights and trade secrets. Therefore the enforcement of IP rights (IPR) under the TRIPS agreement means that every person must abide by them; from music producers to cheese and champagne (or sparkling wine) makers all the way to farmers and consumers who just want to download or burn a CD. Essentially, IPR’s and the TRIPS agreement is how the industrialized countries are combating the negative effects of globalization on their own economy. But what they do not account for is the political, economic and social harm it is creating for developing countries and infant economies.

Erosion of State Sovereignty

Each country under the WTO has no choice but to abide by the rules under the TRIPS agreement. The agreement has a tremendous impact on state sovereignty because domestic and economic policies are being compromised and overruled in order to abide by the rules set forth by the international body. The rest of the paper will focus on how domestic, economic and social issues are being compromised as a result of the TRIPS agreement.

Erosion of State’s Ability to Regulate Domestic Policies

International Property Laws under the TRIPS agreement is hurting the state’s ability to regulate domestic policies on many levels. For one the state’s ability to effectively deliver public goods, such as healthcare, is tremendously compromised. In AIDS plagued Africa, the TRIPS agreement makes it difficult for the states to provide medication for its citizens because the agreement makes generic drugs illegal and the primary drug is too expensive to come by. “The number of people living with HIV has risen from around 8 million in 1990 to 33 million today, and is still growing. Around 67% of people living with HIV are in sub-Saharan Africa” (UNAIDS/WHO 2008). Indirect problems will also result from the enforcement of IP laws. As more people die from AIDS because the government cannot provide medication, African leaders will have to address domestic issues such as an increase of orphans, a significantly reduced labor force, and a shrinking population in general. Since the pillar of a government is to be able to provide public goods to its citizens, the inability to address these issues will lead to a greater erosion of the state sovereignty.

Erosion of State’s Ability to Regulate Economic Policies

A major problem with TRIPS is how it comes to contradict state economic policies. The agreement reinforces monopolies in the world by restricting the flow of information from country to country. For example, Apple has the trademark and patent on the I Phone and no one else can produce anything like it without breaking IP rights. This creates a monopoly on I Phones by Apple. China has just developed the new Anti-Monopoly Law (AML), which took effect on August 1, 2008. I Phones are a monopoly because of the TRIPS agreement, but under China’s new AML monopolies are illegal. The law stipulates that it “does apply to action taken by undertakings that eliminates or restricts competition by abusing intellectual property rights” (Jones 2008, 3). This creates a discrepancy of whether the China should follow the WTO’s regulations or follow its own common law. If China follows the international regulations then its ability to regulate economic policy will be compromised.

Erosion of the Livelihood of People

Globalization has made many wealthy, but only a select few, while the rest are still left behind. The TRIPS agreement is the wealthy nations’ way of protecting their own interests even when harming developing nations. According to statistics from The Penguin Atlas of Women in the World, countries in Sub-Saharan Africa, Europe and Central Asia, Latin America and Caribbean, and the Middle East and North Africa are actually poorer in 1999 compared with 1990 (Seager 2003, 75). Aside from Europe, the rest of the countries are the ones that are hit the hardest by the TRIPS agreement because they are the low and middle income countries in the globalized world. Food and health are of the greatest concerns to people who have little access to both. A major reason why hunger is so prevalent in the world is due to these IP laws. Farmers must purchase terminator seeds from the industrialized world, but these seeds only produce one season of crops. These are the seeds that produce seedless watermelon and seedless grapes that you purchase at the local grocery store. The agreement also prevents people “from access to AIDS drugs in Africa to basic diagnostic techniques for screening breast cancer (Tansey 2006, 3).

What Leads to these Erosions?

As mentioned earlier, what leads to the erosion of state sovereignty, erosion of the state’s ability to regulate domestic and economic policies, and the erosion of the livelihood of people starts out with developed nations protecting themselves. IP laws turn public goods into private goods. It is like the kid in school who discovers a new game, but will not share the game unless you give him money. By developed countries protecting themselves, they are shutting those who cannot afford to pay for the patents out of the game. But what happens as these IP laws are enforced in developing countries is the country starts to lose sovereignty over the state because they have little to no power over domestic and economic policies, and the livelihood of the people suffers. What happens to the two kids with the game? The kid with the game will be richer if the other kid pays in order to play; that kid will receive the benefit of playing but he will lose out on eating lunch since he gave his lunch money away. If this continues, then we will see the trend that many developing countries face in the end, the kid will starve or use up all his money or both. What can happen is the teacher can put an end to it, but the problem with globalization and the TRIPS agreement is that the teacher, the WTO, is actually the one who set up the rules in the first place.

Although the example of the children in school is extreme and would probably not happen in real life, globalization and the TRIPS agreement is a reality for the 192 countries that signed onto the World Trade Agreement. The TRIPS agreement has more benefits to developed countries than it does to developing countries. State leaders understand the negative affects of the agreement, yet they continue to abide by these agreements. Why is that the case? The reason is very similar to why Mexico entered NAFTA, because they are looking at the long term gains. Maybe one day the kid who gave up all his lunch money will come up with his own game, and then he too can patent it and force others to pay to play with it.

Works Cited

UNAIDS/WHO. (2008) ‘Global HIV/AIDS estimates, end of 2007’, Avert, July, available at http://www.avert.org/worldstats.htm (6 November, 2008)

Jones, Paul. (2008) ‘Licensing in China: The New Anti-Monopoly Law, the Abuse of IP Rights and Trade Tensions’, Jones & Co, Toronto: Jones & Co, available at http://www.jonesco-law.ca/89/files/pdfs/PIP%20-%20LICENSING%20IN%20CHINA%20-%20v.4%202008-01-15.pdf (6 November, 2008)

Nayyer, Kim. (2002) ‘Globalization of Information: Intellectual Property Law Implications’, First Monday 7(1), available at http://www.firstmonday.org/issues/issue7_1/nayyer/ (6 November, 2008)

Seager, Joni. (2003) The Penguin Atlas of Women in the World, New York: Penguin Group.

Tansey, Geoff. (2006) ‘Global rules, patent power and our food future: controlling the food system in the 21^st century’, Institute for International Integration Studies at Trinity College, Dublin, Discussion Paper No.130, 23 February.

Wegner, Harold. (2006) ‘Globalization Hits Patent Law’, IP Frontline, 7 January, available at http://www.ipfrontline.com/depts/article.asp?id=8706&deptid=4 (6 November, 2008)