Globalisation, NASCAR, and Medicines
Two very interesting posts from the International Economic Law and Policy Blog caught my eye.
In Globalization of NASCAR, Simon Lester comments on the first ‘foreign’ car entry into the US sport of NASCAR — Toyota. For those of you unfamiliar with the sport, NASCAR has heretofore been limited (by tradition rather than explicit rules) to teams racing cars built by American based companies.
He points out that the responses to the negative reaction from NASCAR fans over a foreign car entry is that the modern Toyota is more American-built than many Chevys or Fords. He then contrasts the popular arguments surrounding with the rules set forth in GATS:
So is Toyota “foreign”? One of my first thoughts on reading all this was, hey, this reminds me of GATS Article XXVIII(m) and the Canada - Autos case, which also dealt with foreign ownership in the car industry. There, the panel found that the Canadian subsidiaries of DaimlerChrysler and Volvo were “juridical persons” of the United States because they were controlled by a U.S. parent (DaimlerChrysler Corporation and Ford Motor Co., respectively) (The panel considered it irrelevant that DaimlerChrysler Corporation may in turn be controlled by another person). See paras. 10.257, 10.259.
It’s interesting to compare the GATS approach with the issues discussed in the newspaper articles quoted above. In the newspaper articles, it was often mentioned that Toyota makes a lot of cars in the U.S. (and that Ford and Chevy make some abroad). In the GATS, by contrast, issues of legal incorporation and control are key. There is some appeal to the less formalistic approach, though (focusing on questions like, where does the company operate? Where are its employees? Where are its sales?).
In doing research for the Free Trade and IT-based businesses project, a constant theme in much of the literature is that the expansion of increased IP rights into developing countries is for the main benefit of foreign rightsholders. Lester’s discussion reminded me that it is important to look for the full economic affects and not just that the rightsholders were foreign. Perhaps there are additional areas where these countries benefit.
And in Health, Globalization, and Bargaining, Joel Trachtman discusses Indonesia’s recent actions in regards to avian flu samples. Indonesia refused to give over samples of the virus without an agreement that any vaccines resulting from these samples would be offered to Indonesia on affordable terms. When discussing the ‘property right’ that Indonesia has to the samples, he states:
This property is more valuable than samples of germs for purely tropical or indigenous diseases. Why? Because of globalization. Bird flu seems more mobile than other tropical diseases. So Indonesia’s property has a dual externality. It can harm outsiders, and at the same time if others are given access to it in a timely way in order to allow production of a vaccine, it can help outsiders. Actually, the most fascinating thing here is that the positive value is proportional to the magnitude of the potential negative externality. So, in a sense, Indonesia has an incentive to grow this bird flu as virulent and mobile as possible, and to hold closely the formula for the vaccine.
Not that he suggests that Indonesia would actually attempt to create a more ‘virulent and mobile virus’ but it is important to note that he places TRIPs as the logic behind this incentive:
Did TRIPS bring about these incentives? In a way, it appears that it did. By providing for global protection of intellectual property rights, it allows the creation of vaccines to be private goods instead of public goods. … The vaccine would be protected by TRIPS, so TRIPS has increased the incentives for Indonesia to withhold the samples.
This incentive is similar to the discussions surrounding traditional knowledge. One aspect of the traditional knowledge debate is whether or not patients should have a property right to genetic samples (such as blood and tissue samples). Seems like the Indonesia case is a much larger scale version of a debate that has been going on in other areas.
