Inequality in the Knowledge-Based Economy

I’m working on a short article about this topic and was crunching some World Bank Development Index numbers today.

The payoff for you, dear reader, is the following factoid of the day:

From 2000-2008, approximately $97 out of every $100 earned internationally from licenses or royalties was paid to a high income OECD country. In contrast, Latin American and Caribbean countries combined to earn $0.005 (yes, one half of one cent) out of that same $100.

Got that? $97 vs. $0.0o5!

The moral of the story: cheap laptops and broadband are only the tip of the iceberg.

Eat your heart out ICT4D community.

Reinventing the IMF?

With the continued decline of financial markets and the threat of radical destablization throughout the Global South, I suspect that a consensus view that the IMF must step in to ensure the solvency of developing countries is already spreading quickly among the punditocracy and major news outlets.

The IMF (photo by Kyrion cc-by-nc-nd)

Given the weakened condition of wealthy states and corporations, the IMF will play a major role in any sort of multilateral bailout. Indeed the crisis presents an opportunity for the Fund to resurrect itself after a number of very, very bad decisions made in the Neoliberal 1980’s and 90’s finally came home to roost, bringing shame upon the organization and its ideas.

The question is what kind of an IMF will we get this time around? The critical work of Joseph Stiglitz, Ngaire Woods, and others has provided ample evidence that the Fund’s proclivities for anti-poor policies were not an accident, but a systematic result of the organization’s structure and culture.

Since 2002 (when such positions first gained widespread traction), there has been much talk of reform – a trend which will no doubt continue well past November’s Global Financial Summit – but precious little action.

The U.S. and Europe still retain a ridiculous share of the voting power within the IMF, World Bank, and the WTO, virtually guaranteeing that they will strong arm through whatever solutions they deem fit. While Ambassadors, Trade Representatives, and their ilk may talk a good game about promoting equality through increased multilateral liberalization, the bottom line is that truly equitable trade will not come about without a substantial sacrifice by the traditional “Great Powers” of the West. The recent trend of the U.S. and E.U. pursuing absurd schemes to evade accountability and transparency by undermining global forums also belies any rhetoric of good will.

Does the IMF have what it takes to bring about a true shift in the underlying structures of the global financial system? I doubt it, but it will be revealing to see just how hard Dominique Strauss-Khan (if he holds onto his job now that he has officially held onto his job despite a sex scandal) and his colleagues will try.

ACTA: bad for the innovation economy

Haven’t written about ACTA in a little while, but I couldn’t help myself from responding to this piece on the Intellectual Asset Magazine website.

Taking a short-term perspective shared by many large IP owning firms, the author Joff Wild argues:

My view is that countries in which IP is a very valuable asset are perfectly entitled to get together to work out ways in which it can be better protected.

The problem with this argument, and with much of the ACTA proceedings thus far, is that the countries involved have not integrated the competing interests of stakeholders into the negotiation processes in an effective way.

Even if you, like Joff, are not compelled by the claim that ACTA will be bad for global governance, bad for developing countries, and bad for global equality (which it almost certainly will), it is crucial to recognize that many of the most important and innovative firms in the U.S. and Europe are also likely to suffer from this agreement.

Don’t take my word for it, though.

Check out this letter recently submitted by AT&T, Amazon.com, Computer and Communications Industry Association (CCIA), Consumer Electronics Association, eBay, Information Technology Association of America, Internet Commerce Coalition, NetCoalition, US Internet Service Provider Association, US Telecom Ass., Verizon Communications, and Yahoo! Inc.

The letter is addressed to US Trade Representative Susan Schwab and leaves no doubt that these Telecom and IT giants do not appreciate the cavalier IP extremism on offer from the ACTA proponents thus far (all emphases are mine):

We appreciate your objective of protecting the intellectual property of American
rightsholders from infringement overseas. However…there is a very real possibility that an agreement that would require signatories to increase penalties for “counterfeiting” and “piracy” could be used to challenge American companies engaging in online practices that are entirely legal in the U.S., that bring enormous benefit to U.S. consumers, and that increase U.S. exports.

and later:

…because ACTA risks having such an adverse impact on intermediaries operating
in full compliance with U.S. law, the negotiating process should be as open and
transparent as possible.

and last but not least:

…given the importance and complexity of the issues under discussion, we urge you
to proceed with the negotiations at a more deliberate pace. It is critical that there be
sufficient time to ensure that the agreement is in the broad national interest.

Unless Schwab, the USTR office, and other negotiating parties recognize this reality soon, the results of their well-intentioned actions will be bad for the Internet economy, bad for innovative industries, and generally bad for society as a whole.

If, as Wild puts it, ACTA faces “a long and tortuous path to ratification” that might be the best news yet about this half-baked proposition.

New Zealand Releases A Few ACTA Documents

Mark Harris filed a request with the New Zealand Ministry of Economic Development (MED) to release all documents pertaining to the ongoing ACTA negotiations.

Here’s what happened:

The Ministry of Economic Development has released just 13 out of 91 documents relating to its negotiation of a controversial international Anti-Counterfeiting Trade Agreement (ACTA) after an official information request.

Consultant Mark Harris made a request for “any and all information” the MED holds on ACTA. In response, MED identified 91 documents falling within the ambit of the request. The department has supplied Harris with just 13 of these and some parts of most of have been withheld.

The disclosure was mostly denied because it is considered likely to “prejudice the entrusting of information to the Government of New Zealand on a basis of confidence by the government of any other country or any agency of such a government.”

I haven’t had a chance to look through the docs yet, but it will be very interesting to find out if there’s any new information.

The real question, of course, is what’s in the rest of those 91 documents and why can’t the negotiating parties be transparent about this process?

Monika Ermert on latest ACTA negotiations

Monika Ermert has filed another insightful piece on ACTA over at Intellectual Property Watch. She discusses the latest round of secret negotiations in Washington; compares the statements of the negotiating states on the progress of the agreement; and lays out a number of critical perspectives emerging from private industry and non-governmental groups that don’t trust a secret negotiation process to represent the rights, interests, and complexities of the many issues involved.

ACTA Surprise! More Secret Meetings (this time in D.C.)

I.P. Justice has linked to a freshly leaked memorandum addressed to “ACTA Negotiators” from unnamed “Business Associations.”

The memo articulates positions consistent with the draconian enforcement measures sought by many content owners throughout the furtive ACTA process. In both its scope and tone, it also resembles quite closely the earlier submissions of comments by groups such as the RIAA, the International Trademark Association (ITA), and others.

The memo underscores the extent to which these organizations expect that the wealthy governments of the world will foot the bill for enforcing their private rights. It’s my understanding that in U.S. law, the financial and legal burden of enforcement of private rights traditionally falls on the rights holder. I’m pretty sure that’s why the government isn’t usually the one to sue you if you trespass on your neighbor’s backyard. In the brave new world envisioned by these business associations, suspected infringement of copyrights or trademarks would be sufficient to justify search, seizure and other forms of state intervention.

From where I’m sitting, that sounds an awful lot like a seriously invasive form of corporate welfare.

However, the memo also reveals one detail that the United States Trade Representative, the Canadian government, the European Commission, and other negotiating parties have declined to make public: the negotiations for ACTA are continuing – in secret – right now in Washington, D.C.!

In off the record conversations with government officials, I had been led to believe that late July was a target date for the second round of ACTA talks. However, there has been some misdirection and sleight of hand about exactly when and where these meetings would happen.

Turns out the ACTA negotiators from the U.S. (presumably members of the Office of the U.S.T.R.) do not mind passing such information along to “Business Associations” in a more timely and open manner.

As an interested citizen who submitted my own comments to the USTR about ACTA back in March, I find the USTR’s preferential treatment of corporations who support ACTA irresponsible and reprehensible.

The terms of the proposed agreement are too important for the future of the digital economy, global trade, the Internet, and international legal precedent for the negotiations to continue in secret.

As I’ve said before, this is no way to build a “new consensus” on the governance of trade in informational goods. Instead, it is a shameless tactic to railroad bad policies based on flimsy evidence and dubious intent.

Australian Trade Officials Accept Comments on ACTA, Why Can’t USTR?

Thank you for your input!

I just got word that Australian trade officials are accepting comments on the next round of ACTA negotiations.

Predictably, their request for input from is inexcusably opaque. The announcement (link above) alludes to three topics: “border measures”, “civil enforcement”, and “institutional isssues” (I’m nominating that last one for the Max Weber Prize for lack of imagination by a bureaucrat).

Without more substantive public disclosure and debate of the topics under consideration in the ACTA negotiations, such public comments requests remain little more than a shadow play of actual democracy.

This is simply unacceptable given the scope of issues ACTA will address and their potential impact on the future of the Internet, the digital economy, global development, and law enforcement.

Small wonder, the Office of the US Trade Representative has not even bothered to request comments.

Hat tip: Kimberlee Weatherall

India’s Drug Controller May Be Participating in ACTA Discussions

From the Spicy IP blog:

Pursuant to our post lamenting the “secrecy” with which the ACTA (Anti Counterfeiting Trade Agreement) negotiations were shrouded, an anonymous source writes to inform us thus:

“I am afraid that the new Indian Drugs Controller General is being briefed about the Treaty , its objectives etc as he has been (unlike any before him) invited to Canada and USA. The Indian Govt has become too inward- concerned to worry about these “conspiracies” concerning IP treaties from the West!”

SpicyIP hasn’t verified this news as yet–but if any of our readers have more information on this, please let us know.

Looks like our DCGI (Drug Controller General of India), Dr Surinder Singh is a hot favourite in the international IP circles now. Not least because he’s been very enthusiastic about framing rules to link up drug regulatory approval with patents. Except that he forgets that there exists something called the Constitution of India, under which any overstepping of statutory bounds is likely to be challenged by a writ petition and struck down by a court!

I have nothing to add to the tip received by Spicy IP, but I would add that the USTR and EC briefing “interested observers” is far from surprising given the ACTA negotiants stated aim to extend the treaty to “interested trade partners” once it’s signed.

Have other officials from non-participating states been briefed on the agreement?

ACTA and the Threat to Credible Global Governance

I’ve recently heard through a grapevine that ACTA negotiants have reportedly signed non-disclosure agreements as a condition of their participation in this week’s secret closed-door meeting in Geneva.

This is an amazing and frightening step backwards in the history of global governance. It also epitomizes the ACTA negotiants’ dismissive attitude towards the importance of credible, transparent trade policy-making in the current global environment.

Anyone who would seek to radically transform the world’s trade in intangible assets without the participation of most of the world’s governments has learned little from the Asian Financial Crisis, the Iraq War, or the ongoing real estate and credit catastrophe.

Globalized trade and markets demand globalized governance arrangements in order to avert all manner of failures and shocks. In order to be effective, global governance requires the participation and commitment of all of the major world economies. Without this, ACTA will never attain legitimacy. In addition, it will further alienate the leaders of the world’s fastest-growing economies (Brazil, Russia, India, China, and South Africa – the so-called BRICS) and will reinforce their sense that the wealthy states of the Global North deserve neither respect nor legitimacy in future global governance arrangements. From a strategic, long-term perspective, this does not promote the interests of the United States, Europe, or any of the other ACTA participants. Instead, it merely perpetuates an historical power inequality whose days are numbered.

If today’s wealthy nations wish to have a prayer at negotiating with the world’s largest economic powers twenty, or even ten years from now, they had better learn to play by some more inclusive and democratic rules.

ACTA Proposal Leaked: Confirms Wealthy States Trying to Evade Consensus; Impose Strict Enforcement

Fresh off the presses from Slashdot and Wikileaks: the “discussion paper” on the proposed “Anti-Counterfeiting Trade Agreement” (ACTA) that has circulated among wealthy trademark and copyright owning states (as well as a select group of industry lobbyists) has just reached the public. Here’s the description attached to the document by an anonymous Slashdot reader:

“The proposal includes clauses designed to criminalize the non-profit facilitation of copyrighted information exchange on the Internet, which would also affect transparency sites such as Wikileaks. The Wikileaks document details provisions that would impose strict enforcement of intellectual property rights related to Internet activity and trade in information-based goods. If adopted, the treaty would impose a strong, top-down enforcement regime imposing new cooperation requirements upon Internet service providers, including perfunctory disclosure of customer information, as well as measures restricting the use of online privacy tools.”

All very true. In fact, the implications of the agreement reach even further – threatening the business interests of firms in innovative, knowledge-based sectors of the economy by imposing overly-harsh restrictions and enforcement measures. This would likely exacerbate the chilling effects of existing restrictions that have brought American and European corporations numerous defensive patent suits, bogus trademark infringement claims, etc.

The USTR and its trading partners have no business supporting a proposal like this. ACTA threatens citizens’ rights, businesses interests, and would create unnecessary layers of bureaucracy and state intervention. It should never be signed.