Do stronger intellectual property rights promote seed exchange: evidence from U.S. seed exports?

Abstract

With increased private investment in crop breeding research in the developed world, intellectual property rights have gained importance in seed sector. Trade Related Aspects of Intellectual Property Rights (TRIPS)-plus provisions included in recent free trade agreements between the developed and developing countries show a tendency of the developed world to impose their high standards for protection of plant intellectual property on the developing world. While stronger intellectual property rights can increase international exchange in seed, market power effect can lead to a reduction in exports of seed to foreign markets. This article estimates the impact of intellectual property rights on U.S. seed exports. The estimation is performed at a crop level using Heckman selection model. The results reveal that the impact of intellectual property rights varies across different types of crops-open-pollinated, genetically modified, and hybrid crops. While TRIPS provisions are important to facilitate transfer of genetically modified crops, they play a minor role for open-pollinated and hybrid crops. The results also show that plant breeders' rights envisioned by the UPOV system can be important to promote seed exchange when proper mechanisms are put in place to enforce these rights.JEL classification: F13, O34, Q17

Intellectual Property Rights and International Trade of Agricultural Products

“…In line with these results, Eaton (2013) found no evidence that adopting plant breeders' rights benefits seed imports. Galushko (2012) has challenged this evidence concluding that stronger IPRs can foster international seed exchange.…”

“…In the agricultural sector, the analysis must also consider some distinct features. Also, most of the empirical literature concentrates on trade flows of manufacturing products and a few empirical studies on the agricultural sector analyze the effect of IPRs on specific products, such as seeds, see for example: Yang and Woo (2006), Galushko (2012), and Eaton (2013). Considering the relevance of both trade and IPRs on the agricultural sector, our study contributes to the empirical analysis of the relation between IPRs and agricultural trade.…”

The role of intellectual property rights in seed technology transfer through trade: evidence from U.S. field crop seed exports

“…Previous studies of trade in manufactures have found IPRs to have a positive effect on exports, for example, Maskus and Penubarti (), Smith (), and Ivus (), while Campi and Dueñas () found that stronger IPRs have had a negative effect on trade in agricultural products. In the case of seed trade, Yang and Woo () and Eaton () both failed to detect a statistically significant effect of IPRs, while Galushko () found the positive impact of IPRs varied across different groups of crops. The current article builds on these previous studies by utilizing a larger data set and focusing on field crop seeds that include seeds susceptible to IPR infringement.…”

“…In contrast, Eaton () used an index for the strength of IP protection compiled by the Economic Freedom of the World database produced by the Fraser Institute (Gwartney et al., ), although he found no statistically significant impact for this index on seed trade. Galushko () also included a dummy variable for high‐income importing countries in her sample, but in a footnote she indicates the “Rule of Law” indicator included in the World Bank's Worldwide Governance Indicators (WGI; Kauffman et al., ) was also used. Galushko () found that the latter variable was highly correlated with the dummy variable for high‐income countries, her estimation results proving robust to using either measure of property rights enforcement.…”

“…Galushko () also included a dummy variable for high‐income importing countries in her sample, but in a footnote she indicates the “Rule of Law” indicator included in the World Bank's Worldwide Governance Indicators (WGI; Kauffman et al., ) was also used. Galushko () found that the latter variable was highly correlated with the dummy variable for high‐income countries, her estimation results proving robust to using either measure of property rights enforcement.…”