Trade and Intellectual Property Rights in the Agricultural Seed Sector

Abstract

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has continued to be fiercely debated between North and South, particularly with respect to its provisions for the agricultural sector. Article 27.3(b) of the TRIPS Agreement requires WTO member countries to offer some form of intellectual property protection for new plant varieties, either in the form of patents (common in the U.S.) or plant breeder's rights (PBR). This paper analyses the effects of the introduction of PBRs in almost 70 importing countries on the value of exports of agricultural seeds and planting material from 10 exporting EU countries, including all principal traditional exporters of seeds, as well as the US. A fixed effects quantile regression model, based on the general specification for the gravity model for international trade, is estimated using panel data covering 19 years (1989-2007) of export flows in order to assess the effect of International Convention on the Protection of New Varieties of Plants (UPOV) membership on seed imports. Basing inference on the panel bootstrap, we find no significant effect from UPOV membership on seed imports.

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

“…These results stand in clear contrast to the earlier work of Yang and Woo () and Eaton () who found no evidence for importing country membership in international IPR agreements affecting seed trade, although it should be noted that while they both used export gravity models, their samples and the econometric methods applied were quite different. Yang and Woo (), using both panel and time‐series econometric methods, focused on the impact of UPOV and TRIPs membership for a sample of 60 countries over the period 1990–2000, while Eaton (), using a fixed‐effects quantile regression model, focused on the effect of UPOV for a sample of 70 countries importing seeds from both United States and 10 EU countries.…”

“…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.…”

“…Among the previous studies of seed trade, Yang and Woo () chose not to include any such index in their empirical analysis, including instead a set of dummy variables capturing the level of economic development of seed importing countries in their sample, which assumes that higher development levels are correlated with stricter enforcement of IP. 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.…”

Intellectual Property Rights and International Trade of Agricultural Products

“…They found that whether or not a country adheres to IPRs agreements has no impact on planting seeds imports. 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.…”