A Study on the ROK-US Intellectual Property Rights Agreement (1986)

Abstract

This study examined the process by which the protection of intellectual property rights (IPRs) became a central issue in the international trading system, from the initial stages of the Cold War, through détente to the mid-1980s, when the Cold War system began to collapse. This study tried to reinterpret the Cold War from the perspective of the evolving international trading system, paying attention to how technological development, competition and control affected the Cold War system, and what role the IPR system came to play in the process. The study proposes a mechanism that assumes a dynamic relationship between the discourse and institutionalization. At key historical moments, discourses are institutionalized, through domestic and international political processes, as policies and legal texts to be implemented subsequently. If the practices that result from the implementation accumulate sufficiently, a new perception about the reality emerges, leading to new sets of discourses. For the purpose of this analysis, historical documents that summarize the perception of the policymakers are thought to embody the major discourse of the time. This study selected discourses that were important in shaping the history of IP during the Cold War including the discourse of containment (mid-1940s ~ mid-1960s), détente (mid-1960s ~ mid-1970s), discourse on economic security (late 1970s ~ early 1980s), international competitiveness discourse (early 1980s ~ ), and the Intellectual Property discourse (mid-1980s ~ ). Each discourse, as embodied in these historical documents, will be analyzed, paying attention to the historical background of their formation, and their impact on subsequent institutions and practices. During the containment period, the US government sponsored the rapid accumulation of intellectual capital. During détente, intellectual property (IP) became a diplomatic resource that precipitated the economic exchanges between the East and West, and led to the recognition of the economic and security value of knowledge. As East-West trade during détente intensified, new discourses began to emerge. The denial approach argued that the duality of technology, especially advanced technology, might result in increased security and economic capability of the Soviet Union, posing a long-term threat to Western security. It further argued that the Wests superior economic and technological power needed to be used as a leverage to bring about changes in the international behavior of the Soviet Union. On the other hand, the laissez-faire approach argued that the newly emerging techno-economic space in East-West relations need to be expanded, and should be governed by market-based approaches. Until then, IPRs were more of a bargaining chip that promoted the exchanges and dissemination of technology in the US due to the enforcement of strong anti-trust laws. Internationally, active international technology transfer occurred within the Free World, due to US post-war diplomacy aimed at reconstructing the economies of its allies and establishing technological infrastructure. As a result, Japan and East Asian NICs experienced a rapid catch-up of technological capacities, which began to be pronounced from the mid-1970s. The international competitiveness of Western industry began to decline relative to Japan, and Western economies began to strengthen the international competitiveness of their industries by changing trade and technology policies, including IPR-related policies. The year 1979 became the turning point whereby discussion of economic issues became the dominant discourse in America. As Japan arose as a fierce competitor to US industry from the late 1970s in consumer electronics and advanced technology goods, the economic issue dominated the 1980 US presidential election. President Reagan regarded international competitiveness as a high priority in his administration. Lively discussion about competitiveness ensued, and in 1985, the Young Commission Report was published after an extensive discussion among policy makers and opinion leaders in various fields. As the reports subtitle Global Competition: The New Reality suggests, the report redefined the new reality of the international political economy from the point of view of a market-based approach. Domestically, the US began to enact various policies to strengthen industrial competitiveness. Internationally, Japan and East Asian NICs began to be pressured to refrain from dumping their products in the American market, further open up their markets, and play a more productive role in US-initiated discussions in the international arena. These discussions were published in various reports and policy announcements from around 1985. In addition to the publication of the Young Commission report and the announcement of the Plaza Accord, the establishment and implementation of American trade strategy was a notable step forward. According to the new strategy, the US government would launch a new negotiation round within the GATT framework with an aim to forge a new multilateral trading system. Protection of American IPRs, which it regarded as the source of American competitiveness, would be included as a high priority agenda item. According to the plan, America would pursue negotiations bilaterally, and multilaterally, to promote IPRs in the global trading system. The US-ROK IPR Agreement, which began in earnest with the initiation of the Section 301 investigation of Korean IPRs by the USTR, was an important stepping stone in the US effort to strengthen IPRs in the global trading system. The following section will examine the international competitiveness discourse and its institutionalization in the US and in the global trading system. The process of negotiations that led to the conclusion of the US-ROK IPR Agreement has been analyzed using the framework of the two-level game, characterized by the intergovernmental negotiation (Level I), the governments negotiation with domestic political actors (Level II), and the exchange of influences between international actors and domestic actors (Reverberation). The negotiation process was analyzed using the ESTN two countries model that examines how the competing discourses converge in the final agreement, and how the process interacts with the domestic politics of Korea. The bilateral IPR negotiations reached a turning point when the USTRs Section 301 case was initiated in November 1985. Therefore, the study understood the negotiation process moves on to Phase 2, after the 301 investigation was launched. Phase 1 commenced from 1981 to October 1985, when US requests for increased Korean protection of IPRs, including the rights for computer software, copyrights and process patents, began to be made more systematically. During this period, the Korean government was reluctant to respond with concrete action due to huge domestic political costs. Phase 2 was from November 1985 to July 1986, a period that began with the initiation of USTRs investigation of unfair trade practices under Section 301, until the final conclusion of the US-ROK IPR Agreement. The domestic political, economic and legal impact of the Agreement and the international consequences were examined. Shortly after the US-ROK IPR Agreement was reached, GATTs 8th Round of multilateral trade negotiation, i.e. the Uruguay Round was initiated in Punta del Este, Uruguay. IPR issue was included as the GATT agenda. In the subsequent seven and a half years of multilateral negotiations, the Korean governments position was significantly affected by its domestic legal infrastructure induced by the US-ROK IPR Agreement. The conclusion US-ROK IPR Agreement had the following effects on the IPR negotiation during the GATT Uruguay Round. First, the US-ROK IPR Agreement was the first instance of an international agreement on IPRs concluded in the context of trade dispute involving unfair trade practices. As such, it became a touchstone for establishing the IPRs relationship with trade. Second, the Agreement showed the US commitment toward the IPR issue by suggesting that it would be willing to initiate the Section 301 process if necessary. An agreement to improve protection of patented and copyrighted works would attempt to lengthen patent terms, increase the patent protection for such goods as chemicals and pharmaceutical compounds, and extend copyright protection to computer software. In addition, it would create a dispute settlement mechanism to litigate contentious bilateral issues. This multilateral approach would supplement bilateral efforts by the US to improve protection in these areas. For the US, the strategy in successfully concluding the US-ROK IPR Agreement, namely, the bilateral negotiation in the context of Section 301 investigation would become a model for the subsequent negotiations with developing countries, either bilaterally, or in multilateral fora. Third, by strengthening Korean protection of IPR, the Agreement changed Koreas negotiating strategy in the Uruguay Round TRIPs negotiation. Korea played a more active role in mediating the developed and developing countries in the formation of the IPR regime. Such efforts tried to reconcile the conflicting positions along the North-South divide, making the negotiation process more multipolar and multilateral. In conclusion, it can be argued that the US-ROK IPR Agreement was a case in which the US utilized Koreas international status as the model for developing countries in its efforts to strengthen IPRs in the multilateral trading system. From the ROK point of view, the US-ROK IPR negotiations were a process by which it sought to minimize the political and economic costs of the Agreement, while fulfilling the role expected of it as a trading nation and adapting to the changing global system for IPR protection. In the history of global trading system in the latter half of the 20th century, the rise and establishment of IPRs was the central feature of the changing technological and trade environment and went hand-in-hand with the evolving economic and security landscape of the Cold War. The discourse concerning IPRs gradually replaced the Cold War ideological competition as the new ideology and principle of the era of globalization.