The transfer of technology to Latin America has taken place through both the licensing process and direct investments by foreign enterprises that are often transnational corporations. National law has concerned itself first with the creation of rights in technological knowledge and the protection of these rights by law. The regulation of these rights as set out in contractual relationships and the regulation of direct investment, particularly the technological component thereof, were dealt with thereafter. Other matters such as the repatriation of profits (exchange control), customs controls, and various taxes have also become a part of the national regulatory scene today.
This paper focuses on the contractual acquisition of foreign technology through licenses and other contractual arrangements as contrasted with the technological components in the usual direct investment. Such investment is made either in the form of the wholly-owned subsidiary of the transnational corporation or as part of a joint venture. The use of technology as a major component of direct investment has been discouraged over the years, although this trend was reversed in Chile after 1977.
The state's involvement in the technology transfer process has made it an active and sometimes dominant participant in the negotiation of the contract, the evaluation of the technology and the agreement transferring it, the approval of the agreement, and the monitoring of its performance. Over a period of decades such regulation has evolved from rules primarily related to the payment of royalties and to rules and regulations addressed to the entire process of the transfer of technology. Brazil and Colombia were among the first of the eight or nine Latin American countries with currently operational regimes to evolve from the pre-regulatory system to a modern system.
The Transfer of Technology to Latin America
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