International Transfer Technology Agreements: New Age of Negotiation

Abstract

Over the past three decades, technology transformation to developing countries has become one of the most controversial issues in international economic relations. However, concerns have been raised by several hosting countries about the nature of transformation agreements. It has been asserted that developing countries were underprivileged in the technology market, as the conditions in transformation agreements were unfair and oversold. Hosting countries are keen to reform what they have considered as the main limitations during the 1970s and the 1980s. This article argues that although the position of developing countries was weaker in transfer technology negotiations in the past, this situation has changed due to several elements, such as changes in the nature of the technology required, the increase in the competitors’ numbers, the legislation development in hosting countries, the effect of the financial crises, the MNE’s needs to relocate its research and development centres, and the high possibility of acquiring technology without direct agreement. The article further addresses the primary clauses that should be included in a transfer technology contract.

Keywords: technology transformation, international negotiation, developing countries