Perspectives from Law, Economics and Political Economy
New Horizons in Intellectual Property series
Edited by Meir Perez Pugatch
Chapter 2: The TRIPS Agreement: The Damage to the WTO
Brian Hindley INTRODUCTION The WTO presumably exists to increase world economic welfare. It follows that its rules and processes should be structured to ensure that the outcomes of negotiations between its members achieve that end – or, at worst, can plausibly be claimed to achieve it. From that standpoint, the TRIPS agreement represents a failure of the negotiating processes of the GATT, the predecessor of the WTO, which in this respect operated in a similar way to the WTO. The claim that the TRIPS agreement increases world welfare rests on foundations that are much too shaky to support an agreement so strong and prescriptive. The belief that the TRIPS agreement creates, or will create, a transfer of substantial wealth from the residents of poor countries to the residents of rich countries has a much ﬁrmer basis. That transfer of wealth plays a major role in justifying the suspicion with which developing countries now view the WTO, a suspicion that has plagued that institution from Seattle to Cancun, and which its supporters should deeply regret. In what follows, I elaborate on these propositions. I then turn brieﬂy to the questions of what can be done and what should be done. ECONOMIC CASE FOR PATENTS There is a broad range of intellectual property rights. They serve diﬀerent purposes and oﬀer diﬀerent ownership rights, and each therefore requires its own analysis. In this chapter, in the interests of brevity, I shall discuss patents. Much of the analysis applies without great...
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