Edited by William A. Kerr and James D. Gaisford
Chapter 15: Trade-related Intellectual Property Rights, Trade Flows and National Welfare
15 Trade-related intellectual property rights, trade ﬂows and national welfare Olena Ivus Introduction The protection of intellectual property rights (IPRs) is one of the most controversial issues in today’s global economy. There is a vigorous ongoing debate about the strength of national systems of patent and copyright protection that is of considerable importance. Proponents of more stringent protection argue that diﬀerences in IPRs protection constitute a form of non-tariﬀ barriers to trade in products containing a patentable innovation and that lax patent systems of many developing countries represents blatant free-riding, which distorts natural trading patterns and reduces the ability of ﬁrms to transfer technology abroad. Proponents of less stringent protection argue that strengthening global IPRs will bestow market power on inventing ﬁrms, thus enhancing the proﬁts of the monopolistic foreign ﬁrms at the expense of domestic welfare and would constitute a barrier to legitimate trade in imitative products (Taylor 1993; Gaisford and Richardson 2000). The continuing debate over the role of IPRs in trade, growth and development has resulted in numerous initiatives through international organizations to harmonize, strengthen and broaden the level of protection for IPRs all over the world. One outcome of multilateral negotiations was an agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of 1994, which was approved as a part of the Uruguay Round that established the WTO. The TRIPS provides minimum standards on IPRs for all WTO members. The growing importance of the issue of IPRs has resulted in a proliferation of empirical...
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