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The TRIPS Disagreement: Should GATT Traditions Have Been Abandoned?

Author

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  • Gaisford, James D.
  • Richardson, R. Stephen

Abstract

The world standards for patents and copyrights established by the Agreement on Trade-Related Intellectual Property Rights (TRIPS) have been controversial from their inception. This article establishes parallels between cooperative increases in the duration of intellectual property protection and cooperative reductions in tariff protection. Whereas a country’s tariffs lead to unintended harm to other countries, its intellectual property protection generates unintended benefits. The long-established GATT principle of trade liberalization has traditionally achieved mutual gains for countries of all types through symmetric tariff rate cuts that result in different final rates. By contrast, the TRIPS agreement created the likelihood of losses for developing countries by requiring asymmetric increases in patents and copyrights to establish common worldwide standards. The technical annex to this paper formalizes the analysis with a simple model of “North-South” patent protection. Sample calculations suggest a decline in the net benefits from innovation in developing countries in the order of 40 percent.

Suggested Citation

  • Gaisford, James D. & Richardson, R. Stephen, 2000. "The TRIPS Disagreement: Should GATT Traditions Have Been Abandoned?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 1(2).
  • Handle: RePEc:ags:ecjilt:23839
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    References listed on IDEAS

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    1. Diwan, Ishac & Rodrik, Dani, 1991. "Patents, appropriate technology, and North-South trade," Journal of International Economics, Elsevier, vol. 30(1-2), pages 27-47, February.
    2. Deardorff, Alan V, 1992. "Welfare Effects of Global Patent Protection," Economica, London School of Economics and Political Science, vol. 59(233), pages 35-51, February.
    3. Richard Gilbert & Carl Shapiro, 1990. "Optimal Patent Length and Breadth," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 106-112, Spring.
    4. Subramanian, Arvind, 1991. "The international economics of intellectual property right protection: A welfare-theoretic trade policy analysis," World Development, Elsevier, vol. 19(8), pages 945-956, August.
    5. Paul Klemperer, 1990. "How Broad Should the Scope of Patent Protection Be?," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 113-130, Spring.
    6. Helpman, Elhanan, 1993. "Innovation, Imitation, and Intellectual Property Rights," Econometrica, Econometric Society, vol. 61(6), pages 1247-1280, November.
    7. Johnson, William R, 1985. "The Economics of Copying," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 158-174, February.
    8. Suzanne Scotchmer & Jerry Green, 1990. "Novelty and Disclosure in Patent Law," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 131-146, Spring.
    9. Maskus, Keith E. & Penubarti, Mohan, 1995. "How trade-related are intellectual property rights?," Journal of International Economics, Elsevier, vol. 39(3-4), pages 227-248, November.
    10. Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 3-27, Winter.
    11. Markusen, James R., 2001. "Contracts, intellectual property rights, and multinational investment in developing countries," Journal of International Economics, Elsevier, vol. 53(1), pages 189-204, February.
    12. M. Scott Taylor, 1993. "TRIPS, Trade, and Technology Transfer," Canadian Journal of Economics, Canadian Economics Association, vol. 26(3), pages 625-637, August.
    13. R. Stephen Richardson & James D. Gaisford, 1996. "North-South Disputes over the Protection of Intellectual Property," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 376-381, April.
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    Cited by:

    1. GianCarlo Moschini, 2003. "Intellectual Property Rights and the World Trade Organization: Retrospect and Prospects," Center for Agricultural and Rural Development (CARD) Publications 03-wp334, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Kerr, William A., 2008. "Trade Agreements: The Important Role of Transparency," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 9(1).
    3. Gaisford, James D., 2002. "Agricultural Biotechnology and the FTAA: Issues and Opportunities," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 3(2).
    4. Ivus, Olena, 2010. "Do stronger patent rights raise high-tech exports to the developing world?," Journal of International Economics, Elsevier, vol. 81(1), pages 38-47, May.

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