Intellectual Property Rights and International Trade of Agricultural Products

The signing of the agreement on Trade-Related Aspects on Intellectual Property Rights (TRIPS) had led to a process of global harmonization and tightening of intellectual property rights (IPRs) systems. As part of this process, the use of IPRs in agriculture has been increasing in the last decades. This paper studies the effect of intellectual property rights on agricultural trade, for the post-TRIPS period (1995–2011), using a new yearly index of IPRs, for 60 developed and developing countries. We study the effect of stronger IPRs on total trade, bilateral trade, and trade margins using different econometric techniques. We found that the strengthening of IPRs has been having a negative and uneven effect on agricultural trade at different levels of disaggregation. The gravity estimation showed that both the IPRs of the importer and the exporter have negative effects on total bilateral trade and that the probability of creating new bilateral trade links increases with the importer’s IPRs. Finally, we found that stronger IPRs have a negative effect on the intensive margin of trade and a positive impact on the extensive margin. Overall, the evidence shows that agricultural trade related to the developing world has been more negatively affected, which calls the attention to the idea that a common system can equally work for all countries.