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Tariff barriers and the protection of intellectual property in the global economy

In: Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy

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  • Difei Geng
  • Kamal Saggi

Abstract

This paper develops a simple two-country model of quality-improving innovation to study the role tariff barriers play in shaping the welfare impact of global patent protection. We show that international patent policy coordination via national treatment is desirable only if tariff barriers between countries are sufficiently low. Furthermore, if countries are free to impose their optimal tariffs on one another, requiring national treatment in patent protection unambiguously lowers world welfare. Hence, constraining tariffs helps pave the way for international coordination over patent protection. This insight provides a potential rationale for the historical sequencing of policy reforms observed in the global trading system: multilateral rules on intellectual property were adopted only after decades of trade negotiations had succeeded in substantially reducing global tariffs.

Suggested Citation

  • Difei Geng & Kamal Saggi, 2023. "Tariff barriers and the protection of intellectual property in the global economy," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 27, pages 617-635, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789813233027_0027
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    3. Xingtang Wang, 2023. "Who is more aggressive under vertical product differentiation?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 608-618, January.
    4. Difei Geng, 2024. "Tariffs, product standards, and national treatment at the WTO," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1105-1133, July.

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    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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