The Least developed countries' TRIPS Waiver and the Strength of Intellectual Property Protection

Members of the World Trade Organization (WTO) have accorded many flexibilities to the least developed countries (LDCs) in the WTO's Trade-Related Intellectual Property (TRIPS) Agreement. A major LDC-specific flexibility in this Agreement that other developing country Members of the WTO do not enjoy has been the general transition period for the implementation of the Agreement, in view, inter alia, of their need for flexibility to create a viable technological base. The present article investigated whether this LDC-specific Waiver in the TRIPS Agreement genuinely helped LDCs reduce the strength of their Intellectual Property Protection (IPR), as expected. The analysis was carried out using the Difference-in-Difference framework, along with the within fixed effects and the 'Quantile via Moments' estimators. The panel dataset contains 24 LDCs (treatment group) and two control groups, over the period from 1970 to 2015. The first control group (the main one in the analysis) included 15 countries that had not been in the LDC category, but would not have met the criteria for graduating from the category of LDCs if they were included in the category. The second control group, used for robustness check, included 9 low-income countries that yet, were not LDCs, but were eligible to the Poverty Reduction and Growth Facility of the International Monetary Fund. The empirical analysis has established that the TRIPS Waiver was instrumental in reducing the IPR levels in LDCs, and LDCs that had lower IPR levels (i.e., those located in the lower quantiles) enjoy larger reductions in IPR levels, thanks to this Waiver. Moreover, the effect of the TRIPS Waiver on LDCs' IPR levels depended on LDCs' duration of the membership in the WTO, as well as on their level of innovation-driven export variety, measured by their level of export product concentration or alternatively their degree of economic complexity.