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

Difei Geng and Kamal Saggi

Chapter 27 in Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, 2023, pp 617-635 from World Scientific Publishing Co. Pte. Ltd.

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.

Keywords: International Technology Transfer; Multinational Firms; Trips; Foreign Direct Investment; Oligopolistic Competition; Vertical Contracts; Intellectual Property Rights (search for similar items in EconPapers)
JEL-codes: F21 (search for similar items in EconPapers)
Date: 2023
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