In Support of the TRIPS Agreement

• Main Authors: JAKOBSSON, Amanda, Segerstrom, Paul S.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: Multinational Firms; North-South Trade; Intellectual Property Rights; Foreign Direct Investment; Product Cycles; Economic Growth; Economics; Intellectual Property Law; International Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/1573; https://ink.library.smu.edu.sg/context/soe_research/article/2572/viewcontent/JakobssonSegerstrom_2012.pdf
• Institution: Singapore Management University

This paper challenges the conventional wisdom that the TRIPs agreement is bad for developing countries. We present a dynamic general equilibrium model of North-South trade that allows us to study the implications of stronger intellectual property rights (IPR) protection and simultaneous trade liberalization. In our model, stronger IPR protection in the South (TRIPs) leads to more innovation in the North, more technology transfer to the South and higher long-run southern consumer welfare. The South also benefits from trade liberalization but the welfare gains from TRIPs are considerably larger.