Reaping What You Sow: An Empirical Analysis of International Patent Harmonization
University of California Department of Economics Working Paper No. 454
47 Pages Posted: 20 Mar 2000
Date Written: December 1999
This paper extends analysis of the GATT Uruguay Round by quantifying the impact of international patent harmonization as implied by the TRIPs agreement. What emerges is a picture of patent protection as an important method for appropriating the rents of an invention. On this basis patent harmonization has the capacity to generate large transfers of income between countries, the US being the major beneficiary. While developing countries are major contributors to these transfers, Canada, UK and Japan also make sizable contributions. These transfers significantly alter the perceived distribution of benefits from the Uruguay Round, with the US benefits substantially enhanced, while those of developing countries and Canada are considerably diminished. Furthermore, the increase in dead weight loss from higher standards of patent protection undermines the aggregate benefits of the Uruguay Round package, with the increase in dead weight loss amounting to as much as one fifth of the efficiency gains from trade liberalization.
JEL Classification: O34
Suggested Citation: Suggested Citation