The Economic Effect of the Intellectual Property Obligations in Free Trade Agreements
50 Pages Posted: 19 Jul 2012
Date Written: May 1, 2012
To date, there has been little empirical study to date of the effect that TRIPS-Plus intellectual property protection required by American free trade agreements has had on the economies of our trading partners. This paper examines data on foreign direct investment, licensing, employment, sales, and exports from three countries – Guatemala, Peru, and Nicaragua. Data is observed at the national and the firm level before and after each country strengthened its intellectual property laws (and demonstrated active enforcement of them) in order to comply with trade agreements. It suggests that implementation of the intellectual property provisions in FTAs by developing countries has had positive effects in some countries and in some industries. However, it does not support broad statements that intellectual property rights will necessarily lead to foreign direct investment, technology transfer, more and better employment, or growing exports.
Keywords: Intellectual Property, Foreign Direct Investment, Licensing, Employment, Innovation, Growth
JEL Classification: O34, O40
Suggested Citation: Suggested Citation