Patents and Technology Transfer Through Trade and the Role of Regional Trade Agreements

Abstract

Regional trade agreements can have powerful impacts on technology transfer (TT), primarily through their effects on trade in high-technology goods and services, foreign direct investment (FDI), and licensing, all of which are key channels of information diffusion. In that context, regional trade agreements (RTAs) and mega-regionals such as the TPP embody considerable promise for direct expansion of TT, if primarily within the agreement. Moreover, recent econometric evidence largely finds that each of these flows responds positively to strengthened patent laws and other intellectual property rights (IPR), though this conclusion must be conditioned on a variety of factors (Maskus, 2012). These basic observations suggest that there could be an important complementarity between the formation of trade agreements and their IPR standards, a critical question that has not yet attracted much investigation.