Intellectual Property, Tariffs, and International Trade Dynamics

48 Pages Posted: 7 May 2019

See all articles by Federico Mandelman

Federico Mandelman

Federal Reserve Bank of Atlanta

Andrea Waddle

Federal Reserve Banks - Federal Reserve Bank of Richmond

Date Written: 2019-05-01

Abstract

The emergence of global value chains not only leads to a magnification of trade in intermediate inputs but also to an extensive technology diffusion among the different production units involved in arms-length relationships. In this context, the lack of enforcement of intellectual property rights has recently become a highly controversial subject of debate in the context of the China-U.S. trade negotiations. This paper analyzes the strategic interaction of tariff policies and the enforcement of intellectual property rights within a quantitative general equilibrium framework. Results indicate that, in principle, tariffs could be an effective deterrent for weak protections for intellectual property. Moreover, weakening enforcement may be a strong deterrent for raising tariffs. These results combined indicate that there is scope for international cooperation on these fronts.

Keywords: tariffs, intellectual property rights, technology capital transfers, international trade

JEL Classification: F13, F21, F41, F42, F51

Suggested Citation

Mandelman, Federico and Waddle, Andrea, Intellectual Property, Tariffs, and International Trade Dynamics (2019-05-01). FRB Atlanta Working Paper No. 2019-10. Available at SSRN: https://ssrn.com/abstract=3383242 or http://dx.doi.org/10.29338/wp2019-10

Federico Mandelman (Contact Author)

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

Andrea Waddle

Federal Reserve Banks - Federal Reserve Bank of Richmond

P.O. Box 27622
Richmond, VA 23261
United States

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