TRIPS and trade As a

TRIPS and trade

As a part of the Uruguay Round of trade negotiations, countries joining the World Trade Organization (WTO) were required to agree to enforce intellectual property rights (patents, copyrights) standards. These standards were called TRIPS, for Trade Related Intellectual Aspects of Intellectual Property Rights.

Daniel Drezner argues that the decision to include the TRIPS agreement with the other trade agreements negotiated in the Uruguay Round was a mistake. Here is his Tech Central Station column: "What Might Trip Up the WTO"

"...Until TRIPS, there was a very clear dividing line between what the global trade regime covered and what it didn't. The trade rules were designed to liberalize barriers to the exchange of products. Except for extreme circumstances, those rules said nothing about the processes through which products are made. It was generally accepted that if the global trade body intervened in such questions, it would constitute an unwarranted intervention into the national regulations of member countries. And for good reason -- it's relatively costless for countries to remove border-level barriers to trade, but relatively expensive to enact and enforce new domestic regulations over production processes. TRIPS, however, was expressly designed to regulate production processes -- namely, whether firms respected intellectual property rights in their operations.

"Whatever the valid reasons for linking IPR to trade, the negative effects of TRIPS have been substantial. First, the agreement imposed a significant burden on developing countries to adhere to more rigorous standards. Second, the agreement's effect on the provision of AIDS drugs had a polarizing effect on the global politics of trade, prompting anti-globalization activists to make absurd and disgusting claims about the WTO's responsibility for the deaths of millions of Africans. Third, in creating TRIPS the members of the WTO erased the dividing line between the liberalization of trade in products and the regulation of processes..."

P.S. September 21Peter Gallagher responds to Drezner here: "Stumbling over the TRIPS agreement "The argument that TRIPS takes the global trade regime beyond regulating barriers to trade and into regulating national production processes is crucial to Drezner's column. Gallagher argues that this argument is wrong:

"...TRIPS is not about the regulation of production processes or even about 'whether firms respected intellectual property rights in their operations.' TRIPS is about the uniform global adoption and enforcement by governments of certain standards in the existing international IP treaties (the "WIPO" treaties on patents, trademarks, copyright etc). It also marginally extends some aspects of those treaties on matters such as the term of patents and it provides a multilateral disputes process through the WTO.

"In other words TRIPS is an agreement about which laws the member governments of WTO have on their books and how governments enforce those laws: it does't directly regulate any firm or production process. Only national governments can do that.

"This difference is crucial. Because TRIPS is about creating a 'floor' for the IP standards that national governments must enforce, it leaves a lot of the decisions about whether the actual standards adopted nationally are 'strong' or 'weak'..."