Free Trade and Protection of Intellectual Property Rights:

Can we have one without the other?

Ai-Ting Goh

Jacques Olivier

Abstract

This paper is concerned with the interaction between trade policies and the protection of Intellectual Property Rights (IPRs). In particular, it investigates within the framework of a dynamic general equilibrium model with endogenous growth the welfare implications of an international agreement on one or both policy instruments. The main insights are first, that both sets of policies are substitutes and second, that they are affected by the same Prisoner's Dilemma problem. As a consequence, an agreement in both policy instruments is needed to achieve any positive welfare gains, which supports the long standing claim of policy makers from developed countries that protection of IPRs should be included in multilateral trade agreements.