Why TPP on IP law is better than you think

I have read and heard many times that TPP will bring harsher intellectual property law than is appropriate for the poorer Asian countries, noting that over time we can expect more of them to join the agreement.  In general poorer countries often benefit from weaker IP enforcement, more copying, and lower prices.  This is standard stuff.

It is less commonly recognized by the critics, however, that tougher IP protection may induce more foreign direct investment.  Why for instance invest in a country which might subject your patents and copyrights to an undesired form of compulsory licensing?  Trade agreements are likely to rule out or restrict such risks.  There will be more cross-border licensing activity as well, if there is tougher IP enforcement.  A company might even set up an R&D facility in a upper-tier developing country.

Carsten Fink and Kwith E. Maskus have an entire volume on these questions, Intellectual Property and Development.  Here is one sample bit from their introduction (pdf):

IPRs are quite important for multinational firms making location decisions among middle-income countries with strong abilities to absorb and learn technology.

You will note however that the effect is not there for poorer countries.  But in general:

…stronger IPRs have a significantly positive effect on total trade.

And this:

The study’s findings support a positive role for IPRs in stimulating enterprise development and innovation in developing countries.

I would say the volume, and the surrounding literature, as a whole provides some positive support for how IP rights may boost economic development, though not overwhelming or unambiguous support.  And the literature does not support a “one size fits all” approach to IP law; in this sense TPP is far from ideal.  But still, the literature does find some very real development benefits when a country moves to tougher IP rights.

But here’s the thing: TPP opponents simply tell us that bad and too tight IP law will be foisted upon the world’s economies.  I see talk of Aaron Schwartz and Mickey Mouse extensions, but I don’t see enough of the critics weighing the costs and benefits, or for that matter even mentioning the possible benefits of extending IP regimes.  I think the benefits of this IP extension may well outweigh the costs, when it comes to the developing nations involved in TPP.  At the very least it seems to me up for grabs.  And I certainly don’t think that voting down TPP this time around is going to lead to a more favorable redo of the agreement, not on IP for sure.

So IP considerations are not weighing nearly as much against TPP as you might think.

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