Reaping What you Sow: An Empirical Analysis of International Patent Harmonization

Abstract

This paper extends analysis of the GATT Uruguay Round by quantifying the impact of international patent harmonization as implied by the TRIPs agreement. Patent harmonization has the capacity to generate large transfers of income between countries, the US being the major beneficiary. Developing countries are major contributors to these transfers, but Canada, the UK and Japan also make sizable contributions. Furthermore, the increase in dead weight loss from higher standards of patent protection undermines the aggregate benefits of the Uruguary Round package, with this increase amounting to as much as one fifth of the efficiency gains from trade liberalization.