Intellectual Property, Tariffs, and International Trade Dynamics

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 ha...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Mandelman, Federico S, Waddle, Andrea L
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 22.04.2019
Subjects
Economic models
Enforcement
Intellectual property
International trade
Property rights
Tariffs
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DOI10.29338/wp2019-10

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Summary: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.
Bibliography:SourceType-Working Papers-1
ObjectType-Working Paper/Pre-Print-1
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DOI:10.29338/wp2019-10