The TRIPS Agreement as a Coercive Threat: Estimating the Effects of Trade Ties on IPR Protection Regimes

Abstract

Negotiators from developed countries pushed hard for the inclusion of the TRIPS Agreement in the WTO set of agreements because it was viewed as a potentially effective method of coercing developing countries to strengthen their protection of intellectual property rights (IPR). We investigate whether the threat of cross-agreement retaliation, which could be authorized in disputes regarding the TRIPS Agreement, is effective in changing countries’ IPR protection regimes. The results from a panel empirical model suggest that both the TRIPS Agreement and the strength of trade ties with developed countries are important determinants of IPR protection regimes, but the vulnerability to potential trade losses through cross-agreement retaliation is not a uniformly significant determinant across geo-economic regions. These results extend beyond the TRIPS Agreement and highlight the potential ineffectiveness of the WTO’s retaliation mechanism as a coercive threat.