The Importance Of Foreign Trade

A specific question of TRIPS is why intellectual property is “trade-related.” The highly disputed answer to the trade/intellectual property linkage is that intellectual property is a barrier to trade. The gains-from-trade theorem and the law of comparative advantage are the two basic theories of the WTO. According to the theory of comparative advantage, countries are different in their endowments or technological progress. Some countries produce agricultural products more than others, while some countries have a comparative advantage over another in producing knowledge-based products. Economist David Ricardo concluded that foreign trade would be beneficial for the countries, with the crucial benefit of expanding their market

They have an incentive to lobby for trade liberalization, in order to keep protectionism from causing unfavorable changes or incurring costs to them. What can be anticipated is the knowledge and technology-intensive (KTI) industries of developed country tend to gain ascendancy on negotiating platforms. Eventually, these global businesses surveil and evaluate the political and legal climate of the international fora. For instance, US business alliances, such as the Business Software Alliance (BSA) and the International Intellectual Property Alliance (IIPA) tenacious reminded the Offices of the United States Trade Representative (USTR) of the trade losses they experienced in other markets of the world (albeit the agency cast a slight doubt). Professor Drahos would argue it was also because the Japanese triumph of the industrial progress in the 80’s, which stirred up worries of the US industries and

It provides a tribunal to implement US rights under the various WTO agreements to ensure compliance. Scholarly works explain why “linkage” was crucial for the contracting parties to tackle with in the Uruguay Round. A school of scholars introduced the concept of “regime complex” or “regime shifting” to illustrate a strategy to maximize the interest of a state by creating overlapping international forums. Professor C. O'Neal Taylor notes the three reasons why the GATT was an employable institution for such international rule-making: (1) its mandate — liberalization of trade; (2) selflessness of parties with drastically different stages of economic development; and (3) open-ended agenda. The system ultimately encompasses disciplines on subjects such as intellectual property, labor standards, and environmental standards, although the IPR-trade linkage was taken as a deliberate strategy to conclude the agreements. The preamble of the TRIPS Agreement states:

“Desiring to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property