Intellectual Property Rights, Trade Agreements,and International Trade

The global process of strengthening and harmonization of intellectual property rights (IPRs) systems has been intensied in the last twenty ve years by the signing of trade agreements (TAs) that include chapters with intellectual property (IP) provisions and other non-trade-related issues. This paper provides a rst exploration of whether and how the signing of TAs with IP chapters in uences bilateral trade ows for a panel of 122 countries and the period 1995-2013. We address methodological issues related to the assessment of the eect of TAs on bilateral trade. We use matching econometrics to evaluate the treatment of TAs with and without IP chapters. In addition, we estimate the eects of TAs on bilateral trade in a more dynamic fashion using a panel data approach based on the gravity model. We perform our analysis for trade in low- and high-IP intensive products. We found that both types of TAs increase bilateral trade. However, TAs with no IPRs chapters have a stronger positive eect on trade, while TAs with IP chapters have a stronger eect if we include lags to consider that they might need a longer implementation time. We also found that the eects depend on the development level of countries and, to a lesser extent, on the IP intensity of products. We found a clear positive eect for developed countries, but we do not observe gains for developing countries in all sectors and to all destinations derived from TAs with IP chapters. This raises the question of whether trade gains can compensate the eort related with IP reforms.