When the Supreme Court in India denied patenting Novartis for Glivec, it sparked controversial war in international trade. It elicited reaction from the pharmaceuticals in the United States of America, who in turn called for punitive and harsh patent policies to be attached to all new trade agreements. Intellectual property rights have become a central part of American free trade policies. Patents and copyrights are licensed monopolies and the things players in international trade need to push against it. The significance of intellectual rights in international trade started when intellectual rights lobby and trade representatives of America entered into symbiotic relationships; this made intellectual rights issues part of American trade agenda. This essay will deal the relationship between intellectual property rights and free trade and the implications of intellectual property rights on free trade agreements. The enhancement of international trade and the emergence of trade blocs coupled with the introduction of intellectual property rights have altered free trade principles. The United States of America and the European Union have taken a great interest in inserting intellectual property rights in free trade agreements. This is an uncomfortable indication that the WIPO/WTO/TRIPS marked the beginning of an upward trend towards a strong intellectual property protection (Correa & Yusuf, 2008).
Highly concentrated companies and transnational corporations convinced governments of the major world powers to convince developing countries to harmonize their patent, global and trademarks to be in line with the global intellectual property rights regime. This resulted in the signing of the Agreement on Trade Related Aspects of Intellectual Property (TRIP) regime. That established standards and dispute settlement systems to ensure compliance and application. Free trade and intellectual property rights are two distinct issues posing different problems. These changes in intellectual property could ensure effective remedies against any interference in domestic intellectual property rights, in third world countries. The most favored nations stand to benefit from the regime of intellectual property rights. This is because most of the trade agreements favor those countries (Correa & Yusuf, 2008).
This opened interests in intellectual property interests and this was considered a critical part in the development of trade-based multilateral property agreements. During negotiations that started in Brazil, India argued that the protection regulation of intellectual property rights should not be incorporated in GATT and should instead remain with WIPO. The United States of America was in the forefront in the pushing for intellectual property rights and rules in international trade. It intimidated developing countries to adopt higher standards of intellectual property rights regulation and most of the countries assented to the rules in a multilateral deal that could end international trade bullying. This marked the entrance of intellectual property rights in international trade (Correa & Yusuf, 2008).
Various companies with international operations thrive due to quality, brand exclusivity, creativity and innovation. In the world of diminishing resources, these companies enjoy comparative advantages in the global market because of intellectual property rights that protect them. To protect this comparative advantage outside European Union, European Commission negotiates for enforcement and protection of intellectual property rights in their bilateral trade agreements. Through this negotiation of intellectual property rights, European companies will be in a position to operate under the same regime or trade rules under the conditions that they enjoy while operating in the European Union. This will create better markets and business opportunities for these companies. This violates the rules of free trade and interferes with free market policies because it gives undue advantage to other companies while discriminating against others. It interferes with level field playground for all players in the market (Kur, 2011).
In the TRIP, every member of the World Trade organization was required to reform its intellectual property rights laws to march them with minimum standards prescribed by TRIP.
The intellectual property regime served to ensure that there are minimum standards for the implementation of intellectual property. This has not been the case since it has only served as a stepping stone for dominant countries to continue their intellectual property domination and expansion. The intellectual property rights have gone against the principle of free trade because it has only benefitted the European Union, United States of America and the active players in the bilateral Free Trade Agreements. In most cases, free trade agreements are considered technologically asymmetrical because they are designed in the main interest of countries which are net exporters of goods related to intellectual property and putting extreme burden on countries that heavily rely on the goods that are protected by intellectual property (Kur, 2011).
Globalization has resulted in the growth of international trade. This has had the effect of deregulating markets and bringing down barriers to trade. Intellectual property rights have been an exception to these dynamics and inclination of international trade. Intellectual property rights have disadvantaged underdeveloped and importing countries at the expense of those with strong purchasing power.
Intellectual property rights are aimed at protecting intellectual creations that are essential to our human desire to solving problems and promoting secure avenues geared towards progress. Although the trade is an activity involving the exchange of goods and services, it is subsequent to the intellectual creation process that is oriented to satisfying necessities and enhancing the effective and efficient distribution of goods and services at both the international and domestic markets. This is, however, considered hazardous in the sense that it will hinder the free movement of goods in international trade regime. Free trade concerns the movement of goods and services across boundaries without any hindrance and barriers but the intellectual property rights law, due to its complex rules about parallel importation and the exhaustion of rights and on the doctrine of infringement that allows intellectual property owners to prevent the movement of goods instead of allowing global circulation. This is exemplified by the keenness of countries in European Union to increase the monopoly over other worlds. Intellectual property has, therefore, been manipulated to create new forms of protectionism under the veil of complex intellectual property law (EU Bilateral Trade Agreements and Intellectual Property).
In the global trade regime, intellectual property rights create grey areas that have resulted in controversy over investments in third world countries. Economic activities are based on intellectual and information, but legal restrictions exist; these restrictions only limit the free flow of goods and information. In the modern global market, restriction like patents and copyright have been very severe and caused various lawsuits. This has reversed the gains of free trade resulting from globalization (EU Bilateral Trade Agreements and Intellectual Property).
The intellectual property rights law is a unidirectional and the United States and European Union have been very active in promoting the signing of Free Trade Agreements (FTA). In these treaties, they insert chapters that seek to expand provisions on intellectual property rights. Intellectual property rights were considered as the means that scarce resources that are being managed. This is to enable for a compromise to be worked on in an optimal way to wade off existing constraints. Intellectual property rights apply to such capital goods such as land and also on the distribution of tangible goods that are complicated to the manufacturer hence having non-zero price that are not freely available. The current intellectual property rights, however, have tried to enforce artificial barriers to the free flow of goods and uses of information. This has, therefore, created a scarcity where it is damaging to humanity were the rich will benefit at the expense of the poor countries. The barriers to free trade are often upheld through rigorous legal regime to enforce the measures (Hassanien, 2009).
Developing countries have constantly comprehensive protection provided by the intellectual rights regime. This is because according to these countries, TRIPS did not touch on free trade but its main objective was to externalize control and regulation over intellectual property rights that were domestically created through the international regime with dispute settlement mechanisms. Intellectual property rights have been accused as jeopardizing the sovereignty of nations. This is catalyzed by the fact that industrialized nations have developed a strong regime of legal principles about intellectual property. Developed countries have made the protection of intellectual property rights their main objective as opposed to a means of stimulating innovation, enhancing the transfer of technology and fostering free trade. These countries enter into free trade agreements that have sections on intellectual property rights protection. This has been considered to jeopardizing the terms of trade and disadvantaging the other trading partner (Nair, 1995).
References
Correa, C. M., & Yusuf, A. (2008). Intellectual property and international trade: The TRIPs agreement. Alphen aan den Rijn: Kluwer Law International.
EU Bilateral Trade Agreements and Intellectual Property: For Better or Worse?. (2014). Berlin, Heidelberg: Springer Berlin Heidelberg.
Hassanien, M. R. (2009). United States bilateral free trade agreements: Consistencies or conflicts with norms in the Middle East.
Kur, A. (2011). Intellectual Property Rights in a Fair World Trade System: Proposals for Reform of TRIPS. Cheltenham: Edward Elgar Pub.
Nair, K. R. G. (1995). Intellectual property rights. New Delhi [u.a.: Allied Publ.
