Free Trade Agreements Innovation
When foreign companies enter Widget Corp.`s domestic production market they create import competition that has a theoretically ambiguous effect on innovation. A number of factors – such as the potential benefits the company could derive from additional innovation, management efficiency and specific moving costs – could all be in place. Empirically, there is strong evidence that import competition drives productivity and innovation for companies in emerging countries and, to a lesser extent, in Europe; but the evidence is more negative for companies in the U.S. and Canada. We propose that these regional differences can be explained by differences in initial levels of competition and the extent of friction in domestic markets. Within a country, studies generally show that more productive firms tend to be more favourable (or less negative) to be affected by import competition. Some commentators have said that the intellectual property provisions of free trade agreements are unfair to U.S. small trading partners. Trade lawyer George Y. Gonzalez said: „The process of bilateral negotiations in a `multilateral` global context promotes the negotiating position of prosperous developed countries vis-à-vis high-potential developing countries. 131 From this point of view, access to the U.S. market for agricultural products, textiles and other commodities is extremely important for less prosperous countries.
As a result, U.S. COMMERCIAL PARTNERS are ready to adhere to the U.S. intellectual property proposals as part of the free trade process. Some observers have criticized the United States for allegedly exploiting its strong negotiating position and superior intellectual property expertise in entering into free trade agreements.132 Given Article 4 of the TRIPS agreement, some experts believe that a specific free trade agreement can extend U.S. obligations not only to its partners or partners in the ADPIC agreement. , but also to all WTO members.129 Other commentators differ. but that free trade agreements are exempt from the most favoured commitments under certain provisions of the General Agreement on Tariffs and Trade.130 One possible consequence of the scope of free trade agreements is that other trading partners are less willing to make concessions on their intellectual property laws, they are already entitled to all of the commitments made by the United States in existing free trade agreements. Many of the contributors to this series – including this author – have strongly criticized the TPP and referred, for example, to problems related to its undemocratic investor-state dispute settlement mechanism and its excessively protectionist intellectual property protectionist provisions. However, in the eyes of journalists and experts, the defeat of the TPP meant more than a rejection of a flawed economic agreement.