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Federal Reserve Bank of Atlanta
FRB Atlanta Working Paper
Intellectual Property, Tariffs, and International Trade Dynamics
Federico S. Mandelman
Andrea L. Waddle
Abstract

The emergence of global value chains not only leads to a magnification of trade in intermediate inputs but also to an extensive technology diffusion among the different production units involved in arms-length relationships. In this context, the lack of enforcement of intellectual property rights has recently become a highly controversial subject of debate in the context of the China-U.S. trade negotiations. This paper analyzes the strategic interaction of tariff policies and the enforcement of intellectual property rights within a quantitative general equilibrium framework. Results indicate that, in principle, tariffs could be an effective deterrent for weak protections for intellectual property. Moreover, weakening enforcement may be a strong deterrent for raising tariffs. These results combined indicate that there is scope for international cooperation on these fronts.


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Federico S. Mandelman & Andrea L. Waddle, Intellectual Property, Tariffs, and International Trade Dynamics, Federal Reserve Bank of Atlanta, FRB Atlanta Working Paper 2019-10, 01 May 2019.
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Keywords: tariffs; intellectual property rights; technology capital transfers; international trade
DOI: 10.29338/wp2019-10
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