You cannot serve two masters
Posted on 18 January 2006
Meir Perez Pugatch has a very interesting essay in Intellectual Property Frontiers, a new publication from the Stockholm Network. He says that TRIPS, a WTO agreement which seeks to increase intellectual property protection, was the result of lobbying from vested interests:
The linkage between the TRIPS Agreement and business interests, such as the pharmaceutical, music and film industries is clear. No one denies that these industries were the main driving force behind the agreement.
He's right. But then he says that TRIPS is needed because without it, free trade would be a "threat to the vital interest of the leading knowledge-based economies".
This is an important claim. Free trade liberals take the view that unilateral liberalisation is good for countries, regardless of what anyone else does. But those, like Pugatach, who believe it would be a disaster to liberalise without an IP agreement can only, logically, be opponents of unilateral free trade. Without such an agreement, free trade would be a race to the bottom.
If the race to the bottom scenario is true, shouldn't we also accept other arguments about the race to the bottom? Why are trade unions and environmentalists wrong when they demand that the WTO regulate labour conditions, wages and environmental laws? Shouldn't the WTO regulate minimum tax rates?
It is not uncommon for market-oriented people to believe in the necessity of TRIPS and also in the virtue of unilateral liberalisation. But the fact is that you cannot serve two masters: if you think that civilization will crumble without TRIPS, you have to reject unilateral free trade.
It should come as no surprise that free trade liberals have widely attacked TRIPS. Razeen Sally, Europe's leading trade economist, describes TRIPS as "alarming", saying that "TRIPS takes WTO rules in a new direction - not further in the direction of market access, but elsewhere, towards a complex, regulation-heavy standards harmonization agenda."
Jagdish Bhagwati of Colunbia University, and author of In Defense of Globalization, says "The damage inflicted [by TRIPS] on the WTO system and on poor nations has been substantial." He attacks the "pseudo-intellectual justification" for TRIPS and even describes TRIPS as "a cancer".
And Philippe Legrain, author of Open World: The Truth about Globalisation, and a former Economist journalist, says TRIPS is "an impediment to development" and is "a massive snatch-and-grab raid on consumers in poor countries by companies in rich ones".
Pugatch concludes his essay by saying that "The TRIPS Agreement should... be strengthened and expanded." Perhaps not.