Introduction

Economists usually think of international trade agreements as attempts to solve the prisoner's dilemma that is inherent in trade policy. Each country would like to protect its own market, either because of powerful political interests in the import-competing sector or the desire to exercise its market power in trade. However, each country's protection has a negative impact on the welfare of its trading partners by denying market access to their exporters and worsening their terms of trade. Unilateral actions of countries in setting trade policy will thus result in an inefficiently high level of protection. The role of international trade agreements, such as the Agreement Establishing the World Trade Organization (WTO), is to provide a forum in which countries may negotiate mutually beneficial reductions in those trade barriers.

As a result of the Uruguay Round of trade negotiations, the scope of the WTO was expanded to include the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The TRIPS Agreement represents a substantial departure from previous international conventions on intellectual property rights (IPRs). First, it covers a broad range of IPRs under a single accord. Previously, there were separate agreements covering copyrights (Berne Convention) and industrial property (Paris Convention) that had widespread membership, but other aspects of intellectual property, such as computer software and trade secrets, were not covered by significant treaties.