TRIPS is key to IPR harmonization and protection and international trade.

The TRIPS Agreement is a core component of the WTO’s set of agreements, and is likely to be a fixture of future international trade agreements despite the controversy surrounding its implementation. All WTO member countries are required to comply with the Agreement’s requirements (with the exception of countries that are not bound until 2013), or risk retaliatory trade sanctions. The TRIPS Agreement does not discriminate between member countries despite the absence of a theoretical rationale for the establishment of a single harmonised set of IPR protection mechanisms across countries. All countries, regardless of IPR protection starting point or development level, have to comply with harmonised standards to fulfil their obligations.

We develop an empirical model using a broad panel dataset to evaluate the effectiveness of the TRIPS Agreement in tightening IPR protection across a range of countries. There are three important observations that can be made of the empirical estimates. First, domestic factors are important determinants of IPR protection, as measured by our modified version of G&P’s (1997) index. This result is consistent with the findings of other authors on similar topics who have found that income, education, governance and domestic R&D activity generate stronger IPR protection.

Second, the TRIPS Agreement has had significant effects on IPR protection over its implementation period, but the significance of these effects depends on countries’ development levels. We find that disaggregating the panel of countries by level of development yields different results for developed and developing countries, even when controlling for per capita income. The TRIPS Agreement has had significant effects on IPR protection in developing countries, but has not measurably affected developed countries’ level of IPR protection. This result is consistent with the setting of TRIPS Agreements standards to conform closely to IPR protection regimes that were already in place in many developed countries. Developed countries did not have to markedly alter their regimes to be compliant with the TRIPS Agreement.

Third, we find that the effects of the TRIPS Agreement vary across regions. The TRIPS Agreement has had positive and significant effects on IPR protection in Central and South America, in Asia and in North Africa and the Middle East. The TRIPS Agreement has not significantly affected protection of IPR in Sub‐Saharan Africa. However the only Sub‐Saharan African country in our sample that is bound by the TRIPS Agreement is South Africa.

Countries that are relatively dependent on exports to countries that pushed for the TRIPS Agreement’s inclusion in the WTO (i.e., developed countries) may take the threat of retaliatory trade sanctions seriously because they have much to lose in the form of forgone exports. This provides evidence that the TRIPS Agreement has been successful as a coercive threat in international trade relations. We anecdotally observe that regions with high export dependence on developed countries have made significant changes to their IPR protection system; an interesting extension of this research would be to investigate the reasons that some developing countries/regions have responded to the TRIPS Agreement more significantly than others.