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IP and NAFTA

President Trump announced last week that his desire to renegotiate NAFTA.  Dean Baker, an economist wrote in the New York Times today that “the renegotiation of the North American Free Trade Agreement allows the United States, Canada and Mexico to get rid of rules that have no place in trade deals.” Baker suggests that “provisions requiring strong patent and copyright protection. ” are examples of these sorts of counter productive provisions:

These are forms of protectionism – the opposite of free trade – that can raise the price of the protected items by a factor of 10 or even 100. The impact of these protections is especially pernicious in the case of prescription drugs.

Drugs that would be readily available in a free market can be prohibitively expensive because of patent protection. For example, the Hepatitis C drug Sovaldi has a list price of $84,000 in the United States. A high-quality generic version is sold in India for less than $200.

While companies need an incentive for innovating, there are far more efficient mechanisms than patent monopolies. It doesn’t make sense for a 21st century economy to be dependent on this relic of the feudal guild system for supporting innovation.

The purpose of this post is not to agree or disagree with Prof. Baker. Rather, this post is pointing out the large scope of patent and copyright laws. There are many ways to get interested in this material.

 

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