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We develop a North—South model in which a Northern monopolist can fully exercise its market power globally only if the North practises national exhaustion of intellectual property rights (IPR) and the South prohibits imitation. The firm's export incentive turns out to be a major determinant of equilibrium policy choices and their welfare effects. The North has a stronger preference for international exhaustion if the South forbids imitation, something the South is actually more willing to do under national exhaustion. Shutting down Southern imitation increases global welfare if and only if it is necessary for inducing the firm to export.

This article develops a North-South product cycle model in which innovation, imitation and the flow of foreign direct investment (FDI) are all endogenously determined. In the model, a strengthening of intellectual property right (IPR) protection in the South reduces the rate of imitation and it increases the flow of FDI. Indeed, the increase in FDI more than offsets the decline in the extent of production undertaken by Southern imitators so that the South's share of the global basket of goods increases. Furthermore, while multinationals charge higher prices than Southern imitators, real wages of Southern workers increase while those of Northern workers fall.

This article examines how patent protection in developing countries affects the technology licensing strategy of US multinational firms and the associated technology transfer flows. Strengthening patent rights lowers appropriability hazards and so reduces the firms' reliance on affiliated licensing as the more secure means of transfer (the internalization effect). However lower appropriability hazards also encourage the firms to increase of teachnology transfer via licensing both within and outside the firm (the appropriability effect). Which effect prevails depends on the underlying technological complexity of the firms' product. We find that a strengthening of patent protection in the host country increases the incentive to license innovations to unaffiliated parties. While unaffiliated licensing rises among all firms, the volume of affiliated licensing falls among complex-technology firms but rises among simple-technology firms. The positive appropriability effect on affiliated licensing is strong enough among simple-technology firms that the entire composition of their licensing further shifts towards affiliated parties. The results are significant for recent work on the internalization theories of multinational firms and the interaction between firm strategy and the institutional environment, as well as for patent policy in the developing world, where access to knowledge is critical.

In a stylised model involving a developing country (called South) and a foreign patent holder, we analyse whether and how the incidence and social value of compulsory licensing (CL) depends upon the South's patent protection policy. If South is free to deny patent protection, CL fails to arise in equilibrium and the option to use it makes both parties worse off. If South is obliged to offer patent protection, CL can occur and even yield a Pareto improvement. The ability to control price increases the South's incentive for patent protection as well as the likelihood of CL.

The GATT security exceptions were practically in hibernation until recently. The recent WTO disputes panel activity concerning such exceptions is characterized by a standard of review that places the accent on ‘when’ action should be taken and not so much on ‘what’ action should be taken. We see two problems with this construction. First, the ‘when’ might be a function of privileged information that those possessing it might be unwilling to divulge in a transparent manner. Second, national security is an amorphous concept, and unless we disaggregate it, it is impossible to pronounce the appropriateness of measures adopted to pursue the underlying objective. In turn, the absence of disaggregation could lead to false positives and negatives, as the same action could be pursuing essential security or providing protection to domestic players.

‘The US won a $7.5 Billion award from the World Trade Organization against the European Union, who has for many years treated the USA very badly on Trade due to Tariffs, Trade Barriers, and more. This case going on for years, a nice victory’, tweeted President Trump on 3 October 2019. The United States (US) won not only the highest amount of retaliation ever adjudicated in the history of the WTO but also an ongoing right to retaliate on an annual basis until such time as the EU had complied by either removing the subsidies it granted Airbus or somehow neutralizing their adverse effects on Boeing. In light of the facts of the case, this ruling has two major shortcomings. First, in sharp contrast with the statutory language and practice until now, the Arbitrator effectively introduced a permanent liability rule into the WTO system through the backdoor. Second, given the way the decision and the associated award has been written, it is simply impossible for the EU to comply because (a) the contested subsidies are no longer in existence and (b) no guidance has been provided on how the EU might go about removing their adverse effects on Boeing if it sought to achieve compliance. Thus, in all likelihood, the EU is saddled with a ruling that obligates it to cough up an annual sum of $7.5 billion USD for an indefinite time period.

Are preferential trade agreements (PTAs) building or stumbling blocks for multilateral trade liberalization? I address this question in an infinitely repeated tariff game between three countries engaged in intraindustry trade under oligopoly. The central result is that when countries are symmetric, a free trade agreement (FTA) undermines multilateral tariff cooperation by adversely affecting the cooperation incentive of the nonmember whereas a customs union (CU) does so via its effect on the cooperation incentives of members. However, when countries are asymmetric with respect to either market size or cost, there exist circumstances where PTAs facilitate multilateral tariff cooperation.

We construct an oligopoly model in which a multinational firm has a superior technology compared to local firms. Workers employed by the multinational acquire knowledge of its superior technology. The multinational may pay a wage premium to prevent local firms from hiring its workers and thus gaining access to their knowledge. In this setting, the host government has an incentive to attract FDI due to technology transfer to local firms or the wage premium earned by employees of the multinational firm. However, when FDI is particularly attractive to the multinational firm, the host government has an incentive to discourage FDI.

An agricultural price range system (PRS) aims to stabilize local prices in an open economy via the use of import duties that vary with international prices. The policy is inherently distortionary and welfare-reducing for a small open economy, at least according to the canonical economic model. We offer an explanation for why a government concerned with national welfare may nevertheless implement such a policy when faced with risk aversion and imperfect insurance markets. We also highlight open questions arising out of the Peru–Agricultural Products dispute for the WTO's Appellate Body to address in order to clarify how a PRS consistent with WTO rules could be designed. Finally, we discuss the possibility that a WTO member might resort to a free trade agreement (FTA) to preserve its flexibility to implement a PRS and how an FTA provision of this sort ought to be treated in WTO litigation.

This paper compares equilibrium outcomes of two games of trade liberalization. In the Bilateralism game, countries choose whether to liberalize trade preferentially via a customs union (CU), multilaterally, or not at all. The Multilateralism game is a restricted version of the Bilateralism game in that countries cannot form CUs and can only undertake non-discriminatory trade liberalization. When countries have symmetric endowments, global free trade is the only stable equilibrium of both games. Allowing for endowment asymmetry, we isolate circumstances where the option to form CUs helps further the cause of multilateral liberalization as well as where it does not.