Trade, Intellectual Property and Innovation: Policy Implications for the Canada-UK Relationship after Brexit.
Lead Research Organisation:
National Institute of Economic and Social Research
Department Name: National Institute of Economic & Soc Res
Abstract
This project addresses the role of Intellectual Property Rights (IPR) protection for international trade, innovation, and technology and knowledge diffusion in the context of Canada-UK relationships after Brexit.
First, we describe recent developments in the area of IPR in newly-signed mega-regional trade deals: the Canada-European Union Comprehensive Economic Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP). We discuss the deals' consequences for the national growth agenda emphasising the differential impact of the IPR clauses on different industries and occupation groups in the Canada-UK context. Also, we discuss the advantages and disadvantages of adopting CETA or CP-TPP IPR protection solutions for the Canada-UK post Brexit relationship.
Second, we address the challenges and prospects brought about by the production fragmentation, digital transformation and the rise of the new business models for both trade and intellectual property flows in the context of Canada-UK partnership. Drawing on international literature, we discuss the role of IPR protection for growth, innovation and knowledge diffusion. We also address the consequences of global value chains (GVCs) trade for knowledge and technology diffusion based on Canadian and British evidence.
Our synthesis will serve as a necessary first step towards sound evidence-based policy recommendations in knowledge transfer and IPR protection. We will provide the policymakers with a new tool, in the form of an overview of trade-related consequences of different IPR provisions, in context of the Canada-UK partnership. A detailed discussion of impact of IPR provisions across different sectors and occupations, including the role of global value chains and new business models, would facilitate identification and subsequent negotiations of the best scenarios for the future bilateral relationship between Canada and the UK. In parallel, we aim to identify areas that would benefit from more detailed scientific research.
First, we describe recent developments in the area of IPR in newly-signed mega-regional trade deals: the Canada-European Union Comprehensive Economic Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP). We discuss the deals' consequences for the national growth agenda emphasising the differential impact of the IPR clauses on different industries and occupation groups in the Canada-UK context. Also, we discuss the advantages and disadvantages of adopting CETA or CP-TPP IPR protection solutions for the Canada-UK post Brexit relationship.
Second, we address the challenges and prospects brought about by the production fragmentation, digital transformation and the rise of the new business models for both trade and intellectual property flows in the context of Canada-UK partnership. Drawing on international literature, we discuss the role of IPR protection for growth, innovation and knowledge diffusion. We also address the consequences of global value chains (GVCs) trade for knowledge and technology diffusion based on Canadian and British evidence.
Our synthesis will serve as a necessary first step towards sound evidence-based policy recommendations in knowledge transfer and IPR protection. We will provide the policymakers with a new tool, in the form of an overview of trade-related consequences of different IPR provisions, in context of the Canada-UK partnership. A detailed discussion of impact of IPR provisions across different sectors and occupations, including the role of global value chains and new business models, would facilitate identification and subsequent negotiations of the best scenarios for the future bilateral relationship between Canada and the UK. In parallel, we aim to identify areas that would benefit from more detailed scientific research.
Planned Impact
We expect our work to promote international research collaboration and facilitate the co-creation, flow, and exchange of knowledge internationally. We anticipate the target audiences of our research to be: (1) academic sector, (2) international organizations, (3) national policymakers and (4) general public. We will pursue knowledge mobilization methods at each stage of the project to disseminate the ongoing results to target audiences, as detailed below.
In order to reach out to academic scholars we will post the working papers on our private professional websites and on the NIESR institutional website. We will also make them available through the Social Science Research Network (SSRN) and the Research Papers in Economics (RePEc) networks which provide a wide dissemination across the academic world.
We will submit the final draft of the paper to the Journal of Economic Literature, Annual Reviews in Economics and Oxford Review of Economic Policy. We also intend to publish the report in The NIESR Review, an open-access peer-reviewed quarterly publication of the NIESR. To ensure open access to our research we will deposit the reviewed manuscripts both on Queen's University Institutional Repository as well as in the working paper series at the NIESR website. If the article is published in a journal imposing embargo periods of 12+ months, we will cover the cost of article processing charges and enable gold open access.
We will present our in-progress findings at the internal workshops at the NIESR, the Economic Statistics Centre of Excellence (ESCoE) and at the Queen's University. We will also present our findings at the two knowledge mobilization events related to this grant: a workshop in Ottawa in July 2018 and a conference in London in December 20185. In addition to dissemination, the presentations will be a source of feedback on our research from the other experts.
We will present our research results at the events hosted by the NIESR and the ESCoE, where M. Paczos is an affiliated researcher. The conferences organized by these institutions reach a wide audience including World Trade Organization and the World Intellectual Property Organization.
As recent as in March 2018 ESCoE has hosted a conference on the role of intellectual property flows for global trade with an active participation of the World Intellectual Property Organization, the OECD and the UK Intellectual Property Office representatives. In February 2018 the NIESR has hosted a conference on the trade policy in the Anglosphere after Brexit
We will communicate the policy implications of our research to policy makers, practitioners and the public through the Centre for International Governance Innovation (CIGI) where Professor. Olena Ivus is a Senior Fellow. We will also communicate the policy implications though the NIESR and ESCoE policy dissemination network.
We will write an opinion piece and submit it to the editors of the major newspaper (e.g. Financial Times). These pieces are a powerful communication tool. We will highlight the main
takeaways from our policy recommendations and we will put them in the context of the current advances in the world trade policy and Brexit negotiations.
We have access to the media relations department at the Smith School of Business and CIGI (O. Ivus), and to the media relations team at the NIESR (M. Paczos), which specialize in bringing media attention to academic and policy research. We will work with these units to prepare social media dissemination and press releases. We will publish a blogpost with a non-technical overview of the major findings, which will allow the readers to post comments on our work. We will prepare a podcast on the main research findings and publish it on the NIESR podcasts serieswhich also allows the listeners to engage and post comments.
In order to reach out to academic scholars we will post the working papers on our private professional websites and on the NIESR institutional website. We will also make them available through the Social Science Research Network (SSRN) and the Research Papers in Economics (RePEc) networks which provide a wide dissemination across the academic world.
We will submit the final draft of the paper to the Journal of Economic Literature, Annual Reviews in Economics and Oxford Review of Economic Policy. We also intend to publish the report in The NIESR Review, an open-access peer-reviewed quarterly publication of the NIESR. To ensure open access to our research we will deposit the reviewed manuscripts both on Queen's University Institutional Repository as well as in the working paper series at the NIESR website. If the article is published in a journal imposing embargo periods of 12+ months, we will cover the cost of article processing charges and enable gold open access.
We will present our in-progress findings at the internal workshops at the NIESR, the Economic Statistics Centre of Excellence (ESCoE) and at the Queen's University. We will also present our findings at the two knowledge mobilization events related to this grant: a workshop in Ottawa in July 2018 and a conference in London in December 20185. In addition to dissemination, the presentations will be a source of feedback on our research from the other experts.
We will present our research results at the events hosted by the NIESR and the ESCoE, where M. Paczos is an affiliated researcher. The conferences organized by these institutions reach a wide audience including World Trade Organization and the World Intellectual Property Organization.
As recent as in March 2018 ESCoE has hosted a conference on the role of intellectual property flows for global trade with an active participation of the World Intellectual Property Organization, the OECD and the UK Intellectual Property Office representatives. In February 2018 the NIESR has hosted a conference on the trade policy in the Anglosphere after Brexit
We will communicate the policy implications of our research to policy makers, practitioners and the public through the Centre for International Governance Innovation (CIGI) where Professor. Olena Ivus is a Senior Fellow. We will also communicate the policy implications though the NIESR and ESCoE policy dissemination network.
We will write an opinion piece and submit it to the editors of the major newspaper (e.g. Financial Times). These pieces are a powerful communication tool. We will highlight the main
takeaways from our policy recommendations and we will put them in the context of the current advances in the world trade policy and Brexit negotiations.
We have access to the media relations department at the Smith School of Business and CIGI (O. Ivus), and to the media relations team at the NIESR (M. Paczos), which specialize in bringing media attention to academic and policy research. We will work with these units to prepare social media dissemination and press releases. We will publish a blogpost with a non-technical overview of the major findings, which will allow the readers to post comments on our work. We will prepare a podcast on the main research findings and publish it on the NIESR podcasts serieswhich also allows the listeners to engage and post comments.
People |
ORCID iD |
| Marta Paczos (Principal Investigator) |
| Description | • Stronger IPR in destination countries benefit exports, and in particular exports from IP-sensitive industries and sectors. • Stronger IPR encourage expansion of the extensive margin of trade, such as the exports of new product varieties, in particular from the IP-sensitive industries and sectors. • The impact of IPR strengthening could be non-uniform even within the IP-sensitive industries, e.g. due to the within-industry composition of firms and their concentration and market power, or firms' product mix. • There is ample evidence on the importance absorptive capacities of a given country that influence the scale of benefits from stronger IPR. The positive impact of stronger IPR on innovation is often conditional on the initial innovative activity levels in the industry or on the supply of skilled workforce. In aggregate terms, a country with a sufficient scale of innovation-intensive industries is able to benefit more from stronger IPR. However, the international competitiveness of domestic firms also could be affected by the costs of IP protection within a national legal framework. • The literature clearly suggests that stronger IPR facilitate technology transfer, particularly in IP-sensitive industries. However, there are also both theoretical and empirical studies that describe an optimal IP protection level beyond which discourages domestic innovation. • The scope of IP policy is very broad, ranging from patents to trademarks to geographical indicators. This is further complicated by the co-existence of the areas controlled by the multilateral rules and Most Favoured Nation clause, and the areas within the national jurisdiction, e.g. exhaustion policy. Whereas the multilateral IPR reforms, as triggered by the trade agreements, have attracted a fair amount of academic attention, the role of the national policy has been relatively under-researched. Both academics and policymakers would benefit from more evidence on the importance of national IP policy and its intersection with multilaterally regulated IPR. • Brexit and the potential departure of the UK from the EEA illustrate the importance of per nation patent exhaustion policies. If the UK would leave the EEA, the shaping of the patent exhaustion policy would be within the remit of the UK government, with potentially large implications for the pricing decisions of innovative firms. • In many advanced economies the stock of intangible investment has exceeded the stock of tangible investment. Both Canadian and UK industrial strategies outlines recognize the role of intangible assets as the key driver of innovation and productivity growth. To constructively discuss the implementation of those strategies, more evidence is needed of the importance of IPR for the intangible investment, e.g. on the complementarities between the different forms of IP protection. • Both Canada and the UK rely on the well-developed regional and international supply chains. However, the role of IPR strength on the firms' sourcing decisions is under-researched. It would be beneficial to see more studies based on the firm-level or industry-level data that would take stock both of the last decade rapid GVCs expansion and IPR reforms across the world. |
| Exploitation Route | Policy Recommendations • Economic evidence highlights the role of absorptive capacities of a given country in influencing the scale of benefits from stronger IPR. It is thus crucial for both Canada and the UK to aim at creating and maintaining a favourable climate for innovation in order to maximise the benefits from the relatively strong IP regimes. • The international competitiveness of domestic firms is depends on the national costs of IP protection. Both Canada and the UK could consider revisiting some of its regulatory processes that pose barriers to innovation. However, under the principles of national treatment and the Most Favoured Nation clause, Canada and the UK cannot grant more favourable treatment to domestic IP than that applied to foreign IP. Nevertheless, the reductions in IP costs could be achieved through carefully designed tax credits or grants systems. • The use of national IP policy both in Canada and in the UK is limited by international IP systems and IP-related international trade agreements. Nonetheless, the governments are allowed to apply some discretion in establishing national IPR policy, e.g. taking advantage of the flexibilities allowed under the WTO rules. While respecting the limits, both countries could explore these possibilities to serve the best interests of the national stakeholders. • One relevant example of national IP policy is the question of the patent exhaustion after Brexit. After leaving the EU, the UK will be free to decide on its exhaustion policy. It may choose to apply exhaustion in the UK only, in the UK and the EEA, or internationally. Each of these choices could have important implications for production and pricing decisions of domestic and foreign firms, and for the innovative efforts in the UK. |
| Sectors | Creative Economy,Government, Democracy and Justice,Pharmaceuticals and Medical Biotechnology |
| Description | This project is still in progess (end date in May 2019). Part of the findings will be shared with non-academic policy audiences by publication as the Centre for International Governance Innovation (CIGI) policy paper (under revision). We are also disussing the possibility of publication a part of the research ina a non-technical e-book about the Canada-UK trade relationships. Finally, Brexit-related part of the research will be published shortly in form of a blog and dissemination piece both via ESRC Policy Briefing note, as well as a submission to VoXeu - a policy-oriented dissemination website. Last but not least, we have been discussing the work with various stakeholders, e.g. respresentatives of the Intellectual Property Trade Policy in Global Affairs Canada and with the memebers of International Trade Select Committee of the British House of Commons. |
| First Year Of Impact | 2018 |
| Sector | Government, Democracy and Justice |
| Impact Types | Economic,Policy & public services |
| Description | Discussion of the project with members of the International Trade Select Committee , 13.03.2019 |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Dr Marta Paczos participated in an event where she was allowed to share her views with the International Trade Select Committee of the British House of Commons. The purpose of this meeting, that was by-invitation only and gathered various respresentatives of both organisations and businesses, was to discuss in detail different important aspects of UK trade policy post-Brexit. The findings of the reseearch were very useful in explaining to the MPs the importance of a particular angle of IP policy - the exhaustion policy. We discussed the role of the UK national prerogatives in developing exhaustion policy, and the potential forms it can take. This was highly appreciated by the businesses present in the event. MPs were not aware of the lack of formal inclusion of this aspect of IP policy in the Brexit Withdrawal Agreement as presented by the goverment. |
| Year(s) Of Engagement Activity | 2019 |
| Description | Knowledge Synthesis Grant "Understanding the Future of Canada-UK Trade Relationships" final workshop |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | Presenatation of the final findings and sharing, and discussion acorss the grant holders. Outreach to wider audience via media. |
| Year(s) Of Engagement Activity | 2018 |
| Description | Understanding the future of Canada-UK trade relationships Workshop |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Professional Practitioners |
| Results and Impact | A special by-invitation event convening preeminent researchers, students and leaders from business, community and government sectors for an international discussion on the future of Canada-UK trade relationships. |
| Year(s) Of Engagement Activity | 2018 |