Question 1

What are the pros and cons of global Intellectual Property Rights (IPR) protection? List and evaluate the arguments.

Accepted Answer

Global Intellectual Property Rights (IPR) protection has both pros and cons.

Pros:
1. Encourages innovation and creativity: IPR protection provides an incentive for individuals and companies to invest in research and development, knowing that they will have exclusive rights to their creations and can profit from them.

2. Fosters economic growth: Strong IPR protection can attract foreign investment and technology transfer, leading to economic growth and development.

3. Protects against theft and infringement: IPR protection helps prevent unauthorized use and reproduction of intellectual property, ensuring that creators and innovators can benefit from their work.

Cons:
1. Limits access to knowledge and technology: IPR protection can restrict access to essential knowledge and technology, particularly in developing countries where access to life-saving drugs and essential technologies may be limited due to high costs.

2. Monopolistic practices: Strong IPR protection can lead to monopolistic practices, as companies may use their exclusive rights to stifle competition and control markets.

3. Hinders innovation and creativity: Some argue that IPR protection can actually hinder innovation and creativity by creating barriers to entry and limiting the free flow of ideas and information.

In evaluating these arguments, it is important to strike a balance between protecting intellectual property and ensuring that essential knowledge and technology are accessible to all. While IPR protection can incentivize innovation and economic growth, it must be implemented in a way that does not hinder access to essential resources and stifle competition. Additionally, efforts should be made to ensure that IPR protection does not become a barrier to innovation and creativity, but rather encourages a free exchange of ideas and knowledge.

Question 2

What are the four modes of trade in services?

Accepted Answer

The four modes of trade in services are defined by the General Agreement on Trade in Services (GATS) at the World Trade Organization (WTO). These modes represent the different ways in which services can be supplied internationally from one country to another. They are as follows:

1. **Cross-border supply (Mode 1)**: This mode refers to the provision of a service from the territory of one member into the territory of any other member. Essentially, the service crosses the border, but neither the consumer nor the provider needs to physically move. An example of this would be an architectural firm based in one country providing designs to a client in another country via email or an online platform.

2. **Consumption abroad (Mode 2)**: In this mode, the consumer moves into another member's territory to consume a service. This is common in sectors like tourism, medical treatment, or education, where individuals travel to another country to receive the service, such as a tourist visiting a resort, a patient going to a foreign hospital, or a student attending a university overseas.

3. **Commercial presence (Mode 3)**: This mode involves a service supplier of one member establishing a territorial presence, including through ownership or lease of premises, in another member's territory to provide a service. This can include foreign direct investment where a company sets up a subsidiary, branch, or representative office in another country to offer its services, such as a bank or insurance company opening branches abroad.

4. **Presence of natural persons (Mode 4)**: This mode covers individuals traveling from their own country to supply services in another country. This includes the movement of professionals such as consultants, engineers, or doctors who travel to provide services in a client's country under a contract or as part of a temporary transfer within a company.

Understanding these modes is crucial for negotiating international trade agreements and for businesses looking to expand their services into global markets. Each mode has its own set of regulatory challenges and market access considerations that service providers must navigate.

Question 3

How does the internationalisation of Tech MNEs differ from that of other MNEs?

Accepted Answer

The internationalization of Tech MNEs differs from that of other MNEs in several key ways. Firstly, Tech MNEs often have a more rapid and aggressive internationalization strategy compared to other MNEs. This is due to the fast-paced nature of the technology industry and the need to quickly establish a global presence in order to stay competitive.

Additionally, Tech MNEs often prioritize establishing a strong presence in key technology hubs around the world, such as Silicon Valley, London, and Singapore. This is in contrast to other MNEs, which may prioritize different regions or industries based on their specific business objectives.

Furthermore, Tech MNEs often face unique challenges related to intellectual property protection, data privacy regulations, and cybersecurity when expanding internationally. These issues require careful consideration and strategic planning to navigate effectively.

Overall, the internationalization of Tech MNEs is characterized by a focus on rapid expansion, a strong presence in technology hubs, and unique challenges related to the nature of the technology industry. These factors set them apart from other MNEs and require a specialized approach to internationalization.

Question 4

Identify the 4 correct statements 
1. A commercial presence abroad can be considered as "trade in services" although it is not covered in the standard service trade statistics, e.g., in the balance of payments.
2. The term "servicification" signifies a trend to offer manufacturing as a service.
3. For trade in services, the GATS agreement requires general "national treatment", i.e., non-discrimination of foreign suppliers.
4. Digital markets are often characterised by network externalities.
5. Tech MNE often require more capital to go abroad than other MNEs that internationalise more "asset-light".
6. Tacit knowledge is more difficult to be transmitted across borders than codified knowledge.
7. FDI is an important channel for transferring intellectual property, yet it can also be used to protect core knowledge.
8. The so-called "patent puzzle" is related to an empirical finding that the stronger patents are protected in a country, the higher is the rate of the country's technological progress.

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1. A...

Question 5

What are the five modes of trade on intellectual property?

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Question 6

How to trade policies regarding services differ from those regarding trade in goods?

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Question 7

How do digital markets differ from normal markets for goods?

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Question 8

What role do services play along the global value chain?

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Question 9

How does knowledge spread?

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Exam 5: Global Intangibles