The Canadian Generic Medicines Panel

Abstract

Among the most important criticisms of the World Trade Organization that echoed loudly in the protests in Seattle in November 1999 is that the WTO unduly constrains the regulatory autonomy of Member States, defeating or frustrating democratic choices in important areas of social, economic, environmental and cultural policy. When properly interpreted and applied, many WTO rules do, however, permit a considerable amount of regulatory dwersity, provided the domestic policies in question do not discriminate against foreigners. The area where the WTO does interfere most explicitly in the abhty of governments to strike a balance in their policies between diverse public values is that of intellectual property. The Agreement on Trade-Related Aspects of Intellectual Property Rights does prescribe substantive standards of intellectual property protection,' limiting the abhty of democratic polities to strike their own balance between the provision of incentives for innovation on the one hand and consumer welfare on the other; nor are these the only public values at stake, as debates surroundmg biodwersity and intellectual property clearly illustrate. Moreover, on a conventional economic analysis, unlike the removal of tariffs, quotas and other overtly discriminatory trade barriers, raising intellectual property protection may actually reduce total domestic and even global economic welfare. For example, in the case of increased patent protection, the adhtional monopoly rents to producers may generate little addtional (efficient) innovation, whde creating substantial welfare losses to consumers, who are deprived of cheaper imitations of patented products.2 As Maskus suggests: