Unilateral Tariffs and the Risk of Intellectual Property Cross-Retaliation

In what has passed into diplomatic lore, when Henry Kissinger asked Chinese Premier Zhou Enlai in 1972 for his thoughts on the French Revolution (1789), he replied that it was ​“too early to say.” The mis-translated reference was to the French student riots in 1968, but before it could be corrected, the response became a metaphor for far-sighted leaders thinking in centuries rather than years. In considering the current frenzy over unilateral tariffs, looking back just a few decades is helpful—recalling the outcome of the Uruguay Round (1986−1994) of negotiations that led to the World Trade Organization (WTO), that underpins the multilateral trading system. A core feature of the Uruguay Round was its expanded coverage of services and intellectual property, as against the General Agreement on Tariffs and Trade 1947 (GATT), which dealt only with goods. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which codified universal IP protection, was agreed upon after long and difficult negotiations. Many developing countries had contested the inclusion of intellectual property in trade negotiations, agreeing only reluctantly in exchange for tariff concessions on textiles, agriculture, and other goods.