The enactment of effective intellectual property legislation and its proper enforcement is also key for increased competitiveness in domestic markets. It is essential to secure technology transfers and the licensing of new technologies which improve competitiveness and efficiency. Its objective is to facilitate the development of technological infrastructure and access to, and transfer of, foreign technology and to foster innovations. Partial evidence of the need for such legislation and for its proper enforcement comes from a recent survey of large US chemical, pharmaceutical, and technology companies. Over 70% of these firms stated that intellectual property protection in most LAC countries is so weak that they would not grant companies in such countries licenses for the use of their products or of their most recent technologies.

As of now, intellectual property rights are inconsistently pmtected from country to country. There is a need to homogenize and simplify procedures for international protection of patents, trademarks, copyrights, designs, and trade secrets (treaties such as the European Tent Office and the proposed badrid Convention Protocol). Enforcement should fall under the auspices of a supranational body, rather than relying on voluntary, or bilateral means. As of now, The Uruguay Round includes a provision for Trade Related Intellectual Property Rights (IRIPS). As with the rest of the Round, the substantive negotiations and signing have taken place but a certain amount of work is still needed to tie up the legal issues. Furthermore, there are transitionial provisions which give developing countries some additional time, up to ten years, before they have to meet their obligations. TRIPS will not be applicable until the World Trade Organization (WTO) is established. The TRIPS agreement essentially requires that each signatory accord nationals of other member states no less favorable treatment than it accords to its- nationals. It provides the type of minimum protection already set out in the Paris Convention, Berne Convention, and other intellectual property agreements. In the longer term, referral of disputes will be to the WTO, but not until five years after its establishment.

# 3. _Trude and Competition Policies: Complementanies and Tensions_

# Analytical Framework

The easiest way to see the complementarity between trade policy and competition policy is to consider the traditional neo-classical model of trade, with two goods, community utility functions, and welfare maximization with a fixed aggregative factor of production. (See Appendix figure A.) When there is free trade, and the country in question has no monopoly power in the tradeable sector, welfare can be maximized by equating the domestic marginal rates of transformation in production with the foreign marginal rate of transformation and exchange, which is given by the fixed terms of trade. When some nontraded goods are produced they are not subject to foreign competition. In that case the level of welfare achieved with free trade and no competition policies is lower than that which could be achieved with competition policies. That is, competition policies allow the economy's domestic marginal rates of substitution in production to be equated with foreign marginal rates of transformation by inducing domestic firms to reduce monopoly elements in the production of non-tradeables.

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