This is from the IP section of the ITC's USMCA report (starts on p. 213):
Modeling of Changes to Key IPR Provisions
The Commission’s quantitative assessment of the effects of key IPR changes in USMCA identifies the statistical relationships between trade in certain IPR-intensive manufacturing sectors and increased IPR protections under USMCA, and then incorporates the results into an economy-wide model as ad valorem trade cost equivalents.592 The underlying intuition for the quantitative assessment, which is supported by a substantial economic literature,593 is that improvements in IPR protections facilitate trade in IPR-intensive goods and services.594
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594 Commissioner Kearns notes that the rationale for IPR provisions is that they encourage innovation by protecting rights holders in a way that may hurt consumers through higher short-run prices on innovative products, but provide the benefits of these products to consumers and the economy. This model, however, treats IPR protections as equivalent to a reduction in trade barriers or costs. Commissioner Kearns looks forward to methods of modeling the effect of IPR provisions in ways that better reflect their rationale and impact on the economy.
I agree with Commissioner Kearns here, and I encourage economists to figure out better ways to model the impact of IPR protections on the economy, although I think he and I may have to wait a long time for this.
