Abstract

Domestic industrial policies, particularly in the forms of IP regulations and tariffs, are prevalent in the global economy . Proponents of such policies posit that they foster domestic innovation and protect local industries from external competition, while the opposition claims that they create artificial scarcity. For IP regulations, copying an invention does not deprive the victim of the original, as intellectual property is not a tangible good. Tariffs, on the other hand, raise consumer prices in the importing country. This paper will primarily explore the negative effects associated with such policies, emphasizing their role in creating economic distress and impeding indigenous innovation. It will first trace the historical origins of the policies, examining the distinct and shared effects. It will then observe the US-Jordan Free Trade Agreement as a case study to show these dynamics in real life. Finally, the paper will present policy reforms aimed to mitigate the negative effects of these policies.

Keywords: IP Regulations, Tariffs, Economic Distress, Domestic Industrial Policies

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