In 2012, South Korea obtained 14.168 patents from the United States Patent and Trademark Office. Taiwan had 11.624 patents and earned the fourth place on the list.

The other day I was in Washington DC, listening to the American official who is the head of the office that carries out the EU-US Transatlantic Trade and Investment Partnership (TTIP) and Trans Pacific Partnership (TPP) negotiations. He talked about the TTIP as a new-generation free trade agreement that will set new norms of investment and doing business in the entire world. The talk instantaneously jumped to North Africa. A lady stressed that it was important for the region to sign a series of free trade agreements with the countries of the region in order to ensure its economic development in this new era. This is the very issue on my mind nowadays. It appears to me that, if a given country does not improve its investment climate and codes of doing business, establish a rule-based public administration system, and guarantee economic liberalization, it can only be a market, not a partner. No matter how many free trade agreements it signs, they only bring local enrichment, not local economic development.   Take North African countries: they signed numerous free trade agreements with developed countries. But Egypt does not have electricity. Nor did it had gasoline as of yesterday. And its people are short of bread. Let me tell you what I think over an example.

As of 2012, the United States Patent and Trademark Office issued 276.788 patents, half to applicants from America and half to those from other countries. You can check the website of the Turkish – American Scientists and Scholars Association, TASSA, for more information. South Korea is in the top ten; Turkey is 37^th. In 2012, South Korea obtained 14.168 patents from the United States Patent and Trademark Office. Taiwan had 11.624 patents and earned the fourth place on the list. Turkey, on the other hand, had just 55 patents, half of which were earned by a single company, Arçelik. If it wasn’t for Arçelik, we would be sharing the 51^st place with Bulgaria.

But why? True, Turkey has legislation for patent protection, but it does not have a strong judiciary that will safeguard those rights. Even if we have the rules in place, we cannot execute them. If you are lacking the relevant institutional infrastructure, free trade agreements and rules will not help. Indeed, institutional infrastructure refers to something beyond the judiciary. You have to guarantee that the competitive structure in the relevant market is safe and sound, too. Studies reveal that strengthening the legislation concerning patent protection alone does not increase the number of innovations in a given product market. Innovations become implementable and obtaining a patent makes sense if relevant product market reforms are carried out and monopolies and impediments to market entry are brought down. In other words, an innovation does not have an economic significance unless it is marketed in a profitable way.

Let me derive two conclusions: first, Turkey might be lagging behind concerning patents because the Competition Authority is not fulfilling its responsibilities. Second, free trade agreements signed by an uncompetitive country are as useless as patents issued for uncompetitive markets. Those wondering how to act in the TTIP and TPP processes first have to look in the mirror.

Speaking on South Korea and Taiwan; South Korea demonstrated for freedoms in 1987. Back then, the country had a GDP of $5.500 (per capita GDP with fixed 2000 prices). Demonstrations in Taiwan also coincide with this GDP threshold. Turkey exceeded the $5.500 GDP threshold in 2012. It is also worth noting that just like Turkey; Brazil has recently surpassed the threshold. Let this be a clarification for those who do not bother with details.

This commentary was published in Radikal daily on 28.06.2013