Strict IP Protections Threatens to Jeopardize Other TPP Concessions, Say Cato Panelists

“If the U.S. dropped out of the TPP negotiations tomorrow, the IP chapter would be written like that,” said Watson. “These other countries have pretty much agreed on what it is they want to have in the TPP on IP. And the U.S. is pushing something else … This requires a lot of negotiating capital to get all the countries moved over there to the U.S. position. What else is the U.S. giving up?” The U.S. is insisting on 70 years of copyright protection after the death of the copyright holder, as opposed to the 50 year limit preferred by nearly all other 11 TPP participant nations, said Watson. WikiLeaks' disclosure of a confidential TPP chapter dated August 2013 prompted advocacy groups to claim there remains significant disagreement on TPP IPR provisions (see 13111323).

The U.S. IPR stance jeopardizes the “perceived legitimacy” of the U.S. TPP trade regime, said Margot Kaminski, executive director at the Information Society Project and a lecturer at Yale University. The participant nations may choose to maintain tariff and non-tariff barriers on agriculture, and other sectors, in exchange for IPR concessions, said Kaminski. But Trade Promotion Authority legislation, also known as fast-track, provides a potential mechanism to counteract Industry Trade Advisory Committee (ITAC) influence on USTR, said Kaminski, adding that the IPR ITAC is manned solely by big-content and big-pharma with virtually no internet companies.

“Fast-track could be changed to have a system that allows less capture at the executive branch level,” said Kaminski. “Right now Congress puts in negotiating objectives, but there’s no consequence if the executive branch chooses to ignore them.” The failure to pass the Stop Online Piracy Act, introduced in 2011, however, shows Congress has some ability to contest corporate IPR interests, said Kaminski.

Former Senate Finance Committee Chairman Max Baucus, D-Mont., Finance Committee ranking member Orrin Hatch, R-Utah, and House Ways and Means Chairman Dave Camp, R-Mich., introduced the current iteration of TPA, the bicameral Bipartisan Congressional Trade Priorities Act of 2014 (here), on Jan. 9. The legislation, however, mandates the “accelerated and full” implementation of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), a pact brokered during the WTO Uruguay Round of the General Agreement on Tariffs and Trade in 1994 (here), provisions IPR detractors criticize.

The bill also calls for adherence to the Nov. 14, 2001 WTO declaration on TRIPS Agreement and Public Health, designed to ensure that trade agreements foster innovation and promote access to medicines (here). The legislation states U.S. free trade agreements should contain IP protection “similar” to U.S. law, while providing significant protection for new and emerging technologies and new methods of transmission and distribution. Hatch, speaking at a U.S. Chamber of Commerce event on Jan. 29, criticized President Barack Obama’s unwillingness to muster support for the legislation among Democratic congressional ranks (see 14013027). Democrats rejected the legislation (see 14021307).

Strong protection of IPR is critical to boosting U.S. exports through its free-trade agreements, said Cato panelist Tom Giovanetti, president of the Institute for Policy Innovation. “The largest silo of U.S. exports are the core IP industries. This is not a narrow set of IP industries. This is the main thing that we export,” said Giovanetti. “Even our agricultural exports are primarily dependent on patent protection. The aerospace parts, the chemicals … all of these products are patented.” The IPR provisions the USTR is advocating in TPP are rightfully consistent with U.S. law, said Giovanetti. The USTR is also pushing contentious 12 year exclusivity on biologics as part of its IPR regime.

“Of course we should expect USTR to be advocating 12 years of data exclusivity on biologics. Of course we should be expecting them to advocate a commensurate copyright term with what we have in U.S. law,” said Giovanetti. “What is the alternative? Is the alternative just for USTR to be out there advocating policies that are not reflected in U.S. law?” Many lawmakers and industry officials have pressed USTR to ensure 12-year exclusivity remains in a final TPP pact (see 13120415). Moreover, since the ratification of TRIPS, foreign nations have increased funding for research and development, said Giovanetti, claiming strict IPR rules produce innovation. IPR critics say strict IPR regulations prevent impoverished communities across the globe from accessing medicine (see 13111323).

But the inclusion of strong IPR measures in TPP fundamentally sacrifices free trade principles that foster more commerce and provide cheaper goods to consumers worldwide, said Watson. The comprehensive elimination of all trade barriers is the ultimate target of free trade negotiations, and realistically industry will not recant TPP support if strict IPR rules are excluded, said Watson. “Large-scale industry groups … yes they support IP in the trade agenda, but I don’t think it’s such a big issue that they would allow it to take the whole agenda hostage,” said Watson. “There’s a political calculation going on at USTR that I think is missing some pieces … on net, it may be adding in intellectual property does more to harm the political liability of free trade agreements, then it does to bring on any kind of real support.” -- Brian Dabbs