President Donald Trump clearly places a high priority on the role of improved trade policy in order to bring American jobs back home. Anti-dumping and countervailing duties, currency manipulation, and market access are all important matters in any trade policy. But no trade policy is complete without a vibrant, modern intellectual property component.
Intellectual property patents (on inventions like computer technology or breakthrough medicines; copyrights on creative works like books, movies, and music; and trademarks on the logos that help consumers identify trusted brands) are incredibly important to our national economy. Intellectual property (IP) industries provide nearly 45 million jobs, almost $1 trillion dollars in exports, and an incredible $6.6 trillion to the national economy of the U.S. — which equates to more than one-third of our GDP.
“China has made some progress, but it continues to be the source of ninety percent of the products that infringe IP rights seized at our border.”
So, it isn’t surprising that other countries that haven’t been able to match American ingenuity want to copy our innovation. As I testified before the Senate Finance Committee last year, strong intellectual property trade policy can help keep American jobs and grow the jobs of the future here.
Under President George W. Bush, the United States negotiated free trade agreements that included the most modern IP provisions in the world. While at first the Obama administration seemed willing to continue some of those policies, over the course of its eight years in office our IP trade policy increasingly withered. Trading partners that did not keep their commitments were not held accountable, and some IP provisions of the now-defunct Trans-Pacific Partnership were disappointingly weak.
As the Trump administration begins its efforts to revitalize American competitiveness, here are five suggestions for how better IP trade policy can help:
1) Trade is a Two-Way Street
Our existing trade agreements are the product of tough negotiations, and we should hold other countries to their commitments. Some countries are enjoying the fruits of open trade, but haven’t held up their end of the bargain. Those agreements allow us to file what amounts to an international lawsuit against countries that don’t follow the rules they agreed to.
The president has repeatedly said that he will renegotiate or withdraw from trade agreements that are not fair to the United States. To the extent that happens, full adoption and implementation of modern IP commitments should be a key factor.
2) Don’t Take “No” for an Answer
The U.S. seeks IP provisions in free trade agreements based on U.S. law; we ask our trading partners only to do what we do for ourselves. Unfortunately, other countries have been able to negotiate down from that high standard, allowing our FTA partners to short-change our creators and innovators. These American industries are the envy of the world, in large part because of our IP system.
And if they look at the long run, foreign governments do themselves a favor by creating an environment in which their innovative industries can flourish. So, whether negotiating new agreements or updating existing ones, we should not agree to allow other countries to apply lesser standards than we provide to our creators and theirs, alike.
3) China Isn’t the Only Problem
A lot of the ire about unfair foreign trade practices is directed at China. In the IP context, China has made some progress, but it continues to be the source of 90 percent of the products that infringe IP rights seized at our border. But focusing only on China would miss some important and perhaps surprising problem areas. Some developing countries, like India — and even countries we think of as advanced, like Canada — have major IP deficiencies.
4) Trade Policy Is Not IP Policy
The goal of U.S. trade policy is to eliminate unfair barriers and distortions to global markets for American products and services. Believe it or not, there are Americans who argue against us protecting our IP rights overseas. They transpose their ill-conceived IP policy goals onto trade policy, seeking to have the United States condone or even demand weaker protection for its innovators and creators overseas. These people would have us subsidize foreign businesses and consumers at the expense of American jobs and economic growth.
5) IP Does Even More than Produce Jobs and Economic Growth
Products and services offered in violation of IP rights can be poor quality and even dangerous. A study for Congress found bogus microchips of the kind intended for use in nuclear missiles and other military hardware. Counterfeit medicine and food products have killed people around the world. Studies have shown that piracy sites offering free downloads often come with a side of malware and identity theft. Not least, the proceeds of IP infringement go to criminal syndicates and even to fund terrorists.
Improving IP protection around the world is in our economic interest, and good for our consumers and national security.
Steven Tepp is a former U.S. trade negotiator. He is currently president & CEO of Sentinel Worldwide, an IP consultancy, and professorial lecturer in law at George Washington University Law School.