“The continuation of this so-called TRIPS waiver by the USTR is a wake-up call that stands out from the sound of silence on the application more broadly.”
As former chairman of the House Judiciary Committee and co-author of important patent laws, I have a particular interest in supporting and protecting intellectual property rights in the United States. So I took notice last month when the Office of the United States Trade Representative (USTR) released its latest Special 301 Report on Intellectual Property Protection and Enforcement.
This report, which the USTR publishes each spring, provides a comprehensive overview of the bureau’s research into the “adequacy and effectiveness” of the intellectual property protection and enforcement mechanisms of our global trading partners.
The importance of the findings of the 301 report should not be underestimated. IP-intensive industries accounted for almost half – 41% – of US economic output in 2019. These industries directly employ more than 47 million Americans and indirectly support an additional 15.5 million jobs. In the interest of our nation’s continued economic growth, our foreign business partners must abide by their commitments to respect US intellectual property.
The USTR plays a critical role in holding our business partners accountable. And it’s commendable that the Commerce Bureau has once again pledged to address unfair trade policies that “fail to provide adequate and effective intellectual property protection” for U.S. intellectual property-intensive sectors. .
But even the most laudable statement means little unless it is backed by resolute action.
A year and a half into the Biden administration, this USTR has yet to use its powers to strengthen U.S. intellectual property protections overseas — a goal Ambassador Katherine Tai made explicit in her trade policy program for 2022.
Arguably the only real action the USTR has taken so far regarding IP enforcement is cutting the other way. At the World Trade Organization’s Intellectual Property Council, the administration agreed to waive U.S. intellectual property rights to Covid-19 vaccines.
The pursuit of this so-called TRIPS waiver by the USTR is a wake-up call that stands out from the sound of silence on the app more broadly.
Consider the situation in India, Brazil and Japan, where lack of action against digital video piracy has, for years, led to the widespread theft of licensed video content from American film and television producers. Globally, digital video piracy costs our economy between $45 billion and $111 billion each year. Holding our business partners accountable for this theft would bring those revenues back to US content producers, helping to create hundreds of thousands of jobs and grow our economy in the process.
Or look at the situation in Korea, where pharmaceutical regulators use opaque and outdated cost-effectiveness standards to keep innovative medicines and healthcare products out of their domestic market. The practice is in clear violation of the U.S.-Korea Free Trade Agreement, in which Seoul pledged to “appropriately recognize the value” of patented pharmaceuticals and medical devices in its rates. reimbursement.
In Indonesia, the lack of protection against unfair commercial use of agricultural chemicals and pharmaceuticals prevents US manufacturers from competing on a level playing field.
And the uneven application of the recently concluded United States-Mexico-Canada agreement has raised concerns about the commitment of our North American trading partners to the intellectual property provisions of the agreement. In Mexico, for example, a lack of adequate funding has hampered legislative efforts to reduce intellectual property theft such as counterfeiting, copyright infringement, and patent protection for pharmaceuticals.
Additionally, troubling proposals for Mexico’s federal procurement law threaten to undermine the bidding process established by the USMCA, further eroding our southern neighbor’s compliance with the trade deal.
These are just a few examples of the myriad trade barriers that disadvantage American workers and businesses in foreign markets.
The economic effects of an inadequate application of trade rules are considerable. Counterfeit goods, software piracy and trade secret theft cost our economy between $225 billion and $600 billion each year. These estimates do not include the cost of patent infringement, which undoubtedly produces billions of additional dollars in economic damage.
Such losses affect our entire economy. When our trading partners get away with intellectual property theft, the United States loses jobs. Innovation, our engine of economic growth, is slowing down. And consumer health and safety are at risk.
As President Obama’s Intellectual Property Rights Enforcement Coordinator has said, intellectual property theft does more than reduce market access and limit our ability to export our products. It also puts Americans at risk. “Imagine learning that the toothpaste you and your family have been using for years contains a dangerous chemical,” she wrote in a plea for greater enforcement of trade rules.
Congress is starting to lose patience with the Biden administration over trade enforcement. This year’s Special 301 Report does nothing to reassure members that the USTR takes its mandate in this area seriously.
In two recent hearings before House and Senate committees, lawmakers stressed to Ambassador Tai the need to hold our business partners accountable.
Our country’s top trade official agreed. In her responses to questions, Ambassador Tai endorsed the idea that our trade agreements are “more than just words on paper” and stressed the importance of aggressive enforcement of our trade agreements.
Yet words are only as powerful as the action that follows. Without strong, sincere, and consistent monitoring of trade enforcement, unfair trade practices will continue to increase globally, to the detriment of American innovators and our economy as a whole.
That’s not to say that all of the USTR’s work so far has been in vain. The office deserves praise for its commitment to a worker-centered trade policy agenda. After all, international trade supports one in five jobs in the United States. Trade-related jobs have grown four times faster than other jobs since the early 1990s. And people who work in intellectual property-intensive industries earn higher wages and receive better benefits than workers. other sectors of the economy.
The USTR can support these workers — and secure America’s future economic competitiveness — by holding our trading partners to their commitments to respect American intellectual property.
There is a lot of work to do. This year’s Special 301 Report identifies 27 countries that the USTR has placed on the “priority watch list” or “watch list” due to concerns about unfair trade practices. These lists name some of the largest trading partners of the United States, including Mexico, Canada, Brazil and India.
The USTR has identified problem areas. Good. Now is the time to take effective enforcement action.
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