How Trump can learn from Obama’s TPP mis­takes

The North Amer­i­can Free Trade Agree­ment re-ne­go­ti­a­tions must in­clude ro­bust pro­tec­tions for in­tel­lec­tual prop­erty

The Washington Times Daily - - COMMENTARY - By Matt Schlapp Matt Schlapp is chair­man of the Amer­i­can Con­ser­va­tive Union.

Dur­ing the 2016 cam­paign, Don­ald Trump bucked party or­tho­doxy on the left and the right, promis­ing to with­draw from the Trans Pa­cific Part­ner­ship (TPP) and re-ne­go­ti­ate Amer­ica’s “hor­ri­ble trade deals,” in­clud­ing the North Amer­i­can Free Trade Agree­ment (NAFTA). The pres­i­dent’s pledge to stand up for Amer­i­can work­ers and busi­nesses helped ce­ment the elec­tion, mov­ing vot­ers in Michi­gan, Penn­syl­va­nia, Wis­con­sin and Ohio and flip­ping those states red.

Th­ese vot­ers rec­og­nized that the pres­i­dent is a fighter who re­jects mil­que­toast ap­proaches to trade. It is good that, in the or­di­nar­ily sleepy days of mid-Au­gust Wash­ing­ton, the ad­min­is­tra­tion is con­ven­ing NAFTA re-ne­go­ti­a­tions to de­liver on the pres­i­dent’s prom­ise to im­prove “the sin­gle worst trade deal ever.” As a sup­porter of free trade, I ap­plaud this ef­fort.

Un­for­tu­nately, in an echo of the spe­cial in­ter­est lob­by­ing that led to Pres­i­dent Obama’s TPP de­ba­cle, large, multi-na­tional cor­po­ra­tions are lob­by­ing the Trump ad­min­is­tra­tion to use the deeply flawed TPP as a go­ing-in po­si­tion for rene­go­ti­at­ing NAFTA’s in­tel­lec­tual prop­erty pro­vi­sions. This is the wrong ap­proach, cer­tain to di­min­ish Amer­i­can jobs and stall the econ­omy.

Dur­ing the TPP ne­go­ti­a­tions, in an ef­fort to be all things to all peo­ple, Mr. Obama aban­doned Amer­i­can cre­ators and in­no­va­tors. For ex­am­ple, his mis­guided agree­ment would have lim­ited the length of data ex­clu­siv­ity pro­tec­tions for bi­o­log­ics from 12 years to five. And it would have ex­ported a con­vo­luted ver­sion of the bro­ken “no­tice and take­down” sys­tem of the Dig­i­tal Mil­len­nium Copy­right Act — a fee­ble tool for copy­right hold­ers that lacks the teeth re­quired to ef­fec­tively pro­tect their works on­line.

Most im­por­tantly, TPP’s weak in­tel­lec­tual prop­erty pro­vi­sions would have im­per­iled Amer­ica’s thriv­ing IP in­ten­sive in­dus­tries, which ac­cord­ing to a re­port by the Com­merce De­part­ment and the United States Patent and Trade­mark Of­fice, ac­count for $6.6 tril­lion in value added in 2014, or 38.2 per­cent of GDP. Th­ese in­dus­tries di­rectly and in­di­rectly sup­port 45.5 mil­lion jobs, ac­count for $842 bil­lion in mer­chan­dise ex­ports, and gen­er­ate $81 bil­lion in ser­vice ex­ports.

In other words, the Obama ad­min­is­tra­tion’s in­dif­fer­ence to the plight of cre­ators and in­no­va­tors would have made it harder for Amer­i­can busi­nesses to cre­ate high-qual­ity jobs and strengthen the econ­omy at home.

When it comes to re-ne­go­ti­at­ing NAFTA, we need to move back from the brink — not fall over it.

The orig­i­nal NAFTA in­clud­ing ground­break­ing pro­vi­sions on in­tel­lec­tual prop­erty, es­tab­lished the pred­i­cate for the WTO TRIPS Agree­ment; how­ever, NAFTA can and should be mod­ern­ized to clar­ify and en­hance th­ese obli­ga­tions, par­tic­u­larly as many gov­ern­ments around the world have sought to skirt in­ter­na­tional law, and some have even en­gaged in bla­tant ex­tor­tion of U.S. com­pa­nies by weaponiz­ing their own an­titrust laws.

The new NAFTA ne­go­ti­a­tions will de­ter­mine whether for­eign busi­ness will rec­og­nize and re­spect Amer­ica’s cre­ative and in­no­va­tive prod­ucts. Th­ese ne­go­ti­a­tions will, for ex­am­ple, set the con­di­tions un­der which le­gal im­mu­nity should be given to in­ter­net com­pa­nies in Mex­ico and Canada when Amer­i­can cre­ations are stolen on their dig­i­tal net­works.

Put an­other way, they will de­cide if the U.S. gov­ern­ment sells out Amer­ica’s lead­ing job cre­ators — or stands be­hind them. This is the mo­ment for the Trump ad­min­is­tra­tion to es­tab­lish a stronger tem­plate to pre­vent the con­tin­ued theft of valu­able U.S. in­tel­lec­tual prop­erty.

Mr. Obama ar­gued that we should ex­pand lim­i­ta­tions to prop­erty rights and “bal­ance” the rights of Amer­i­can cre­ators against the needs of other coun­tries’ spe­cial in­ter­ests. That ap­proach — harken­ing back to the days of AOL.com, com­pact discs, and Geoc­i­ties in­ter­net pages — is a recipe for Amer­ica’s de­cline in to­day’s ma­ture and ro­bust on­line mar­ket­place.

Es­pe­cially in Mex­ico and Canada, to­day’s in­ter­net bears lit­tle re­sem­blance to that of 1998. In fact, only 1.2 per­cent of the Mex­i­can pop­u­la­tion had in­ter­net ac­cess in 1998, com­pared to 36 per­cent to­day. Over the same pe­riod, Canada went from less than 40 per­cent to 88 per­cent.

As a deal­maker, the pres­i­dent knows bad trade deals are of­ten the prod­uct of old as­sump­tions. Look­ing to out­dated U.S. laws for guid­ance — in­stead of learn­ing from that ex­pe­ri­ence to rene­go­ti­ate a bet­ter deal — is a for­mula for fail­ure.

As a free mar­ket con­ser­va­tive, I strongly be­lieve in free trade. But trade is not free when it is gamed by mar­ket ma­nip­u­la­tion, cheat­ing and steal­ing. If a treaty agree­ment al­lows com­pa­nies in Mex­ico and Canada to profit from stolen Amer­i­can prod­ucts and ideas and usurp U.S. prop­erty rights, that deal would vi­o­late free mar­ket prin­ci­ples and would con­sti­tute a breach of the Con­sti­tu­tional obli­ga­tion of our gov­ern­ment to pro­tect prop­erty rights.

When run­ning for of­fice, Pres­i­dent Trump rightly crit­i­cized the Obama ad­min­is­tra­tion’s naive ne­go­ti­a­tion of the TPP, say­ing the deal al­lowed other coun­tries “to come in, as they al­ways do, through the back door and to­tally take ad­van­tage of every­one.”

There’s no rea­son to in­vite NAFTA trad­ing part­ners to do the same. The swing vot­ers who sup­ported the pres­i­dent and the move­ment con­ser­va­tives who stand be­hind him are count­ing on a con­tin­ued strong stand in NAFTA re-ne­go­ti­a­tions. Mr. Trump can start by break­ing with Mr. Obama and in­clud­ing strong, ro­bust pro­tec­tions for in­tel­lec­tual prop­erty in NAFTA.

IL­LUS­TRA­TION BY LINAS GARSYS

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