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Thursday, August 10, 2017

ANALYSIS/OPINION:

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.

Matt Schlapp is chairman of the American Conservative Union.


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