It’s no secret that the U.S., specifically certain American industries and their champions in the U.S. government, are less than pleased with the state of intellectual property rights enforcement in China. The big players here include pharmaceutical companies, the entertainment industry, and software developers.
What are their options? One line of attack is through multilateral negotiations and use of multilateral organizations, like the WTO. These industries were instrumental in having IP rights included in the trade agenda in the 1990s via the Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement. This was part of the grand bargain struck between developed and developing nations when the WTO was established. The promise: we’ll throw you a bone when it comes to areas like agriculture if you’ll agree to tougher IP laws and market access for services (e.g. banking and finance).
Some would argue that the developing countries are still waiting to this day for that promise to be fulfilled, but that’s a subject for another post. On the IP side, those Member States adopted TRIPs and agreed to the minimum standards established under that agreement. As other countries joined WTO, including China, they also agreed to uphold TRIPs.
The problem with that, from the industry perspective, is that TRIPs sort of froze everything in time. Sure, the agreement forced many developing countries to upgrade their legal systems. China, for example, engaged in a sweeping change of its IP laws in the late 90s/early 2000s, including amendments to the trademark, copyright and patent laws.
All well and good, but industry did not get everything it wanted, and going back to the WTO and getting that consensus-driven body to adopt tougher standards in a future negotiating round has proven impossible. Indeed, we’ve been stuck in the next negotiating round (Doha) for many years now, with no end in sight.
So much for the WTO. But if industry is not happy about IP in China, what else can be done? Well, there’s always bilateral negotiation, and certainly whenever the U.S. and China get together for official talks, intellectual property issues are high on the agenda. Several notable victories have been made over the past few years, including the fairly recent debate over China’s “indigenous innovation” policy, which has been revised to reflect industry concerns.
However, bilateral negotiations can only get you so far. Certainly the pharmaceutical, entertainment, and software industries (among others) have had agenda items hanging out there for years, with no indication that their wishes will be granted by Beijing, notwithstanding pressure by the U.S. government.
So much for bilateral talks. Any other options? If multilateral and bilateral solutions aren’t working, there is always the regional option. If the entire WTO membership won’t play ball, and China refuses to accede to demands by itself, what about a regional solution?
Enter the Trans-Pacific Partnership:
Ongoing trade negotiations involving the United States and eight other Pacific Rim nations have come under increasing scrutiny for the intellectual property provisions being discussed, amidst concerns that they could lead to higher drug prices, harming public health and access to medicines in developing countries.
The objective of the TPP is to establish a free trade agreement among the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. Five rounds of negotiations have taken place since March 2010; still in its early stages, the TPP has been the subject of growing global interest. (ICTSD)
What’s the plan here? The U.S. has a history of entering into bilateral and regional trade agreements and including IP provisions that are tougher than TRIPs standards. This is usually referred to as “TRIPs plus” and includes issues like data exclusivity and patent linkage (for the drug industry) and extension of copyright protection (for the entertainment industry). The U.S. strategy has been criticized in the past as utilizing unequal power to foist industry-driven legal reforms on developing countries.
In other words, the U.S. couldn’t get certain reforms past the entire WTO membership, but perhaps it can pick off developing nations via bilateral, or alternatively regional, trade agreements. This is one of the issues surrounding the TPP negotiations.
The language recently released by USTR gives a clue to where negotiations are at this point:
TPP countries have agreed to reinforce and develop existing World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) rights and obligations to ensure an effective and balanced approach to intellectual property rights among the TPP countries. Proposals are under discussion on many forms of intellectual property, including trademarks, geographical indications, copyright and related rights, patents, trade secrets, data required for the approval of certain regulated products, as well as intellectual property enforcement and genetic resources and traditional knowledge.
First, note that the goal is to “reinforce and develop” TRIPs, which is as close to a direct reference to “TRIPs+” that we’re going to get. It means provisions that raise TRIPs standards and make further progress on issues important to U.S. industry.
Second, the list of areas under discussion not only include the ones driving the discussion (copyright, patents, trade secrets and data protection), but also throws in other IP issues that are important to developing countries (genetic resources and traditional knowledge).
Third, there has obviously been some pushback on the U.S. agenda, otherwise we would not be seeing language like “balanced approach” and some of those line items mentioned above. Cautionary comments from one nation, New Zealand, have already been leaked to the public (read it here).
What does all this have to do with China? After all, the TPP negotiations do not include China at the moment, and many have characterized the U.S. move as a way to coalesce regional support behind the U.S. as an alternative to China, a rising Pacific power. Indeed, much of the coverage of the TPP in the past couple of weeks has focused on defense issues.
But even if China never becomes a member of TPP, such a regional agreement would have a significant effect on international IP standards. If the U.S. is successful in getting all of these nations to sign off on TRIPs+ provisions, then those standards become more widely recognized internationally.
For example, if the TPP includes a minimum copyright protection period of 70 years (many nations only have a 50-year period), the U.S. could at some point bring this up in bilateral negotiations with China, essentially saying “Hey, why are you guys holding out on this issue? All the other nations around you already changed their copyright laws. Why are you the only hold out?”
In effect, when it comes to the TPP, U.S. strategy may include not only the military containment of China, but also a legal encirclement with respect to IP laws.