Yes, I know. Not a shocking headline. Of course politicians will use the issue of China intellectual property enforcement to their advantage. Nothing new there. However, when you see a transparent attempt to do so laid bare for the public to consider, well, it behooves this lowly blogger to stand up and say something.

Here are the basic facts from The Hill:

Top lawmakers on the Senate Finance Committee are asking federal trade officials to investigate China’s “rampant theft” of Americans’ intellectual property.

In a letter sent Monday to the International Trade Commission, both committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) their concerns that China’s lax enforcement of copyright protections has harmed “American competitiveness.”

To be specific, this letter was sent by Baucus and Grassley on April 16, just a week ago. My first reaction was a question: “What recently happened with China IP infringement to engender such a response?”

The letter is silent on what specifically prompted the move.

My second reaction was another question: “What’s the point of sending the letter?”

Here we have some answers, in the text of the letter itself:

We are writing to request that the U.S. International Trade Commission (Commission) conduct an investigation under section 332(g) of the Tariff Act of 1930 (19 U.S.C. 1332(g)) regarding the impact on the U.S. economy and U.S. jobs of intellectual property rights (IPR) infringement in China.

In other words, they want the ITC to investigate the state of IPR enforcement in China and report back to their committee. A rather normal occurrence in D.C., nothing surprising there for the most part.

Despite widespread evidence of the harm to U.S. industries, authors, and artists resulting from IPR infringement in China, the U.S. Government has not conducted a comprehensive economic analysis of the impact of China’s ineffective IPR protection and enforcement on the U.S. economy and U.S. jobs. To assist us in better understanding these impacts, we request the Commission to provide two reports[.]

Again, this doesn’t sound so bad. If no economic data is available, then someone should commission a report, right? That’s what government is supposed to do. By the way, the two reports concern: 1) Overview of IPR policies, review specifically of China’s indigenous innovation policy, and an economic impact assessment, due November 16 of this year; and 2) Quantitative study of IPR infringement impact and effects of indigenous innovation policy.

OK, I don’t want to let this post ramble on to several thousand words, so let me be blunt: this is all horseshit. Let me count some of my reasons for saying so:

1. This specific study may not have been commissioned before, but that doesn’t mean that other data is not readily available. I’m sure there are lots of folks out there (Keith Maskus at IIE for one) who could answer a lot of these questions right now based on completed research.
2. Every year, the U.S. Trade Representative’s Office prepares something called the Special 301 Report (here’s the 2009 edition) and sends it to Congress. The report details IP infringement and enforcement issues in “problem” nations worldwide – the report always has a sizable China section. Although the Special 301 Report does not have the kind of quantitative jobs and economic assessment data called for by Baucus and Grassley, it describes current problems in great detail, including ongoing negotiations and expected solutions.
3. What will Baucus and Grassley (Congress) do with these results? The Special 301 Report gives the administration the information necessary for bilateral negotiations. It can also guide Congressional actions, if the U.S. Congress was so inclined to pass applicable law in this area – what such a law would look like is a bit of a mystery to me, and if they tried to impose trade barriers on the basis of IP, such a law would probably be WTO inconsistent.
4. The reference to “indigenous innovation” in the letter caught my eye. Not only has this issue, which relates specifically to a Chinese requirement for companies to participate in government procurement programs, been of high import to foreign investors over here, but it was also front and center in a new draft rule put out by China’s Ministry of Science and Technology, a rule that liberalizes the proposed regime and makes it easier for foreign companies. There is actually a good chance, therefore, that this problem has already been solved. In any event, the USTR and the US Embassy folks have been all over this issue – they did not/do not need help from Congress. (Professor Stanley Lubman has written helpful articles on this problem and the new (better) policy.)

So if all this is not really necessary, why did they do it? To be blunt (again), 2010 is an election year and the American public has the attention span of a flea. They don’t know anything about IP and don’t want to hear a politician talk about it.

However, if a politician can work it into his stump speech that he has “acted tough” against China by “forcing the administration” to report on China’s “bad acts” — well, that sounds sufficiently macho if you’re running for re-election, which Grassley is.

Even if you don’t chalk this up to a 2010 election stunt, we can at least call it business as usual in Washington. Here is an issue that is handled by USTR (here’s USTR’s IP page), the Department of Commerce, basically the Executive Branch, and because of existing trade laws, Congress does not have a great deal of room to maneuver with respect to passing new legislation.

A lot of information about existing IP enforcement problems in China already exists, not to mention solutions that both sides are working on. Will knowing how many jobs have been lost due to motion picture piracy (hint: the MPAA already has these numbers, although I personally never trust their methodology) lead to any change in policy? Absolutely not.

“China needs to step up to the plate, live up to its international obligations and protect and enforce U.S. intellectual property rights,” Baucus said in a news release. (TechDailyDose)

This report does not move China further toward that goal. The entire exercise is a waste of time and energy.