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May 30, 2012

TPP Chiefs Raise Doubts about USTR’s Corporate IP Wish List

At the May 13th stakeholder briefing of the Trans-Pacific Partnership (TPP) trade talks outside Dallas, at least six countries' Chief Negotiators began to openly distance themselves from the Office of the United States Trade Representative (USTR), particularly from USTR’s radical intellectual property (IP) proposals, which would expand the scope and duration of pharmaceutical monopolies and challenge internet freedom.

In the past, these stakeholder briefings have felt like exercises in the art of saying little. USTR has sought to keep all nine countries on a common, limited message. But perhaps USTR can only push other countries and the public so far.

Early in the session, I asked the Chiefs:

The past year has witnessed the rise of an internet freedom social movement, with more than 3 million people petitioning the US Congress to block SOPA [the Stop Online Piracy Act] and tens of thousands protesting in the streets across Europe to shut down ACTA [the Anti-Counterfeiting Trade Agreement]. I think in Poland, these may have been the largest demonstrations since the Solidarity movement. Even Germany’s ministry of economic development is recommending against developing countries signing ACTA. Given that you are not releasing the TPP text, how will you assure people that the TPP will not pose similar problems?

Chile kicked things off, answering:

We are nine countries with many different positions—we are not all the same.

This may sound tame, but for those listening to the evolution of TPP sound bites, it was a surprisingly public distancing from USTR and its copyright and enforcement demands. And it set the pace for the day.

Peru’s Chief followed by noting his country’s wish to maintain its “delicate balance” on IP – a reference to the deal Peru struck with USTR only a few years ago in another free trade agreement. USTR would love to throw out and replace that deal now. But Peru, rightly, is not budging. A later question from Derechos Digitales asked how Chile and Peru would preserve their rules on copyright. Chile’s Chief replied that some proposals on the table go far beyond the national standards, and an ultimate answer could not yet be provided.

Burcu Kilic of Public Citizen asked Chief Negotiators:

It seems that the IP chapter is one of the toughest to negotiate. This week while we were here in Dallas, we kept hearing from PhRMA [Pharmaceutical Research and Manufacturers of America] and BIO [Biotechnology Industry Organization] that “strong IP rules” encourage foreign direct investment [FDI] and promote innovation. However, there is a lack of empirical evidence that TRIPS-plus provisions, such as those USTR proposes, lead to increased FDI or local innovation. What I would like to ask is whether countries are consulting economists and development or innovation specialists while negotiating IP rules?

Several of the Chiefs exchanged knowing smiles, suggesting that the question hit a hot topic.

After a period of silence, the New Zealand Chief spoke up, noting the complexity of IP and the need for a system that promotes innovation. The US Chief spoke next, stating that “obviously, all trade policy is based on evidence that we have.” The US Chief cited the US-Singapore free trade agreement as a positive example, and asked the Singaporean Chief if she would like to speak to the question.

That's when things got really interesting.

Singapore’s Chief softly replied, “Do you think I have a choice?” She proceeded to note the interest of investors in the country’s “strong IPR protection,” but then stressed:

We are mindful that there would not be evergreening because that would stifle future innovation.

Patent evergreening is one of USTR’s key (and most pernicious) IP demands in the TPP. It is the process by which companies extend pharmaceutical monopolies, for example by patenting minor variations on old medicines and other inventions (see e.g. Articles 8.1, 8.2, 8.12 of the US proposal, and analysis here). It does limit innovation. Singapore’s statement is a strong rejection of USTR’s position, from one of the countries most likely to support most reasonable IP proposals.

Next, Malaysia, Brunei, Chile and Vietnam's Chiefs each spoke up to describe IP as a sensitive issue in their countries and in the negotiations. Malaysia emphasized the need for a balanced system between the “rights of investors” and access to medicines and knowledge. Vietnam described a need to maintain two balances: first, a balance between right owners and the public interest. Second, making “commitments that we know we can implement.” He made the point that decisions to invest in a given country are not solely dependent on IP:

We all know who the largest recipient of FDI is, and it’s not Singapore. 

Woah. In diplo-speak, this is strong stuff. (It’s a reference to China BTW.) USTR did not look happy.

Round after TPP round, Asia-Pacific region civil society groups have articulated concerns that USTR's TPP demands would compromise access to lifesaving medicines. But USTR's arguments that its proposals will spur innovation and investment aren't holding up, either. After all, what is "strong IP"? It's not as though the economic literature defends patent evergreening and the rest of USTR's Big Pharma wish list. "Strong IP," to the limited extent we can identify its correlations or contributions to international investment, may relate more to effective implementation of common standards such as the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). And that is actually an argument that supports the position of several other countries in the negotiation – but not that of USTR.

Several countries in the negotiations have focused their proposals on increasing cooperation and making TRIPS work. USTR, by contrast, wants to change the regional standards to further favor multinational corporations. USTR’s proposals would limit regional pharmaceutical production and follow-on innovation capacity through increased monopoly privileges for Big Pharma. This cuts against USTR’s express stated TPP goal of promoting regional economic integration.

USTR has argued for the corporate interests of PhRMA, BIO, the RIAA (Recording Industry Association of America), etc., straight through the past two years of Asia-Pacific trade talks. USTR has often argued without evidence, sometimes against the evidence, and not made many friends in the process. Most of the TPP country Chief Negotiators noticeably distanced themselves from USTR on IP during the Dallas briefing.

It was a tough day to represent USTR, and the folks over there have our empathy - but not our sympathy.

Read more about USTR’s “Heavy-handed” tactics in the TPP negotiations here: http://www.citizenvox.org/2012/05/25/heavy-handed-tpp-tactics/

Read presentations from innovation policy experts to TPP IP negotiators here: http://www.citizen.org/TPP-round-in-Dallas

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