The United States is right to deepen and strengthen trade ties with countries in the dynamic Asia-Pacific region, but it's only worth doing so if a high-standard TPP is in place. If the U.S. fails to secure high IP standards in the new trade arrangements it enters into, the future banquet of consequences will present a bleak feast for its workers and economy.
Winning the Race 2012 Memos
As the 2012 presidential campaign moves in the final stage, ITIF is presenting general principles and specific recommendation ideas across several policy areas we believe the next President and Congress should adopt to restore U.S. global competiveness and prosperity.
As chronicled in Innovation Economic: The Race for Global Advantage, the United States is losing its once formidable edge as an innovator. Many other nations are putting in place better tax, talent, technology and trade policies, and reaping the rewards in terms of faster growth, more jobs, and faster income growth. It’s not too late for the United States to regain its lead but it will need to act boldly and with resolve.
Week by week until the November election, the Winning the Race series will put forward creative yet pragmatic ideas in policies affecting taxes, trade, education, broadband, the digital economy, clean energy, science and technology and other areas. Taken as a whole, the series represents a new Innovation Consensus to replace the outdated Washington Consensus.
Memo One (September 3, 2012): Boosting Innovation, Competitiveness, and Productivity
Memo Two (September 10, 2012): Trade and Globalization
Memo Three (September 17, 2012): Corporate Tax
Memo Four (September 24, 2012): Digital Communication Networks
Memo Five (October 1, 2012): Traded Sector Industries
Memo Six (October 9, 2012): Digital Economy
Memo Seven (October 15, 2012): STEM Skills
Memo Eight (October 22, 2012): Clean Energy
Memo Nine (October 29, 2012): Science and Technology
Memo Ten (November 5, 2012): Overcoming the Barriers
Complete List of Policy Recommendations: Top Policy Recommendations for the Obama Administration to Help the United States Win the Race for Global Advantage
Ensuring the Trans-Pacific Partnership Becomes a Gold-Standard Trade Agreement
The fourteenth round of negotiations toward the Trans-Pacific Partnership (TPP) Agreement begins in September 2012. The United States is doing the right thing in pursuing deeper economic and trade integration with key Asia-Pacific partners; but the effort will only be worth it if it concludes with a gold-standard trade agreement that sets the standard for future trade deals the United States enters into.
As this report—which updates the May 2011 report, Gold Standard or WTO-Lite? Why the Trans-Pacific Partnership Must Be a True 21st Century Trade Agreement—documents, a number of significant outstanding issues remain to be negotiated and successfully concluded, especially those regarding IPR protection and enforcement as well as market access rights, if the TPP is to be regarded as a true 21st century trade agreement. Moreover, the past year has seen insufficient, albeit some, progress by TPP parties in removing trade barriers. For instance, six TPP parties remain on the United States Trade Representative’s (USTR’s) Special 301 Watch or Priority Watch Lists, which identify countries that provide inadequate intellectual property rights protections, signaling that significant intellectual property protection issues persist among TPP countries. Only two other TPP parties (besides the United States) have joined the Government Procurement Agreement (GPA). Significant barriers to foreign direct investment, especially in the telecommunications sector, remain in many TPP countries. In fact, a comparison of USTR’s 2011 and 2012 National Trade Estimate Reports on Foreign Trade Barriers—which documents countries’ significant barriers to trade, whether they are consistent or inconsistent with existing international trade rules—reveals some improvement over the past year but more so the persistence of the majority of the previously documented trade barriers among TPP partners.
Foreign IT IP Theft Damages U.S. SME Manufacturers
It’s vital that that the United States pursue a “whole of government” approach to combat foreign IT IP theft. This starts with the quality of trade agreements the United States enters into (and the trade infringement remedies they permit) and continues through the effectiveness of U.S. agencies and policies charged with combatting IP theft and enforcing trade agreements. While these efforts are spearheaded by the U.S. Trade Representative’s Office, the U.S. International Trade Commission, and particularly U.S. Customs and Border Protection on the enforcement side, the U.S. Federal Trade Commission (FTC) also has a vital role to play in cracking down on foreign manufacturers who are ripping off U.S. intellectual property and using stolen information technology in their products.
Ending the Piracy Subsidy
The United States must finally resolve to shut down rampant innovation mercantilism and use its still-considerable economic and political clout to marginalize countries that don’t play by the rules. Any steps the Federal Trade Commission can take in that direction cannot come soon enough for American manufacturers, design and process engineers, software designers, scientists, chemists and inventors – in other words the core of our economic future.