On July 9, 2015, the
United Nations Foundation and the U.S. Chamber of Commerce hosted a briefing on
Capitol Hill entitled “Global Impacts of
American Intellectual Property.” The most significant takeaway came from
Patrick Kilbride, Executive Director of International IP at the U.S. Chamber of
Commerce’s Global IP Center (GIPC). He discussed the important role the United
States should play in influencing developing countries to adopt stronger protections
of IP rights. He pointed to GIPC’s February 2015 International
Index,
which scores and ranks countries based on different IP protections (patents,
copyright, trademarks, trade secrets, international treaties) and enforcement
mechanisms. (See my February blog for more on the
index.)
Mr. Kilbride said
that the best way for the U.S. to promote strong IP policies around the globe
is through multilateral trade agreements. He mentioned that the most recent IP-related
multilateral agreement, the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS), is over twenty years old. TRIPS established only minimum
standards for IP and many of the leading countries within GIPC’s International Index
have now surpassed these standards. Because of this, Mr. Kilbride said that it
is time for a new multilateral trade agreement with stronger IP standards. He
added that the current one under negotiation, the Trans-Pacific Partnership
(TPP), is an important place to start.
TPP would export
American IP protections to developing countries in the Pacific realm, thus
incentivizing more investment and innovation within those economies. However,
additional economic activity would not be the only benefit of a stronger IP
framework; mutual gains from trade are much higher with transactions that
contain strong protections of IP rights rather than weak protections of IP
rights.
Developing countries
also would vastly benefit from TPP because an expansion of trading partners
increases the number of buyers and sellers in a marketplace leading to more transparency,
accountability, consumer welfare, and, ultimately, economic growth. This is why
Mr. Kilbride declared that the global economy would be much better off if a
trade agreement with a strong IP framework could be reached with heavily
populated countries such as China, India, and Indonesia.
It is important to
remember that gains from trade are mutually beneficial but not necessarily equal.
If the TPP agreement is reached, the United States would benefit from the
positive externality of robust IP protections in other countries and from lower
trade barriers with countries in the Pacific realm. However, the positive impacts
for developing countries would be much greater if they adopt American IP protections,
incentivizing more economic activity and expanding trade throughout the global
economy. Developing countries grow significantly faster than developed countries
when there is an expansion in global trade.
That being said,
TPP and all multilateral trade agreements with strong IP frameworks are very
beneficial for all parties involved, including, most especially, consumers who
benefit from increased competition and lower prices.
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