Free Trade, Fair Trade, and the Fakes

Free Trade, Fair Trade, and the Fakes

For two decades, the United States and its trading partners have pursued free trade agreements aimed at reducing tariffs, opening borders to commerce, expanding trade, and addressing impediments or non-tariff barriers to trade.  Critics of these agreements protest the failure to use these negotiated agreements to address "fair trade" — an umbrella reference to labor policy, job losses, environmental policy, product safety, and immigration issues.  A recent online debate on the Council on Foreign Relations website highlights that this controversy will likely be on the agenda for our next Administration to address. 

There is one policy area, however, where free trade and fair trade have found a common ground:  the fight against fakes.  Each of the free trade agreements contains provisions relating to intellectual property rights (IPR) and the protection and enforcement of IPR.  While there is some slight variation in the specific IPR provisions of these free trade agreements, the general thrust has been fill some of the deficiencies in the WTO's IPR enforcement standards and the TRIPS agreement provisions.  

Last October, the US Trade Representative announced a new initiative with the European Union, Japan, Korea, New Zealand, Switzerland, Canada and Mexico to negotiate an Anti-Counterfeiting Trade Agreement (ACTA). Now Austrailia has agreed to join the ACTA negotiations.  The goal, the USTR's office said, is to "set a new, higher benchmark for enforcement that countries can join on a voluntary basis."  No mention is made of "how high" over what "benchmark."  Our aim should be high.  USTR should encourage these countries to recognize the IPR enforcement provisions in the Oman Free Trade  Agreement as an example where countries mutually recognize the importance of a strong IPR enforcement regime is important for the protection of the public, and to look beyond that.  The ACTA agreement should ensure that border control officials are empowered to stop illegal products at the border and clothed with ex officio authority to enforce IPR laws; the judiciary should be required to seize and destroy illegal goods at the request of the IPR owner; there should be enhanced penalties when the health and safety of the public is threatened by the distribution of counterfeit products; a permanent framework for sharing of information relating to counterfeit products and cooperation among law enforcement authorities and IPR owners; and the liability of third parties such landlords and internet traders who are not mere innocents in the promotion of trade in these illegal products are just some of the topics that need to be addressed.  The USTR has recently invited public comment on specific subjects to be addressed by this Agreement. In the words of the USTR's office, the goal is to provide "leadership in the fight against IPR counterfeiting and piracy" among "governments committed to strong IPR protection."  This group cannot afford to reach an agreement that is merely a step above TRIPS. 

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