Lobbyists, Politicians And USTR Planning A 'Rally' To Show 'Strong Support' For TAFTA

from the oh-really? dept

As the plans for the new TAFTA agreement are getting increasing heat and concern from the public, apparently the US Chamber of Commerce (a lobbying organization that has long favored these protectionist policies that seek to protect their members) along with the acting head of the USTR, Demetrios Marantis, and various "lawmakers," are planning to host a "rally" next week to pretend that there is "strong support" for such an agreement. Somehow, I doubt that this will bring out crowds of young people. Apparently this will be held on Capitol Hill and they'll be launching a "coalition" in support of "trans-atlantic trade." Sounds like a party.

Of course, this reeks of desperation on the part of the USTR and the Chamber of Commerce. The momentum against these kinds of agreements has been growing, and putting together a pretend rally where the only folks likely to show up are the representatives of big legacy businesses (apparently GE and IBM expect to attend) isn't going to mollify a concerned public.

I say this as someone who believes strongly in the value and importance of free trade. Trade barriers can create serious economic harm, especially for those they're supposedly designed to help. However, the reality is that these agreements are not really about free trade. They tend to be about helping out a few legacy businesses who don't want competition and don't want to deal with the impact of innovation. And, for reasons that are beyond me, the USTR thinks it's their job to help prop up those legacy businesses and to slow down the pace of innovation. I understand why the Chamber of Commerce does this (they're paid to), but it's pretty shameless for the USTR to be so obviously in the pocket of big business, rather than representing what is really in the best interests of trade policy across the board.

Filed Under: lobbyists, politicians, rally, tafta, tpp, trade agreements
Companies: us chamber of commerce

Senator Hatch's Plan To Give Hollywood The Key Seat At The Table For All Future Trade Negotiations

from the crony-capitalism dept

We recently wrote about Senator Orrin Hatch's plans to create a special new ambassador-level role within the USTR for someone focused solely on pushing copyright and patent maximalism around the globe. Hatch actually claimed that intellectual property issues don't get enough attention in international trade negotiations. This is ridiculous, as IP issues have actually been getting way too much attention -- so much so that the announcement of the bill came just days after a huge number of public interest groups put together a letter stating that we should take intellectual property out of international trade agreements entirely.

There was one oddity, of course: despite announcing the bill, and even having a bill number for it (S.660), Hatch did not immediately release the actual text of the bill he was proposing. That text is now out and the EFF has jumped in with a thorough analysis of why it's a disaster. Basically, as expected, this is not about more effective or reasonable stances on intellectual property in international trade agreements. No, the bill is fairly explicit that this is solely about helping out legacy companies push through what's in their own best interests, rather than the public's interest (which is what the Constitution says patents and copyrights are supposed to be about).

The new Chief “Intellectual Property" Negotiator would have to be approved by the Senate Finance Committee — of which Senator Hatch himself is the Ranking Member — and would be required to "be a vigorous advocate on behalf of United States innovation and intellectual property interests." That is to say, this representative wouldn't be there to represent the public interest, or the average Americans who are paying his or her salary.

Worse still, this proposal comes at the precise moment that the legacy content industry's trade agenda has shown itself to be most at odds with the public interest. In particular, opponents of an effective and permanent fix to the Digital Millenium Copyright Act's ban on phone-unlocking have cited language in recent trade agreements as a reason why any such legislation could be impossible — even though it's been described as simple "common sense" by the White House. Regardless of the truth of those opponents' claims, they slow the pace of change, even for extremely popular proposals. In other words, industry interests at the international level are trying to tie the hands of democratically elected legislators and dictate which laws are unacceptable.

Hollywood is already deeply, deeply embedded into the process of negotiating international trade agreements. It seems rather blatant to create a position whose role is pretty clearly designed solely to serve Hollywood's interests at the expense of the public. Senator Hatch is making it clear who he serves, and it's not the public. To be so explicit, and to state directly in the bill that the role of this job is to "advocate on behalf of... intellectual property interests" is incredible. Congress shouldn't be in the role of picking winners and losers, but Hatch has decided to write into the law that only one particular industry must win, even if it is obsolete.

As Upton Sinclair once famously wrote: "It is difficult to get a man to understand something, when his salary depends on his not understanding it." On this point, Hatch's proposal is clear: question the assumption that "vigorous" copyright and patent enforcement may be at odds with innovation, or that the public interest should supercede industry interest, and you're out of a job. Appointing a representative for the industries dedicated to "strong" copyright and patent laws all but guarantees that U.S. trade policy will reflect the industry-friendly regulations that representative is paid to promote, regardless of whether they are in the public interest.

Filed Under: ambassador, hollywood, intellectual property, negotiation, orrin hatch, trade agreements, ustr

Even As US Continues To Push Stronger Intellectual Property Laws Through Trade Agreements, It Ignores Those Agreements At Home

from the good-for-the-goose dept

Even as the US tries to ratchet up patents, copyrights and trademarks in international trade agreements, talking about how it's essential to protect the US's interests, it's amazing how the US ignores those same agreements at home. For years, we've talked about the still ongoing situation with Antigua, where the US was clearly found in violation of trade agreements, but has refused to do anything about it (other than unilatterally changing the free trade agreement in question in its own favor).

But that's just the tip of the iceberg.

Other countries are complaining that the US has lost at a variety of hearings in front of the WTO (handling disputes over those trade agreements) and then proceeded to ignore those rulings entirely.

“The conduct of the United States unscrupulously discredits the WTO dispute settlement system and also constitutes an affront to the intellectual property rights,” an ambassador from Cuba said today at the WTO.

At a WTO Dispute Settlement Body meeting today, a number of WTO members fired shots at the US delegation for its continued failure to change its laws to comply with WTO rulings that found it out of compliance on intellectual property-related issues.

The article lists out a bunch of countries all complaining that, while the US keeps pressuring them to adopt strict IP laws, the US routinely ignores the same clauses in the various free trade agreements it signs.

“It is very ironic to observe the United States projecting laws on intellectual property, despite keeping violations as egregious as Section 211,” under which the Bacardi Company continues to market rum labelled Havana Club, a mark which is otherwise owned by Cuba and partners. “This is one of the most famous cases of trademark counterfeiting and conducting misleading advertising by a company backed by the US legislation.”

And while a number of the countries complaining obviously have other issues with the US (Cuba, Venezuela), it's not just those countries. The EU also has complained that the US has been ignoring various agreements.

Even the 27-member European Union weighed in on the Section 211 case, thanking the US for its report and adding the hope that “US authorities will very soon take steps towards implementing the DSB ruling and resolve this matter.” The EU also urged that the US comply with another IP case – Section 110(5) of the US Copyright Act – which involved the US commercial practice of playing music recordings, such as Irish music, aloud in bars without paying royalties. “We refer to our previous statements that we would like to resolve this case as soon as possible,” the EU said.

Of course, the proper response to all of this isn't just putting more pressure on the US to change its laws to comply, but a more basic solution: stop agreeing to "intellectual property" issues in trade agreements. The US has now made it abundantly clear that it will pressure countries into rules that go against its own best interests and then will ignore any rules that go against its own interests. So the most basic response is that the US is clearly not trustworthy on "intellectual property" in trade agreements, and other countries should refuse to include such provisions in any agreement with the US. Don't reward hypocrisy and bullying by allowing the US to do more of the same.

Filed Under: cuba, eu, hypocrisy, intellectual property, trade agreements, us, venezuela, wipo, wto

The Power Of International Trade Agreements To Prevent You From Owning What You've Bought, And Why This Must Be Fixed

from the just-as-we-suspected dept

Back when the US was negotiating ACTA, we were among those who raised the alarm about just how troubling this trade agreement was -- negotiated in back rooms by the USTR, with details that were kept in secret until they were locked in. In response, many of our critics said that we were overreacting, since ACTA was merely an "executive agreement" which (1) could not bind Congress to anything and (2) would not require any changes to US law, so it was "no big deal." In fact, we were directly told that Congress would not feel bound by such things, so we should shut up with our "same tired arguments," which were nothing but a "chicken little mentality" based on "what ifs."

Of course, part of our very specific concern about ACTA was that even if it required no direct changes in law, it very clearly locked in existing problematic laws, making it much more difficult to fix those problems. And while it did not technically "bind" Congress, the second that anyone in Congress proposed a law that went against the international agreement, we'd hear screaming from the usual crew of copyright lobbyists about how Congress was doing the most horrible of horribles in "violating our international agreements." Of course, they'd leave out the fact that they wrote or heavily influenced those agreements as a way to directly route around Congress.

For all the claims of Chicken Littles and what ifs, in the last few weeks, the "hypothetical" situations we discussed have become very, very real, and have highlighted why it's so problematic that the USTR is including copyright and patent issues in international trade agreements. First, as we noted a few weeks ago, on the issue of phone unlocking, some existing US trade agreements have made it difficult to actually fix the issue. In particular, we named KORUS, the free trade agreement we signed with South Korea half a decade ago, which included a number of copyright provisions, pushed by the entertainment industry (who had flipped out because South Korea was one of the first countries blanketed in broadband). The end result of that, however, is that it would go against that agreement to actually fix the problem (as the White House claims it wants) of phone unlocking being illegal.

Now, as Shirwin Siy correctly points out, Congress is not technically bound by such agreements and can overrule them:

First of all, trade agreements don't dictate what laws Congress can and can't pass. If they're executive agreements, they can't override any laws passed by Congress in the past, and even if they're executed as treaties, they can be superseded by later acts of Congress. Just like Congress can pass a law that overrides an earlier law, it can pass a law that overrides an earlier treaty.

That's technically true, but the reality is not so easy. Soon after my post went up, I started hearing from people all over DC about this issue. In the past few weeks, in talking to numerous capitol hill staffers, as well as with a variety of others involved in the discussions, one thing has become clear: while some in Congress really wanted to do a comprehensive fix on unlocking, the realization that international agreements get in the way may have scuttled those plans entirely. They recognize that Siy is correct, and that Congress is not technically bound, but what becomes clear is that the political reality is, in fact, very different. Proposing a bill that goes against an international agreement is seen as a no-no and the political fight it would take to get that bill to actually do anything just probably isn't worth it.

So, there we have a very real and very tangible example of an agreement that technically didn't "change" our laws, now locking us in to a bad situation.

And... it could be even worse. For all the talk of how Congress isn't actually bound by the USTR's negotiations, it appears that someone forgot to tell that to certain members of the Supreme Court. When the Kirtsaeng case came out last week, the dissent, written by Justice Ginsburg, repeatedly cited international agreements for her interpretation of the law, even though those agreements aren't supposed to define or bind the law. John Bergmayer points out how wrong this is:

It is thus relevant that Justice Ginsburg writes, in dissenting from the majority opinion, that "[u]nlike the Court's holding, my position is consistent with the stance the United States has taken in international trade negotiations." But trade negotiators do not get to decide what the law is: Congress passes statutes and courts interpret them. The USTR is not part of this workflow. If trade negotiators have ever taken positions that are inconsistent with Kirtsaeng then those positions are now, and always have been contrary to US law. I would make a similar argument even if Kirtsaeng came out the other way: trade negotiators should not try to anticipate how contentious legal battles will turn out. They should steer clear of these areas entirely and allow the system to do its work.

So even though the law is clear that the USTR's secretive negotiations (often driven by the copyright industry) cannot actually make the law, even at least three Supreme Court justices seem confused on this point.

And it could get even worse. That's because with the still secretive TPP agreement, that is supposedly nearing completion, a look at what little leaked text there is on the issue of copyright shows that the TPP disagrees with the Kirtsaeng ruling and would require the US to kill off first sale rights on foreign made products to "meet our international obligations." The leaked text includes the following:

“Article 4(2). Each Party shall provide to authors, performers, and producers of phonograms the right to authorize or prohibit the importation into that Party’s territory of copies of the work, performance, or phonogram made without authorization, or made outside that Party’s territory with the authorization of the author, performer, or producer of the phonogram.”

And while the TPP is not yet in effect, Sean Flynn (at the link above) notes that some other free trade agreements negotiated by the USTR already have similar provisions. That's why Ginsburg was so concerned about our supposed "international obligations" in her dissent on Kirtsaeng. Since copyright lobbyists are already pushing to overturn the Supreme Court's ruling with new laws, you can bet that we'll soon be hearing claims that we need to do this to "meet our international obligations."

The point of all of this? The USTR shouldn't be involved, at all, in negotiating IP issues in any such international agreements. Not only is it antithetical to their stated purpose and despite the law being to the contrary, many in both Congress and the Supreme Court, really do feel that we are "bound" by those agreements, even if they were never approved by Congress and cover topics, such as copyright, which only Congress has the mandate to create and change. The "hypotheticals" we discussed around ACTA are no longer "what ifs," but are very real and should be a major concern.

With an attempt at real copyright reform on the table, the fact that the USTR may be seen (whether legally or not) as tying the hands of Congress should be reason enough to simply take those sections out of any and all trade agreements. They don't belong there and they're clearly causing significant problems for the public's best interests within the US. The USTR process is not transparent. It does not involve the public and is not responsive to the needs of voters. That Congress is then effectively unable to do such basic things as allowing the public to unlock their mobile phones (even at the White House's request) or to guarantee that we actually own what we've bought, show just how problematic the situation has become. A few people in Congress are now waking up to this fact, but too many are still oblivious. It's amazing that Congress has allowed the USTR to cut off its own power in this manner.

To fix this, the USTR needs to reject any language around intellectual property in any ongoing international agreements, and must look to pull that language out of earlier agreements. It just doesn't make any sense. Congress needs to assert itself, and let the USTR and the executive branch know that only it has say over copyright and patent laws, as per the Constitution. And, finally, if the White House truly believed what it said about mobile phone unlocking, it should order the USTR to reverse course -- and, as part of that, to start being much more transparent and responsive to the public as it negotiates any such agreements.

Filed Under: acta, copyright, intellectual property, ownership, patents, tafta, tpp, trade agreements, ustr

Senator Fido Wants To Create Official Ambassador For Hollywood's Interests

from the what-is-he-smoking dept

Senator Orrin Hatch has taken a back seat on various "intellectual property" issues in the past few years, as some other Senators have stepped up. But, for years, he was Hollywood's "go to" Senator for bad legislation. One of the running gags throughout Rob Reid's awesome novel Year Zero is how Senator Orrin Hatch is called "Senator Fido" because he's "the entertainment industry's pet Senator." Among his list of bad ideas was a plan to destroy the computers of people accused of downloading, a bill called the PIRATE Act, which would have given the FBI authority over civil copyright infringement claims so they could go after your kids for downloading, and the infamous INDUCE Act, which would have made a ton of stuff illegal, including potentially iPods, FTP, 3D printers and much much more. When asked to defend such craziness, Hatch claimed that it might not work but it still needed to be done. Thankfully, it did not pass.

And while others in the Senate have been proposing bad IP bills over the past few years, Hatch is now back with a proposal to create a special US Ambassador position solely focused on expanding intellectual property around the globe. The so-called Innovation Through Trade Act (S.660) would create a "Chief Innovation and Intellectual Property Negotiator" who would have the official rank of Ambassador.

Incredibly, Hatch claims that IP issues aren't getting enough attention when it comes to trade policy.

“Intellectual property and innovation are the cornerstones of American competitiveness and job creation. Yet in recent years, they are all too often relegated to second tier status in our trade policy,” said Hatch. “With our economic competitors getting more sophisticated by the day, finding more ways to steal, expropriate or otherwise undermine the value of U.S. innovation, negotiating strong intellectual property agreements and enforcing them is a necessity, not an option. The establishment of a Chief Innovation and Intellectual Property Negotiator will give intellectual property and innovation the stature they deserve. The Office will help guarantee that America remains at the forefront of innovation policy, that our trade agreements reflect the critical importance of intellectual property to our economy and that the preservation of high-standard IP protection and enforcement are at the forefront of every trade debate.”

Of course, all this really shows is how incredibly out of touch or corrupt Senator Hatch is. First, as we've seen from ACTA to TPP to TAFTA and a variety of other trade agreements in between, "IP" issues have been front and center for the USTR negotiating team. To claim that they have been relegated to "second tier status" is laughable -- especially if you're familiar with the history of such agreements. For years, IP wasn't even considered a major issue for trade negotiations, until a few decades ago when the entertainment industry realized this was a good way to force Congress (and legislatures around the world) to adopt laws they wanted. And then it quickly became a key piece of every trade agreement.

It further shows just how incredibly out of touch Hatch is, because just as he's proposing this bill, tons of public interest and civil service groups and organizations have explicitly called for the end to the practice of lumping patents, trademarks and copyrights into free trade agreements, since they really have no place there.

Finally, the idea that stronger IP laws will "guarantee that America remains at the forefront of innovation policy," isn't just wrong, it's downright dangerous. Other countries have properly recognized that there is no link between IP and actual innovation, and that IP laws are really just a tool for protectionism against American companies.

Hatch fashions himself a "professional musician," and so every so often he feels the need to throw off a favor or two to the RIAA -- but this is ridiculous. Patents, trademarks and copyrights shouldn't be international trade issues at all, and they already have way too much prominence in such discussions. Claiming they need to be elevated is the exact incorrect stance to take.

Filed Under: ambassador, copyright, fido, ip, orrin hatch, patents, trade agreements, trademark, ustr

Patents, Trademarks And Copyrights Have No Place In Trade Agreements

from the it's-not-a-matter-of-trade dept

As we've discussed before, one of the sneakier moves of the content industry (and, later, the pharmaceutical industry) was to jump into the international trade process, to circumvent national governments and to effectively force them into passing laws that they liked. We've been raising concerns about this whole process, and it appears that many public interest/civil service groups agree. With the US and Europe getting ready to start negotiations on a "trans-atlantic free trade agreement" (TAFTA), a large group of public interest/civil service groups have teamed up to issue a declaration that "intellectual property" has no place in free trade agreements. It also demands much more transparency in any negotiation.

First, we insist that the European Union and United States release, in timely and ongoing fashion, any and all negotiating or pre-negotiation texts. We believe that secretive “trade” negotiations are absolutely unacceptable forums for devising binding rules that change national non-trade laws.

Second, we insist that the proposed TAFTA exclude any provisions related to patents, copyright, trademarks, data protection, geographical indications, or other forms of so-called “intellectual property”. Such provisions could impede our rights to health, culture, and free expression and otherwise affect our daily lives.

Past trade agreements negotiated by the US and EU have significantly increased the privileges of multinational corporations at the expense of society in general. Provisions in these agreements can, among many other concerns, limit free speech, constrain access to educational materials such as textbooks and academic journals, and, in the case of medicines, raise healthcare costs and contribute to preventable suffering and death.

Unless “intellectual property” is excluded from these talks, we fear that the outcome will be an agreement that inflicts the worst of both regimes’ rules on the other party. From a democratic perspective, we believe that important rules governing technology, health, and culture should be debated in the US Congress, the European Parliament, national parliaments, and other transparent forums where all stakeholders can be heard—not in closed negotiations that give privileged access to corporate insiders.

The TAFTA negotiations must not lead to a rewriting of patent and copyright rules in a way that tilts the balance even further away from the interests of citizens.

Frankly, they could go much further in their statement. As we've pointed out for years, things like patents and copyrights are the exact opposite of "free trade." They are, by definition, restrictions on free trade -- and a form of protectionism. If the goal of a free trade agreement is to remove those kinds of restrictions and ease the flow of trade between nations, it seems incredibly strange to bundle it with blatant mercantilist concepts of protectionism and monopolies.

Filed Under: acta, civil service, copyright, patents, public interest, tafta, tpp, trade agreements, trademark

Mexico Will Ask To Join US-EU Transatlantic Trade Agreement

from the really-getting-serious dept

Things are moving fast with the proposed US-EU transatlantic free trade agreement (TAFTA). It was only a few weeks ago that the formal announcement was made, and already another country wants to join, as pointed out by @PostActa (original in Spanish):

The Mexican government wants to be part of the negotiations of the Transatlantic Association of Trade and Investment (TTIP, in its English acronym), which the United States and European Union will be negotiating, with the idea that there will be two blocks that make up the future pact.

That is, alongside the EU block of 27 countries, Mexico is suggesting there should be a similar regional grouping in North America. Interestingly, the story says that the Mexican government will ask the US President for permission to join, with no mention of asking the EU:

"It is a sovereign decision of Washington as to the approach and the negotiation strategy to be adopted", and although the U.S. government has already referred to the idea, it is something that is not yet included in a formal dialogue, and needs to be defined.

That suggests that the US is actively involved in this latest move -- maybe even its instigator -- and would look favorably on Mexico joining TAFTA. There's also a hint in the article quoted above that Canada too might join TAFTA. Having both Mexico and Canada on board would be consistent with the US's past approach, where it allowed them to join the TPP negotiations, but on fairly humiliating terms that limit their scope of action.

Whether or not Mexico and Canada become part of TAFTA, and under what terms, it's pretty clear what the US strategy here is. Just today we learned that South Korea is likely to join Japan in asking to sign up to the TPP talks. That would make TPP the defining international agreement for the entire Pacific region. TAFTA obviously aims to do the same for the Atlantic. As well as establishing the US as the key link between the giant TPP and TAFTA blocs, this double-headed approach would also isolate the main emerging economies -- Brazil, Russia, India and above all China -- if they refuse to join as presumably junior partners. That globe-spanning pair of trade pacts, it would seem, are what Obama hopes to be remembered for when he leaves office: his legacy to America -- and to history.

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Filed Under: eu, europe, intellectual property, mexico, tafta, trade agreements, us

Public Well-Being Must Be 'Primary Measurement' Of US-EU Trade Agreement

from the does-it-have-to-be-said? dept

Now that the US and EU have officially announced the start of talks on a new bilateral free trade agreement -- sorry, a "trade and investment partnership" -- groups in both regions are trying to work out what this will mean for them and their constituents. Arguably the most important constituency of all is the public, and yet it is also the one that until now has been systematically shut out of previous negotiations for things like ACTA or TPP. One representative of that huge group -- though not, obviously, the only one -- is the Transatlantic Consumer Dialogue (TACD), which describes itself as follows:

a forum of US and EU consumer organisations which develops and agrees on joint consumer policy recommendations to the US government and European Union to promote the consumer interest in EU and US policy making.

With commendable speed, it has submitted an open letter on the proposed agreement, addressed to Ron Kirk and Karel de Gucht, who are leading their respective delegations (pdf). Early on, it states the TACD's basic position:

We believe that advancement of consumer well-being must be the primary measurement of whether such a trade pact should be adopted or not. We are very sceptical that a trade partnership built around regulatory convergence will serve consumer interests, and we will vigorously oppose a deal that dismantles existing EU and US consumer protection.

The concern here is that the trade pact will have the effect of levelling consumer protection downwards, to the lower of the two standards found in the US and EU. That might be convenient for industries looking to cut costs and boost profits, but as TACD points out, consumer interests are unlikely to be served. It then goes on to address several particular areas of concern, including copyright and patents:

Provisions on intellectual property (IP) rights should ensure governments may enact robust limitations and exceptions to rights, and limitations on remedies. IP enforcement should be proportionate and respect the right to a judicial remedy. In some areas, mandatory minimum exceptions should be addressed, such as robust cross-border exceptions for disabilities or distance education. Access to medical technologies and knowledge should not be undermined.

It also has strong views on the increasingly-problematic area of investor-state disputes:

Investors should not be empowered to sue governments to enforce the agreement in secretive private tribunals, and to skirt the well-functioning domestic court systems and robust property rights protections in the United States and European Union. Experience elsewhere shows how powerful interests from tobacco companies to corporate polluters have used investor-state dispute resolution provisions to challenge and undermine consumer and environmental protections. Investors must not be empowered to sue governments directly for compensation before foreign investor tribunals over regulatory policy (including "indirect" expropriation), contract disputes, nor guarantee a Minimum Standard of Treatment for foreign investors.

It concludes by raising the key issue mentioned at the start of this post: the fact that the public has been comprehensively excluded from previous trade negotiations, even though the latter are supposedly conducted in its name.

With talks now slated for a fully-fledged Transatlantic trade agreement, it is vital that governmental negotiators reform their engagement with consumer organisations and civil society. We must have a fully open process. Citizens in Europe and the United States will not accept a closed, secret process, with the results revealed only when negotiations are concluded for an up or down vote.

Nothing is more important to an open process than publication of negotiating texts as they are developed.

That last point is important. Once texts have been discussed during the negotiations, there is no reason not to publish them: after all, there are no "secrets" that might be revealed to the other side -- the usual excuse for not allowing the public to see texts as negotiations are being conducted. Industry insiders already have access, so the only people that would be kept in the dark by not publishing them are the 800 million citizens of the US and EU.

Just as the advancement of consumer well-being should be the "primary measurement" of whether the trade agreement should be signed or not, so the public must be recognized as the primary stakeholder that has a right to see all texts once they have been discussed. If they don't, then those negotiations simply forfeit any claim to real legitimacy in a world where basic transparency can be achieved instantly, and for almost zero cost, by publishing materials on the Web.

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Filed Under: acta, public benefit, tpp, trade agreements
Companies: tacd

Over 400 Groups, Representing 15 Million People, Demand 'New Direction' From USTR In TPP Negotiations

from the time-for-a-change dept

We were just talking about the insanity of the latest round of TPP negotiations happening under the continued cloak of secrecy. It appears that more and more people are beginning to question why this is allowed. A letter has been sent to Congress by over 400 groups representing over 15 million people demanding a "new direction" in the TPP negotiations. In particular, they say that the secrecy needs to go away and that the public needs to be able to comment on what is being negotiated in our name.

We find it troubling that, even as the Trans-Pacific Partnership (TPP) Free Trade Agreement enters its 16th major round of negotiations this March in Singapore, U.S. negotiators still refuse to inform the American public what they have been proposing in our names. Shielding not only proposals, but agreed-upon texts from public view until after negotiations have concluded and the pact is finalized is not consistent with democratic principles. In this regard, the TPP appears to be even less transparent than some past trade negotiations. For example, in 2001, the United States joined with 33 other countries in releasing draft text of the Free Trade Area of the Americans, and draft texts within the World Trade Organization are frequently made available.

In terms of specifics, the letter asks Congress to reject the "Fast Track" authority that the USTR has been requesting. Congress, technically, is supposed to be in charge of regulating commerce with foreign nations. The USTR is seeking fast track authority because, without it, these negotiations and the resulting agreement have no basis in law.

Instead, the letter argues that Congress needs to rein in the USTR, to require them to be more open and public, to actually consult with the public, and to make sure that Congress will review the final agreement to ensure it is in the public's interest, rather than in the interest of a few select "industry advisory committees" whom the USTR relies on. Frankly, the letter could have been a lot stronger, but I'm guessing it needed to be slightly watered down to get all those groups to sign. Still, this letter isn't just from "the usual" public interest groups who have been complaining about TPP all along, and suggests that if the USTR continues on this secretive path, there is likely to be strong opposition from the public. We've suggested in the past that the USTR's failure to recognize why ACTA failed in Europe may come back to haunt them with the TPP, and this letter is yet another warning sign. Unfortunately, given the USTR's past behavior, it's likely to be a warning sign that is, once again, ignored.

Filed Under: congress, negotiations, tpp, trade agreements, transparency, ustr

Canada Denies Patent For Drug, So US Pharma Company Demands $100 Million As Compensation For 'Expropriation'

from the money-for-nothing dept

An increasingly problematic aspect of free trade agreements (FTAs) is the inclusion of investor-state provisions that essentially allow companies -- typically huge multinationals -- to challenge the policies of signatory governments directly. The initial impulse behind these was to offer some protection against the arbitrary expropriation of foreign investments by less-than-democratic governments. But now corporations have realised that they can use the investor-state dispute mechanism to challenge all kinds of legitimate but inconvenient decisions in any signatory nation. Here's a good example of how this provision is being invoked to contest a refusal by Canadian courts to grant a patent on a drug, as explained on the Public Citizen site:

Eli Lilly and Company has initiated formal proceedings under the North American Free Trade Agreement (NAFTA) to attack Canada's standards for granting drug patents, claiming that the denial of a medicine patent is an expropriation of its property rights granted by the agreement. The investor privileges provisions included in NAFTA and other U.S. "free trade" agreements (FTAs) empower private firms to directly challenge government policies before foreign tribunals comprised of three private-sector attorneys, claiming that the policies undermine their "expected future profits." Eli Lilly's move marks the first attempt by a patent-holding pharmaceutical corporation to use U.S. "trade" agreement investor privileges as a tool to push for greater monopoly patent protections, which increase the cost of medicines for consumers and governments.

The claim that denying a patent is somehow an "expropriation" of property is pretty extraordinary. Patents are intellectual monopolies that are granted by governments; Eli Lilly does not have such a monopoly in Canada unless the government there grants it, which it does by applying its well-established laws and rules. Here's the background to the current dispute:

Eli Lilly launched its NAFTA attack after Canadian courts invalidated Eli Lilly's monopoly patent rights for an attention deficit hyperactivity disorder (ADHD) drug, having determined that the drug had failed to deliver the benefits the firm promised when obtaining the patent. However, in its formal notice of intent to take Canada to a NAFTA investor tribunal, Eli Lilly makes clear that it is not only challenging the invalidation of its particular patent, but Canada's entire legal doctrine for determining a medicine's "utility" and, thus, a patent's validity. While pushing for a patent standard that would raise medicine prices, Eli Lilly, the fifth-largest U.S. pharmaceutical corporation, is demanding $100 million from Canadian taxpayers as compensation for Canada's enforcement of its existing medicine patent standards.

Basically Eli Lilly failed to deliver its side of the bargain, since the drug doesn't work very well, so Canada refused to allow the company to retain a patent that was contingent on it being effective. What's worrying is that the drug company's present action is not just challenging that decision, but the whole approach that requires drugs to work well enough to deserve a patent -- not unreasonably.

The case will not be heard before any ordinary national or even international court, with all that this implies in terms of transparency and fairness, but by a very special kind of tribunal:

The tribunals are comprised of three private sector attorneys, unaccountable to any electorate, who rotate between serving as "judges" and bringing cases for corporations against governments. The tribunals operate behind closed doors, and there are no conflict of interest rules. The tribunalists are paid by the hour and governments are often ordered to pay for a share of tribunal costs even when cases are dismissed. There is no limit to the amount of money tribunals can order governments to pay corporations. There are very limited appeal rights.

The entire approach is clearly biased towards companies and against the national governments, so the following facts will come as no surprise:

Under U.S. FTAs and related deals, private investors have already pocketed over $3 billion in taxpayer money via investor-state cases, while more than $15 billion remains in pending claims.

However, bad as things are currently, they promise to get even worse if the TPP agreement is finalized in line with leaked versions:

Ironically, while Canada faces an investor-state challenge from Eli Lilly, the country has joined negotiations to establish the TPP, which would expand the investor-state system further. To date, Canada has paid more than $140 million to foreign investors after NAFTA investor-state attacks on energy, timber and toxics policies. Part of Eli Lilly's claim against Canada is that the invalidation of its patent constituted an expropriation of its "investment." NAFTA does not list patents in its definition of a protected "investment," although some analysts have long worried that the broad, vague NAFTA definition could be used to attack medicine patent policies. But in the TPP, the proposed Investment Chapter explicitly names "intellectual property rights" as a protected "investment."

That is, TPP aims to formalize precisely the argument that Eli Lilly is trying to make using some rather far-fetched legal logic, discussed at length in the Public Citizen post quoted above. Moreover, it seems highly likely that a similarly far-reaching investor-state section will be included in the new Transatlantic FTA (TAFTA), now being discussed more widely.

The central problem with these investor-state provisions is that they elevate companies to the level of entire countries. Secret, unaccountable and biased tribunals with unlimited powers then enable them to overturn democratic decisions and legislation passed to preserve things like public health or the environment, simply because they would reduce corporate profits. And yet few people are even aware that such investor-state provisions exist, despite their massive impact on the lives of millions. That's a hugely troubling combination for the future.

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Filed Under: canada, expropriation, investor-state provisions, nafta, patents, tafta, trade agreements, us
Companies: eli lilly