As final negotiations begin for the Trans Pacific Partnership (TPP) trade pact, it is essential that U.S. representatives understand the impact this agreement will have on our future. The TPP presents an opportunity to set the standard for future trade agreements, but implementing the wrong policies could do more harm than good.
Any TPP agreement must enable U.S. innovation and not finalizing an agreement is better than signing one that compromises America’s ability to create technologies and make advancements that benefit society. A key factor in protecting innovation through the TPP will be the assurance of strong intellectual property (IP) rights protections that promote investments in R&D and technology development and insure the free flow of information across borders.
As ITIF has noted, IP is a central component of the innovation ecosystem, which is a key factor in a healthy economy, in both developed and developing nations. For example, strengthening IP rights has been connected with increased inflows of foreign direct investment, rates of domestic innovation, and trade in high technology products.
A new ITIF report further examines the TPP and emphasizes the importance of designing an agreement that maximizes innovation and protects IP. It also argues that participating nations must be held to the highest standards, and failing to do so would adversely affect the U.S. economy as well as the advancement of global innovation. To accomplish these goals, the report offers a series of recommendations that must be included in the final agreement.
The policy prescriptions presented include:
- Strengthen overall intellectual property rights protections.
- Eliminate all tariffs on trade in innovation industries.
- Require TPP countries to join the WTO’s Information Technology Agreement.
- Require TPP countries to join the Government Procurement Agreement
- Liberalize trade in innovative services, especially telecommunication services
- Enshrine 12 years of data exclusivity for biopharmaceutical products
- Outlaw local content requirements and other localization barriers to trade
- Lower all barriers to Foreign Direct Investment
The TPP can and should serve as a model for an innovation-centric trade agreement, promoting economic growth for all member countries. But to do so it must protect intellectual property, eliminate non-tariff barriers to trade, and ensure the free flow of information across borders. Anything less is unacceptable.