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All posts by Michelle Wein

Africa

The Need for an AGOA Renewal

The African Growth and Opportunity Act (AGOA) is set to expire in September 2015, and last week at the United States-Africa Business Forum, President Obama pitched the idea of an early renewal, building on the growth of the Administration’s “Doing Business in Africa Campaign.”  AGOA is the cornerstone of U.S. trade and investment with Africa; over its 14 year history, the program has contributed to a doubling of U.S. trade with Africa.  In 2013, U.S. goods imports from sub-Saharan Africa under AGOA and the Generalized System of Preferences (GSP) program totaled $26.8 billion, more than three times the amount in 2001, the first full-year of AGOA trade.

Indeed, by providing duty-free entry into the United States for almost all African products, AGOA has helped expand and diversify African exports to the United States, while at the same time fostering an improved business environment in many African countries through streamlined eligibility requirements. These eligibility requirements remain important in the renewal process though, as part of increasing the desirability of African countries as a business destination lies in making sure that these nations have an environment that fosters growth and investment. Congress

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Let USTR Do Its Job

Last week, the U.S. House of Representatives passed a bill funding the federal trade agencies that also called for more oversight of them, including the addition of language aimed at preventing the Office of the U.S. Trade Representative (USTR) from negotiating trade agreements that might open up the U.S. government procurement market to enterprises from other countries. The amendment language, part of the fiscal year 2015 Commerce, Justice, Science (CJS) Appropriations bill, consists of one sentence, “[n]one of the funds made available by this Act may be used to negotiate an agreement that includes a waiver of the ‘Buy American Act.’”

The 1933 Buy American Act (BAA) requires the U.S. federal government to prefer U.S. products for all goods, but not services. The BAA applies to goods acquisitions over the micro-purchase threshold of $3,000. Under the BAA, all goods for public use (articles, materials, or supplies) must be produced in the United States, and manufactured items must be manufactured in the United States from U.S. materials. The BAA creates a price preference that favors “domestic end products” from American firms in U.S. federal government contracts for:

  • Unmanufactured products mined or
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Reviewing USTR’s 2014 Special 301 Report

Yesterday, the Office of the U.S. Trade Representative (USTR) released its annual Special 301 Report, citing 37 countries for inadequate and ineffective protection of intellectual property. The listing included:

 

Priority Watch List: Algeria; Argentina; Chile; China; India; Indonesia; Pakistan; Russia; Thailand; and Venezuela; and

Watch List: Barbados; Belarus; Bolivia; Brazil; Bulgaria; Canada; Colombia; Costa Rica; Dominican Republic; Ecuador; Egypt; Finland; Greece; Guatemala; Jamaica; Kuwait; Lebanon; Mexico; Paraguay; Peru; Romania; Tajikistan; Trinidad and Tobago; Turkey; Turkmenistan; Uzbekistan; and Vietnam.

 

The 2014 report highlights continuing threats global U.S. intellectual property rights holders’ face in countries throughout the world. And because IP and innovative industries are so vitally important to the U.S. economy — for example, a Department of Commerce study estimates that in 2010, copyright-intensive industries accounted for $641 billion in value-added to GDP and 5.1 billion jobs — it is necessary to make sure the IP enforcement remains a priority for foreign policymakers.

USTR made minimal changes to the country designations from the 2013 Special 301. In fact, the ten countries listed on the Priority Watch List (PWL) remain completely unchanged. The only changes to

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We Are Never Ever Getting Back Together

A few days ago, Marvin Ammori published a piece on Slate titled, “Hollywood’s Copyright Lobbyists Are Like Exes Who Won’t Give Up”, in reference to  the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet holding a hearing regarding the Digital Millennium Copyright Act (DMCA) notice and takedown system. In it, he alleges that the hearing’s existence, created to discuss the potential of voluntary initiatives among copyright stakeholders, is proof of a conspiratorial secret resurgence of the Stop Online Piracy Act (SOPA).

Ignoring the ludicrous nature of this claim — does every hearing that every committee holds in the entirety of the U.S. Congress have some secret ulterior purpose now? — his argument is demonstrably false.  Let’s start with the facts: the DMCA notice and takedown system is the process by which content creators notify service providers that they are illegally distributing content.  In exchange for working collaboratively with rights holders, service providers receive a “safe harbor” from prosecution. The House Judiciary subcommittee hearing tomorrow is an opportunity to discuss voluntary initiatives among stakeholders to curb piracy, not a chance to propose new legislation (and in case anyone

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Kim DotCom Thinks You Are a MegaIdiot

On Sunday evening, CBS’s 60 Minutes aired a report that reviewed the trials and tribulations of Kim DotCom—the self-styled villainous creator of the website MegaUpload. Prior to its infamous shutdown in 2012, MegaUpload was the premiere website for the illegal sharing of copyrighted works such as movies, TV shows, and music.

The 60 Minutes piece focuses primarily on the perspective of DotCom, including his delusion that he has been unfairly targeted by the U.S. Department of Justice (DOJ). He repeatedly states that he should not be held responsible for the actions of his users; the website was designed for file sharing, and what his users chose to share is not his concern. In fact, DotCom expresses a desire for his work to be compared to that of movie heroes such as James Bond, only to have Bob Simon aptly point out that he is in fact much closer in persona to Dr. No — the flamboyant lifestyle, the private island, etc. It is this persona that DotCom alleges is responsible for the FBI targeting him, rather than the fact that he built a website designed to illegally exploit copyrighted works

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Update: Trade Promotion Authority Still in Danger

Last week, Senate Finance Committee Chairman Max Baucus (D-MT) stated that he is close to reaching an agreement on renewing Trade Promotion Authority (TPA) with House Ways and Means Committee Chairman Dave Camp (R-MI). This progress comes at a crucial time given that the Obama Administration is in the middle of negotiations for two different trade agreements — the Transatlantic Trade and Investment Partnership (T-TIP) and the Transpacific Partnership (TPP).

TPA allows the President to “fast-track” trade agreements for approval or disapproval by Congress by removing the option for filibuster. Essentially, the TPA forces the House and Senate to accept or reject a trade agreement, without amendment, within 90 days of its submission to Congress by the President. The process enables the United States to negotiate more beneficial trade policies with other countries, because of the reduction in approval time compared to other legislation and because it incentivizes countries to trade concessions with the United States, because they know that Congress cannot rewrite the deal.

With the final ministerial meetings of the TPP set to begin the first week of December, and the third round of T-TIP negotiations two weeks

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Computer

Trade Liberalization Enhances Economic Growth: New Evidence

A new paper from the FUCAPE Business School in Brazil, authored by Brazilian economist Bruno Funchal and Jadir Soares Junior, find that reductions of barriers to trade in the computer technology sector affected the Brazilian labor market. Specifically, they use the end of the “Informatics Law” in 1992 as the non-tariff barrier to trade of analysis. For eight years the “Informatics Law” imposed a limit on access by foreign companies to the manufacture of small computers and provided various support mechanisms for strictly nationally controlled companies.

Using data from the Annual Social Information Report and the Brazilian Occupational Classification, the authors compare the change in the demand for either “routine” or “non-routine” tasks before and after the repeal of the “Informatics Law” to the percentage of workers using computers in 2002 using a panel regression with fixed effects. The idea is that the liberalization of the technology market in Brazil led to a rise in the demand for workers doing non-routine tasks (considered complementary to computers) and a fall in the demand for workers doing routine tasks (considered a substitute to computers).

The authors find that industries and occupations intensive

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Prescription Drug

Is it Useful? A Drug Patent Enigma

Obtaining a drug patent isn’t easy:  it requires, on average, 14.6 years and $1.2 billion in pre-approval research and development and clinical testing. In addition, it also requires the developer to meet a set of three internationally accepted conditions. According to the World Trade Organization’s (WTO) Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, in order to obtain a patent, a drug must:

  1. Be new,
  2. Involve an inventive step, and
  3. Be capable of industrial application.

TRIPS also clarifies that “involving an inventive step” and “being capable of industrial application” are synonymous with “non-obvious” and “useful”, respectively. For being a WTO legal document, it’s actually surprisingly clear: be new, be non-obvious and be useful.

Typically, the patent is issued prior to a drug’s clinical testing, primarily because if a commercially viable drug is developed from the clinical testing, it is vulnerable to theft and copying. In other words, patents are filed upon discovery of a chemical formula, as part of the United States Patent and Trademark Office’s “first to file” rule. Without the patent, innovative pharmaceutical companies would not have an incentive to research and develop this formula into

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pirate

It’s Our Pirate Party, We Can Do What We Want

The Mercatus Center at George Mason University rolled out a new website this morning— piracydata.org—that attempts to collect data about whether or not the most pirated movies (as ranked by TorrentFreak) are available for lawful viewing online. The site’s authors seem to suggest that 1) the content industry is doing a poor job of making content available; and 2) piracy would go away if the content industry would just release more movies sooner, cheaper or in a different format. Both arguments are wrong.

First, let’s look at the fact. The website had several errors at launch, and it still had some errors as of this afternoon. (For example, Pacific Rim is currently available via YouTube rental.) But using corrected data we can see that six of the ten movies listed are available legally on various digital sites (Google Play, Amazon, iTunes, etc.). In addition (and not mentioned on the website), three of the ten are available for purchase On-Demand via Comcast and four of the ten are available on AT&T U-Verse. The idea that studios are not making movies available to consumers is nonsense. Today there are more ways

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capitalclosed

Shutting Down Trade with the Government Shutdown

With the government shutdown now in its second week, its effect is now being felt across much of the broader U.S. economy, especially in trade. The Department of Commerce (DOC) says nearly 10 million American jobs are supported by exports. Last year, U.S. exports rose 4.4 percent to $2.196 trillion and imports grew 2.7 percent to $2.736 trillion.

Unfortunately, the shutdown is destroying much of this daily commerce. Several government agencies—including DOC, the Environmental Protection Agency (EPA) and the Department of Agriculture (DOA)—are involved in trade shipments. While Customs and Border Protection (CBP) is still staffed throughout the shutdown, most of these agencies have the authority to “release and hold” imports and exports before CBP even enters the process, meaning  that many imports and exports are stranded and unable to enter/exit the United States.

For example, the EPA halted all pesticide imports to the United States, because, with more than 90 percent of its staff furloughed, it cannot approve them.  Steel imports are stranded at customs-clearance warehouses awaiting paperwork.  And many U.S. technology companies are slowing down or stopping overseas orders because they cannot obtain DOC authorization to export. The

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