The TPP trades on US clout at the expense of innovation

Revealing figures about the recent decline in US-based innovation hint at the nation’s motivations for its impromptu involvement in the Trans-Pacific Partnership treaty.

Professor John Jackson, of the University of Michigan Law School, once suggested that international trade negotiations operated under the bicycle principal. Put simply: ‘If you're not moving forward you are probably falling off’.’ And, to take the example of the World Trade Organisation’s progress over the past decade, little forward motion is really needed.

But a recent article in The Age, ‘How China’s know-how is challenging the US’, suggests previously unrecognised factors may have spurred the US' entry into the negotiations for the Trans-Pacific Partnership Agreement.

The article, by Dr Thomas Barlow, tells the story of the decline in innovation in the west, and, in particular, the USA.

Barlow observes that “for more than half a century, the US has been the dominant force in global innovation”.

“For years, its intensity of investment in knowledge estimated by totting up spending on software, R&D, and higher education as a share of GDP has been twice that of Europe.”

One consequence is that “in the second half of the 20th century, 58 per cent of the world's Nobel Laureates were resident in the US”.

But, as he observes, “there is a zone of nations extending from Japan, China, and South Korea in the north, down to Singapore, Indonesia, Australia, and New Zealand in the south” whose “combined R&D investment in all sectors, public and private, zone exceeded that in North America for the first time” in 2011.

In addition “in 2009, total patent applications made through the patent co-operation treaty process from applicants in these nations also exceeded those from North American applicants for the first time”.  

It’s uncanny that around the same time the US opted to participate in the Trans-Pacific Partnership agreement.

The TPP agreement grew out of a regional deal between Brunei, Chile, Singapore, and New Zealand called the Trans-Pacific Strategic Economic Partnership (P4) Agreement of 2005.

In March 2008, the US joined for a look-in and, in September, announced it wished to participate fully in the negotiations. Australia, Peru, and Vietnam joined soon after and then did Malaysia, Japan, Canada and Mexico, the latter two already linked to the US through NAFTA. Since then, the US government and corporate America has dominated negotiations.

The language of trade agreements comes from trade negotiators own Book of Common Prayer. Agreements promise to strengthen, enlarge, create, avoid, establish, ensure, build, affirm, reaffirm, be mindful of, enhance and foster, all the while never forgetting a commitment to sustainable development. 

But what if the real motive of one or more parties was to isolate, control, enrich, deprive, penalise and stifle? In effect, to put a toll on the drawbridge.

Innovation feeds on innovation. That’s the principle behind copyright and patent laws. Copyright and patent laws reward the inventors for their innovations and then, after a reasonable time, return their innovation to the public domain to feed further innovation. Copyrights and patents laws are not there to gold plate the retirement funds of the innovators’ grandchildren.

And yet, that’s happening, the leaked copies of the Intellectual Property chapter of the TPP suggests. Copyrights and patents created over the past century, so very many in film, music, pharmaceuticals and computer software by US companies will have enhanced protection, if the agreement is signed.

Is it possible that the real interest of the US in the TPP agreement is to shore up revenue streams of the trade in US intellectual property in the face of the fall in innovation in the USA?

Extensions to copyright beyond seventy years (up from 50 years a few years back to protect Mickey Mouse), and ever-greening of pharmaceutical patents for trivial changes in formula, would seem to say ‘yes’.

While the treaty might line the pockets of US companies, is it a good long term strategy for the US in the Asia-Pacific? Selfish interests underpin all trade agreement, but longer term interests of the US, still selfish, could be served by a more liberal attitude to IP.

Orderly, stable societies have limited imbalances in power and wealth between different classes. Poor nations can work their way out of poverty, it is said, with trade but, at present, most of that trade is based on cheap physical labour.  For economic robustness, those nations need a diverse economy, one that has a two-way trade in services and intellectual property, not just cheap clothing.

The present IP chapter of the TPP will suppress innovation and the creation of intellectual property in lesser developed economies, so undermining long term stability. The billions earned by US companies in royalties may be offset by the trillion the US government will spend being the world’s policeman. And what better bulwark against China that a prosperous and democratic Asia-Pacific?

Under the proposed IP regime, being a smart country will be permanently off the agenda for most signatories, Australia included.

Nevertheless the Australian Minister for Trade and Investment Andrew Robb remained upbeat about the TPP at the G'Day USA promotion in Los Angeles last weekend.

Dealing with process not substance, Robb told AAP “it's ready to be sealed”.

“A few big things have to end up back on the table yet, but it is close.”

“I would hope we are going to see progress obviously this year and sooner rather than later.”

But the TPP negotiations have always marched to a US drum. The first deadline was prior to the November 2012 US presidential elections. It has been reported that President Obama had set a deadline of the end of 2013. That has passed. But, it is likely the treaty will be settled before the 2016 presidential campaign gets underway.

Mr Robb also dismissed criticism of the secrecy surrounding the discussions saying ‘It is nonsense to suggest that people are in the dark.’

Clearly, Andrew Robb has never attended a public DFAT briefing on the TPP negotiations.

Dr Vincent O'Donnell is the media policy editor at Screen Hub and an executive producer at Arts Alive.