The CPTPP and Intellectual Property Rights Protection
With a full plate of domestic challenges, President Joe Biden isn’t giving high priority to trade negotiations. At some point, though, his administration almost certainly will consider whether to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP comprises 11 countries formerly associated with the Trans-Pacific Partnership (TPP), from which the United States withdrew shortly after then-president Donald Trump took office.
A strong argument can be made for the United States to bolster its trade and economic connections in the Asia-Pacific region through the CPTPP. If Biden does decide to pursue negotiations to join, his administration will face strong industry pressure to restore some of the provisions dropped or suspended from the TPP.
One area of particular contention is likely to be intellectual property rights (IPR) protection. CPTPP member countries suspended a host of U.S.-backed IPR provisions, which were in the original TPP agreement but had been widely resisted by negotiating partners, including normally like-minded countries such as Australia and New Zealand.
The suspended provisions relate almost exclusively to pharmaceuticals and certain copyright holders.
Most of those provisions, which also had sparked controversy among some U.S. constituencies, were incorporated largely unchanged in the U.S.-Mexico-Canada Agreement. (Of course, Canada and Mexico faced the prospect of high tariffs and/or U.S. withdrawal from the North American Free Trade Agreement [NAFTA] if they failed to agree to U.S. proposals.)
The CPTPP’s suspended pharmaceutical patent provisions include term of protection for biologics (e.g., certain vaccines and other products from living organisms; the United States pushed for twelve-year protection in the TPP but settled for eight); protection for new uses, methods, or processes of making a product; patentability of inventions derived from plants; lengthened terms of protection in cases of unreasonable delays in granting patent or marketing approval; and protection of undisclosed test or other data—all with civil and criminal penalties spelled out for violations.
Suspended copyright provisions address lengthened terms of protection; responsibilities of internet service providers to prevent online infringement; protection of encrypted satellite and cable signals; evasion of controls on sharing digital copies; and related measures, with civil and criminal penalties spelled out for violations.
The importance of IPR protection in stimulating innovation and creativity was recognized by the United States’ founders, who included it in Article I, Section 8 of the U.S. Constitution. In today’s world, pharmaceutical manufacturers, for example, need a sufficient length of patent protection and exclusive (or monopoly) sales to recoup high costs of research, testing, and development of drugs. Writers, artists, entertainment companies, and other producers of original material benefit from protection that prevents others from reaping financial gains from their creative works for the duration of the copyright.
However, a trade-off exists between the degree and length of protection for producers of intellectual property and the interests of users, innovators, and the broader public. Critics at home and abroad have argued these extensive IPR protections tilt too far toward producer interests and could negatively impact public health and access to affordable medicines, especially in low- to middle-income countries; internet user privacy and the protection of personal data; access to knowledge; and innovation in a range of industries.
President Biden and many members of Congress rightly view the United States and other democratic, market-based countries as being locked in competition with China and other authoritarian, state-led nations over whose values and norms will prevail in an increasingly diverse world.
Trade is one of those areas of competition, and the United States’ ability to dictate the terms of deals, whether in trade or other areas, is not as strong as it once was. Moreover, China is increasingly asserting its interests in the international realm, and third countries don’t want to be forced to choose between the two.
China’s engagement recently helped push the long-negotiated Regional Comprehensive Economic Partnership (RCEP) agreement among 15 Asia-Pacific countries over the finish line. RCEP’s IPR chapter incorporates many of the concepts included in the CPTPP and the trade-related intellectual property rights (TRIPS) agreement of the World Trade Organization (WTO). But it excludes provisions considered most problematic by signatory countries, including those suspended in the CPTPP.
RCEP also takes a more general approach to most IPR protections, in contrast to the highly prescriptive approach taken by the United States. In addition, RCEP explicitly recognizes “the Parties’ different levels of economic development and capacity, and differences in national legal systems” as relevant to the goal of improved IPR protection and enforcement.
Membership in RCEP and the CPTPP is highly overlapping—seven countries are parties to both agreements, including regional heavyweights Japan, Australia, Singapore, and New Zealand. Resistance to U.S.-backed IPR provisions is unlikely to have diminished with time among its former TPP negotiating partners. If anything, RCEP’s alternative approach offers countries a potentially more attractive option.
If and when the United States does reengage with these countries in the trade arena, our negotiators, policymakers, and members of Congress will need to decide whether to let perfect be the enemy of the good.
As deputy secretary general of the Organization for Economic Cooperation and Development, I led negotiations on policy recommendations for member and non-member governments on regulatory reform, corporate governance, trade policy, and other matters.
Although we always aimed for high-standards agreements, we also stressed that “one size does not fit all.” That’s because each country has different legal systems, norms, and traditions that may require a somewhat different approach to accomplishing the overall goals of OECD policy recommendations.
While the U.S. leadership position on invention and innovation must be protected in a solid IPR regime, the IPR chapter is just one of 30 chapters in the CPTPP, and most U.S.-backed provisions from the TPP are incorporated into it.
If, during eventual negotiations, current CPTPP members balk at including some or all of the suspended patent and copyright provisions, a strong argument can be made to accept a compromise in the interest of U.S. membership. This could produce a win-win outcome for all parties.
The United States is engaged in a global competition of ideas, principles, and standards. U.S. participation in the CPTPP, a key pillar in the economic architecture of the dynamic Asia-Pacific region, would bring economic benefits to all participants, including the United States. It also would allow the United States to influence evolving global rules from within, rather than to try to shape those rules from the outside.
Joanna Shelton is a senior associate (non-resident) with the Economics Program at the Center for Strategic and International Studies.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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