Failure to Pass TPA Will Marginalize U.S. IP, Internet Services, Say Lawmakers, Witnesses

Failure to pass the Bipartisan Congressional Trade Priorities Act (1.usa.gov/1aaMpOS) would marginalize the U.S. from international free trade agreements, forcing U.S. companies to compete with countries that sponsor substandard rules on intellectual property (IP) rights and digital free flow of information, said Senate Finance Committee Chairman Max Baucus, D-Mont., and several witnesses at a Jan. 16 Finance Committee hearing. The legislation, the 2014 iteration of Trade Promotion Authority (TPA), was introduced by Baucus, Finance Committee ranking member Orrin Hatch, R-Utah, and House Ways and Means Committee Chairman Dave Camp, R-Mich., Jan. 9.

"This isn’t the same old TPA. This strengthened bill tells the administration -- and our trading partners -- what provisions need to be included in trade agreements to win congressional support,” said Baucus. “The bill also recognizes the importance of the Internet. It ensures that trade rules facilitate legitimate digital trade.” The legislation will significantly scale back foreign efforts to obtain U.S. intellectual property and global restrictions on the free flow of data, he said.

The absence of Obama administration pressure to support the legislation is jeopardizing passage, said Hatch at the hearing. U.S. Trade Representative Michael Froman declined to testify, according to Hatch. “If the administration does not get more involved in this effort to pass trade negotiating authority, we're not going to be successful. It’s just that simple,” said Hatch.

The administration, including Froman, has recently expressed support for TPA, also known as fast-track authority, as the U.S. continues to eye the conclusion of Trans-Pacific Partnership (TPP) negotiations.

U.S. trade negotiators must grasp the importance of IP rights and the impact stringent protection has on an emerging, global economy, said Computer & Communications Industry Association President Ed Black in a news release. The last TPA bill, which expired in 2007, failed to address IP protection, he said. “The potential economic benefits of Internet related trade are immense,” said Black. “Yet businesses face numerous additional barriers today: impediments to cross-border data flows, mandates on the location and use of technology infrastructure, forced technology transfer, and unreasonable liability rules regarding third-party activity. These issues were not addressed when Congress last considered the issue of Trade Promotion Authority more than a decade ago, so much work needs to be done to ensure trade agreements reflect a balanced and pragmatic approach."

The Bipartisan Congressional Trade Priorities Act mandates the “accelerated and full” implementation of a World Trade Organization Uruguay Round IP agreement, emphasizing the importance of enforcement. The legislation also says U.S.-acceded free trade agreements should contain IP protection “similar” to U.S. law. The IP priority is essential in an increasingly globalized commercial environment, said witness Elena Stegemann, director-international business, NuStep Inc.

"TPP will get rid of many of the barriers that make it hard for us to compete in some Asian markets. Also, the Trade Priorities Act will guide American negotiators to ensure that TPP protects Intellectual Property and trade secrets,” said Stegemann.

The bill makes significant strides toward addressing other emerging commercial interests, as well, said Sen. John Thune, R-S.D. “Last December Sen. Wyden and I introduced a Digital Trade Act which … modernizes basically our trade laws to reflect the Internet-enabled world which we now live and do business. And so I'm very pleased that this TPA legislation that we're considering today includes a robust section on digital trade with provisions addressing nearly all the issues included in my bill,” said Thune, referring to S-1788.

Communications Workers of America President Larry Cohen said the standards on currency, labor rights, environmental standards and consumer protection that proponents praise are sorely insufficient. Moreover, the legislation is poised to allow the U.S. to conclude a TPP agreement that will fuel U.S. job losses and a widening trade deficit, said Cohen. He said he would support fast-track legislation that ensured International Labour Organisation adherence, among other international standards.

"Even the Korean trade agreement that was supposed to bring new jobs … in fact, we've lost 40,000 new jobs since its passage. We can take micro examples like telecom equipment. There’s no telecom equipment made in this country at all,” said Cohen. “And China with state-owned enterprises ZTE, Huawei and European companies that are promoted by their nations, whether Acitel or Siemens or Ericcson or Nokia, are thriving.”