Diana Furchtgott-Roth
Many
assert that President-elect Donald Trump is against free trade. But
standing against the theft of intellectual property and old-fashioned
mercantilism, as Trump has promised to do, is an appropriate role for
the chief executive. Allowing other countries to cheat us is not free
trade.
America
consistently outperforms the rest of the world in the sphere of
intellectual property. People throughout the world identify with
American art, music, software, and clothing designs, and benefit from
American pharmaceuticals and patents.
Yet American intellectual property is routinely stolen. Each year, the United States Trade Representative publishes a report entitled “Special 301 Report” on intellectual property theft—yet does nothing about it.
This year Algeria,
Argentina, Chile, China, India, Indonesia, Kuwait, Russia, Thailand,
Ukraine, and Venezuela are the 11 countries on the “Priority Watch
List.” USTR has “the most significant concerns regarding insufficient
[intellectual property rights] protection or enforcement or actions that
otherwise limited market access for persons relying on intellectual
property protection.” Another 23 countries are on a “watch list.”
Most
of the same countries are on the “priority watch list” year after year.
China and several other countries have been on the list for many
years. There is no credible punishment from stealing American
intellectual property, so countries continue to do it. Theft pays.
Intellectual
property is stolen when American corporate employees are thrown in
prison or harassed in a government shake-down, or when American
companies are hauled into foreign courts and accused of stealing their
own patents. Sometimes American Internet companies are kicked out a
country that fosters its own imitative companies to displace the
American ones. In other places, pharmaceuticals are manufactured without
license. And by now everyone knows about foreign hackers invading
American websites.
American
businesses have grown inured to intellectual property theft. They
expect theft in countries around the world and they cannot fight back
because they risk being banned from lucrative markets. The combination
of theft and no enforcement reinforce one another, and our government
needs to respond.
It
is not just American businesses that lose, it is also American
creators. Millions of Americans create and promote intellectual
property. When foreigners copy CDs and sell these pirated copies on the
streets, our creators are worse off.
Although
USTR publishes reports every year identifying American intellectual
property theft, it usually does nothing to prevent such theft or punish
countries that foster intellectual property theft.
America
continues to provide full access to American markets for offending
countries. Pirate countries have little if any incentive to respect our
property. The wonder is not that some countries steal our intellectual
property; the wonder is that all countries do not steal our
intellectual property given the weakness of our response.
Countries
may tell us that it is impossible for them to prevent their citizens
from copying our goods. But when China, for example, can make book publishers in Hong Kong disappear because it disagrees with the content of the books, it can certainly close down the fake Apple stores.
America should take a tough line with countries on the USTR’s Section 301 Priority Watch List. Here are five suggestions.
1.
We could limit their commercial activities in the United States.
Alternatively, we could limit imports of those products with their
intellectual property—or ours.
2.
When an American company is being harassed in a foreign country, we
could haul the ambassador in and ask what is going on. If China holds up
our imports, we could hold up their imports.
3.
If the country is on the special watch list, the Commerce Department
could request the International Trade Administration do audits of
intellectual property protection in those countries.
4. We could limit, and not expand, the commercial activities of countries on that watch list.
5.
If a country appears for a second year on the list, the Commerce
Secretary could be required to prepare a special report to the President
on remedial actions.
Our
government should be proudly standing up for our companies. It is not
free trade when other countries steal our products. And retaliating
against theft does not violate the principles of free trade.
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