House Committee on Foreign Affairs
Oversight Hearing: Unfair trading practices against the US: Intellectual property rights infringement, property expropriation, and other barriers
- Mr. Grant Aldonas (former Under Secretary of Commerce for International Trade), Managing Director, Split Rock International
- Mr. Derek Scissors, Senior Research Fellow, The Heritage Foundation
- Mr. David Hirschmann, President and CEO, Global Intellectual Property Center
Yesterday the House Committee on Foreign Affairs held an oversight hearing that highlighted unfair practices faced by US businesses abroad. Inadequate intellectual property protections were identified by the Committee as a key detriment to domestic job growth and US competitiveness in the global economy. Statistics cited by members of the Committee emphasized the realities of IP theft:
- According to the US Chamber’s recently released IP Creates Jobs for America study, IP-intensive industries directly and indirectly support more than 55 million American jobs – jobs that pay 30% higher wages than those in other industries – and account for $5.8 trillion in national output.
- Nearly three-quarters of IPR theft ends up in world trade flows.
- Illicit networks generally do not spend money on research and development. However, they have proven that they are experienced marketers and distributors… Recent news reports indicate that the sale of pirated movies and music provides a major source of funding for one of Mexico’s most violent criminal syndicates, the Zetas Cartel.
To combat IPR theft, Chairwoman Ileana Ros-Lehtinen (R-FL) argued that the most effective method is through the use of enforceable Free Trade Agreements (FTAs). However, she also recognized that this remedy cannot be used effectively because the expiration of the President’s trade promotion authority has made the negotiation and approval of new FTAs very challenging.
“If we [in Congress] want to do more than talk about creating opportunities for US exporters, especially in a time of economic difficulty, we must restore the President’s authority to re-negotiate enforceable agreements that will enable our entrepreneurs to compete effectively and create the jobs that so many Americans are searching for.”
– Chairwomen Ileana Ros-Lehtinen
Senator Berman (D-CA) agreed with her argument and pointed out that the ongoing Trans-Pacific Partnership (TPP) negotiations provide an immediate opportunity for the United States to promote global intellectual property protection standards. Furthermore, the US-South Korea FTA provides a benchmark for IPR protections that can be used for negotiating the TPP.
Mr. Derek Scissors, a Senior Research Fellow at the Heritage Foundation, suggested an alternative policy to incentivize countries that lack adequate IPR protections, by increasing trade and investment with countries that better protect intellectual property.