Report recommends worker-centred competitiveness approach to trade policy

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“The authors disagreed with progressives who argue that almost any trade provision or policy, including foreign intellectual property protection, that helps big American business is inherently against the interests of working people. Americans. The authors asserted the opposite: “the majority of the provisions actually create an alignment of the interests of American companies and workers”.

The Information Technology and Innovation Foundation (ITIF) released a report this week titled “A worker-centered trade agenda must focus on competitiveness, including robust intellectual property protections.” ITIF is a non-profit, non-partisan research and education institute that focuses on technological innovation and public policy.

The report explains that US trade policy has long been controversial. Traditionally, trade policy prioritized the interests of US consumers. However, in response to declining US jobs and manufacturing output due to unbalanced trade, President Biden launched a “worker-centered trade agenda,” turning away from this traditional approach.

In its shift to a “worker-centric trade agenda,” the report recommended President Biden reject the advice of anti-corporate, anti-trade progressives who deny that corporate American interests align with the interests of American workers. . A new approach to trade policy focused on competitiveness can support both.

Specifically, this new competitiveness-focused trade approach would prioritize “opening markets and enforcing trade rules to advance the interests of merchant sector businesses in the United States, especially those in key industries. and strategic who pay above-average salaries. The approach would also encourage the inclusion of strong intellectual property (IP) provisions in trade agreements.

Current US trade policy and a call for change

The authors highlighted current US trade policy and addressed its flaws. For example, he noted that US trade policy prioritizes US consumers by minimizing the impact of unfair Chinese practices, including rampant dumping and currency manipulation, to achieve low prices for consumers.

Furthermore, the report describes traditional trade policy as “independent of industry” and erroneously emphasizes opening markets rather than enforcing trade rules. The report pointed out that mainstream trade policy “largely ignores, even denigrates, a national competitiveness agenda” and does not treat one industry any differently than another.

Others also raised concerns about prevailing trade policy, according to the report. Notably, a 2020 report from the Carnegie Endowment for International Peace explained how trade “”policies have left too many American communities vulnerable to economic dislocation and overstepped the bounds trying to effect broad societal change in others. country “”.

United States Trade Representative (USTR) Katherine Tai called for a “worker-centric” trade policy that would “protect and empower workers, drive wage growth, and lead to better economic outcomes for all workers.” Americans”.

Thus, the report explained that it was necessary to move to a trade policy centered on Americans in their role as workers, and not only as consumers.

A competitive approach

According to the report, a competitiveness-focused approach would better address unfair trade practices that harm Americans in their role as workers. It would mean rethinking longstanding business strategies that sacrifice the US market (and businesses in the US) for foreign policy goals.

Under this approach, the agreements would ensure certain labor and environmental protections and strengthen digital protections, including ensuring cross-border flows of legal data.

Moreover, the US administration would show a greater willingness to unilaterally impose tariffs against other nations whose actions violate the spirit, if not the rules, of the World Trade Organization (WTO) in a way that harms American workers. The US administration would also strengthen anti-dumping rules and insist on reciprocity in areas such as foreign direct investment and government procurement.

Finally, the competitiveness approach would encourage the establishment of well-funded national competitiveness policies to help the United States stimulate exports of high value-added domestic production. It would focus more on business competitiveness, which could generate “high value-added economic activity and good jobs in the United States.”

Source: ITIF Report

Intellectual Property Protection in Trade Agreements

How trade agreements should deal with intellectual property protection is a controversial topic. According to the report, most business populists argue that protecting intellectual property only helps American businesses, especially big corporations, and encourages outsourcing. The authors claimed that the commercial populists’ argument lacked merit and that “[a]Any trade policy focused on the well-being of American workers should focus on strong intellectual property protection because it benefits Americans in their role as both consumers and workers.

The report states that “populist anti-trade and anti-IP forces” advance three main arguments for limiting trade policy IP: (1) IP has no place in trade agreements; (2) intellectual property only benefits “big business” and the “elite”; (3) Intellectual property harms citizens of developing countries.

Anti-IP populists argue that IP is irrelevant to trade and therefore incorporating IP into trade agreements could force fundamental changes to “countries’ “legal, judicial and regulatory frameworks”, explains the report. However, the report’s authors said that many trade agreements specifically aim to harmonize the laws of different nations and that the exclusion of intellectual property from trade agreements ignores the true economic role of intellectual property.

Critics such as Joe Stiglitz, Dean Baker and Arjun Jayadev have argued that “[t]The intellectual property standards favored by advanced countries are generally not designed to maximize innovation and scientific progress, but to maximize corporate profits. [corporations].” The report responded that intellectual property protections are also vital for many small and medium-sized enterprises (SMEs) and help the US economy and American workers.

Anti-IP populists also argue that IP in trade policy harms the masses in developing countries. The authors responded that US trade policy is meant to maximize US national interests, not those of developing countries.

A win for business can be a win for workers

The authors disagreed with progressives who argue that almost any trade provision or policy, including the protection of foreign intellectual property, that helps big American business is inherently against the interests of American workers. . The authors asserted the opposite: “the majority of the provisions actually create an alignment of the interests of American companies and workers”. Indeed, many trade provisions result in increased sales to the United States, which in turn benefits American jobs. For example, strong intellectual property rights in trade agreements support workers in the many U.S. sectors that depend on intellectual property to raise their global incomes. Revenues from the “creation, delivery and commercialization” of various intellectual property goods and services accrue to millions of innovators and support personnel.

The report noted that intellectual property has an economic impact on trade and, in turn, US exports and operations abroad have a major impact on the US workforce and operations. The report included studies that showed that the overseas expansion of U.S. multinational affiliates supports the jobs of American parents, rather than destroying them.

The report also argued that intellectual property protections in trade agreements are important because “they facilitate the prevention of foreign theft of all forms of American intellectual property” and when infringement occurs, it takes sales and jobs in American society.

Furthermore, the report argues that intellectual property in trade policy is not just “an elitist concern reserved for big business”. In fact, start-ups depend on IP protection to sustain their businesses and IP portfolios allow start-ups and SMEs to “earn vital capital by showing potential investors a possible return on their investments.” “.

Recommendations for the Biden administration

The report concluded with a series of recommendations for the Biden administration:

  • Quickly re-engage with the rest of the world on a strong trade agenda based on a competitiveness-based approach.
  • Continue to be the world’s leading supporter of strong intellectual property provisions in trade agreements.
  • Work with like-minded partners to establish new tools to combat intellectual property theft, especially from China.
  • Adopt new measures to better protect intellectual property at home so that American companies can protect themselves against state-sponsored intellectual property theft, especially by Chinese-backed companies.

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