NAFTA Renegotiations Must Advance Innovation and Creativity
Nov 09, 2017 | 544 views | 0 0 comments | 17 17 recommendations | email to a friend | print


By Bob Barchiesi, James C. Greenwood, Charles H. Rivkin, Cary Sherman, and Stephen J. Ubl

Diplomats from the United States, Canada, and Mexico recently met in Washington, D.C. to re-negotiate the North American Free Trade Agreement (NAFTA).

Many Americans feel NAFTA has disadvantaged U.S. workers. Others have complained about U.S. companies relocating factories to Mexico to take advantage of lax labor regulations. The Commerce Department has called out Canadian softwood lumber subsidies.

These are legitimate concerns and negotiators certainly need to address them. But they also need to address what's missing in NAFTA: strong protections that foster innovation and ensure competitive conditions for creative and innovation based industries. These protections are crucial to millions of workers and to our economy.

The economic value of creative and innovative based industries is captured in a person or company's ideas and inventions. These assets are often protected through intellectual property rights such as patents, trademarks, and copyrights, which prevent others from stealing or replicating original ideas without permission.

These robust sectors wouldn't exist without laws and policies that respect the substantial value they add to their products and services and enable them to reap the benefits of their work.

That’s because these businesses and inventors all face massive upfront costs.

Film studios must spend hundreds of millions of dollars to create a major motion picture. Biopharmaceutical companies frequently spend billions to research and develop a single medicine with no guarantee that medicine will ever make it to market. Record companies spend more than a quarter of their revenue on discovering and promoting new artists.

If rivals could swoop in and produce cheap, knock-off copies, after all the hard creative work has been done, there'd simply be no way for the creators and innovators to earn back their investments.

Needless to say, that would cripple significant segments of the American economy. All told, IP-intensive sectors added more than $6 trillion to U.S. GDP in 2014. Together, IP-based start-ups, small businesses, and larger companies support more than 45 million jobs  in the United States with workers earning nearly 40 percent more than their counterparts in non-IP intensive sectors.

On top of the many benefits to the United States, the products developed by creative and innovative based industries are shared around the world. The United States exports roughly $130 billion of IP-intensive products each year.

Unfortunately, illegal actions that deprive inventors of the economic rights to their IP, such as counterfeiting, piracy, and other intellectual property theft, threaten the ability of creators and inventors to continue investing and creating jobs. For instance, U.S. companies lose a cumulative $250 billion annually to digital theft.

Innovation and creativity drive the American economy. This is our comparative advantage. To safeguard this, U.S. negotiators ought to insist on trade policies that respect innovation and creativity, and ensure strong protections for IP and creative content in the new NAFTA. If they succeed, the new agreement could become the gold standard for all future trade deals.

Bob Barchiesi is the president of the International AntiCounterfeiting Coalition (IACC), James C. Greenwood is the president and CEO of the Biotechnology Innovation Organization (BIO), Charles H. Rivkin is the CEO of the Motion Picture Association of America (MPAA), Cary Sherman is the chairman and CEO of the Recording Industry Association of America (RIAA), and Stephen J. Ubl is the president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA).
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