The Trump Administration's Intellectual Property and Competition Objectives for NAFTA Renegotiation: What Was Wrong with the TPP?

By Josh Rich --

On July 17, 2017, the United States Trade Representative released the summary of its objectives for NAFTA renegotiation, including its objectives for the intellectual property and competition provisions of the agreement.  As part of the overview of its objectives, the USTR indicated that the revised version of NAFTA "must continue to break down barriers to American exports," including by eliminating "burdensome restrictions of intellectual property."  But the provisions that the USTR indicated it would be seeking -- which appear to be intended to create a template for future bilateral or multilateral agreements -- reestablish the basic framework initially negotiated by the Obama Administration as part of the Trans-Pacific Partnership, which President Trump rejected as a "continuing rape of our country."

The USTR set forth a number of intellectual property-related goals to be achieved in renegotiation of NAFTA, many of which do not appear to be directed at changing Canadian or Mexican laws.  Specifically, the Trump Administration seeks to ensure that NAFTA's terms "reflect a standard of protection similar to that found in U.S. law" and provide strong measures for enforcing such rights; fully and quickly implement the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), especially the enforcement obligations under TRIPS; and prevent or eliminate distinctions between protection of domestic and foreign intellectual property rights.  The objectives also relate to the negotiation of issues that were not addressed in NAFTA's original text, including those directed to new technologies involved in digital trade and works distributed through the Internet and other global communications media.  Finally, the goals include some that do not address concerns that have actually arisen between the United States and Canadian and Mexican trading partners, such as preventing government involvement in cybertheft and piracy, preventing the improper use of protection of geographical indications, and establishing basic rules for procedural fairness in competition law enforcement.

Not without considerable irony, the USTR's objectives are most notable for how closely they follow the goals that the Obama Administration achieved in negotiating the TPP.  The TPP included the United States, Canada, Mexico, and nine other countries; because Canada and Mexico already agreed to the intellectual property provisions in the TPP agreement, it should not be all that difficult to get their agreement to very similar provisions as part of NAFTA.  Notably, the TPP agreement set forth the intellectual property requirements for membership with great specificity, in order to ensure standards similar to those required under U.S. law.

With regard to patents, for example, TPP members were required to agree to grant patents to any invention that is "new, involves an inventive step, and is capable of industrial application."  Under that standard, patentable inventions would include new uses for known products, new methods of making known products, and new methods for using known products.  The TPP agreement also discarded any requirement for "absolute novelty," wherein a public disclosure by the applicant itself, less than twelve months before the filing of a patent application, would not constitute invalidating prior art (as it does, in Europe, for example).  After filing, there would have to be patent term adjustment for unreasonable delay in issuance of a patent (specifically, a delay of more than five years after filing or three years after a request for examination), patent term extension for unreasonable delay in marketing approval, and substantial data exclusivity for agricultural chemicals, pharmaceutical products, and biologics.  The data exclusivity would be at least ten years for agricultural chemicals, at least eight years for a biologic drug, at least five years for a new chemical pharmaceutical entity, and at least three years for a new indication for an existing pharmaceutical.  And a TPP member state could not discriminate between rights granted to a domestic applicant and an applicant from another TPP member state.

With regard to competition law, the resemblance of the USTR's objectives and the TPP agreement is even closer.  The USTR's objectives for renegotiation of NAFTA even use some of the language used in the TPP agreement, although set forth with more detail there.

The Trump Administration's decision to pursue many of the same intellectual property protection objectives in renegotiating NAFTA as had been negotiated as part of TPP is all the more remarkable in light of the decision by the other TPP member states to continue to seek a broader free trade market with the same sort of intellectual property requirements.  Last week -- only days before the USTR issued its NAFTA objectives -- representatives of the "TPP-11" (all of the TPP member states other than the United States) met to discuss implementation of the TPP without U.S. involvement.  They indicated that they will continue to meet and negotiate, but hope to finalize a trade agreement by the end of the year that has only minimal differences from the original text of the TPP agreement.  The juxtaposition of the TPP-11's discussions and the USTR's objectives for NAFTA renegotiation is striking, in that it suggest that both the Trump Administration and the TPP-11 are seeking to reconstruct the international intellectual property and competition regime that they negotiated through the TPP.  It leaves one question: what did President Trump really think was so bad about the TPP agreement, besides the historical reality that it had been successfully negotiated by his predecessor?

For additional information regarding this and other related topics, please see:

• "Why President Trump Is Wrong about Trans-Pacific Partnership Agreement," January 26, 2017
• "Public Health Organizations Urge Congress to Reject Trans-Pacific Partnership Agreement," April 18, 2016
• "What Are the IP Provisions of the TPP?" November 9, 2015
• "What May Be the IP Provisions of the Trans Pacific Partnership Agreement," October 15, 2015
• "Transparency and the Trans-Pacific Partnership Treaty," March 11, 2015
• "GPhA Issues Statement Regarding Proposed IP Provisions of Trans-Pacific Partnership Agreement," October 23, 2014
• "Democratic House Leadership Does Not Want TPP to Undermine Public Health," February 12, 2014
• "AARP Seeks Reduced Data Exclusivity Period in TPP," October 31, 2013
• "White Paper Asserts That Existing Trade Agreements Provide No Data Exclusivity for Biologics," August 26, 2013
• "U.S. Negotiators on TPP -- Don't Trade Away the Biopharmaceutical Research Sector," September 30, 2012

Comments

[Atari Man]

"Specifically, the Trump Administration seeks to ensure that NAFTA's terms "reflect a standard of protection similar to that found in U.S. law" ... and prevent or eliminate distinctions between protection of domestic and foreign intellectual property rights."

So, um, Trump wants the rest of the world to forego patent protection, just as the USA has done in the last few years? Gotcha.

[Skeptical]

Did not the TPP sink because of its "behind closed doors" creation and suspected overt influence of ALREADY ESTABLISHED businesses (and the obvious conflict of interest with truly protecting innovation - which necessarily includes disruptive innovation?