Trade

With tax reform having just become law, economists are trying to project the effects on the U.S. economy. Such calculation in a highly complex, dynamic economy is at least as much art as science but one trend seems clear -- the job market will continue to tighten. Some economists are predicting that unemployment will drop to 3%, nearly matching the lowest average unemployment rate on record (2.93% in 1953). But there are jobs and then there are good jobs—which will these new jobs be? A study by NDP Analytics provides some insight. It’s the intellectual property-intensive industries that will be driving the growth and creating the types of jobs and careers that people want.

“Reimportation” of prescription drugs is back as an issue, but only because Democrats seek to distract from the effort to repeal and replace Obamcare, according to Politico. By importation we refer to the ability of American consumers to buy their prescription drugs from overseas rather than from domestic sources, and particularly to large-scale importation, such as US drug distributors sourcing their drugs from overseas.

There has always been some cross-border traffic on pharmaceuticals, as drug prices in Canada can be cheaper than in the US. But the Medicare Part D prescription drug benefit, which came into effect in 2006, has significantly reduced this traffic by making prescription drugs available to seniors at more affordable prices.

There’s a reason why such importation is illegal today under most circumstances, and that’s because of safety. The rate of counterfeit drugs in other countries is staggering, and the only way to keep the counterfeit problem from infecting the US drug supply is through the rigorous inspection and supply-chain regime maintained by the FDA. And the FDA has repeatedly told Congress that it cannot guarantee the safety of drugs entering the US from other countries such as Canada, since it does not inspect those facilities. And when the FDA has been permitted to inspect overseas facilities, the results haven’t been encouraging, such as the extensive and discouraging history of the FDA with Indian pharmaceutical manufacturer Ranbaxy.

Some on the free-market side of the political spectrum argue that importation of prescription drugs is simply a matter of “free-trade,” which at least up until the last few months has been a persuasive argument when presented to Republicans. But, as professor Richard Epstein notes in an IPI publication noted below, importation of prescription drugs is actually a perversion of free trade, in that it rewards other countries for their price controls and socialized medicine systems, rewards them for their disregard for the patents of American drug companies, and would likely create shortages of much needed drugs in poor countries as their drug supply was diverted back to the US.

Our friends at the Illinois Policy Institute have invested a lot of effort over the last few years in documenting how high taxes, regulations, and political corruption and paralysis in Illinois are driving businesses out of the state.  The trend is large, and noticeable:

• Chicago saw the greatest population loss of any major US city in 2015
• Get the heck outta Dodge: Seven Illinois companies that have left

We’re in a political environment right now where, stunningly, in a very short period of time, free trade and the treaties that liberalize trade have gotten a bad rap.

Die-hard opponents of free trade and intellectual property have plainly stated their intention to wage a smear campaign against the largest trade agreement in history, the Trans-Pacific Partnership (TPP). Their transparent and tone-deaf tactics have been lampooned as one-sided and overly simple, but still they strain to create fear and anxiety among consumers and users at every opportunity. This, despite mounting fatigue and annoyance from their own supporters. For example, Redittor “binarybandit” posted:

I've seen EFF doing this lately with the TPP bill. They've been using fear mongering to make people believe that they're seriously gonna go to prison for making a free mod for a game, or that it's gonna destroy the internet somehow. People are eating it up though.

Right on cue, the latest effort to invent controversy centers on a breathless EFF conspiracy theory – government lawyers have secretly expanded the scope of penalties for copyright infringement during a technical review of the TPP text by changing the word “paragraph” to the word “subparagraph” in a footnote. 

To be fair, it is true that this change means the footnote only applies to one part of the paragraph, and that does actually make a difference.  The paragraph at issue sets out rules for calculating and applying remedies for criminal theft of intellectual property, and the footnote allows countries to ignore those rules, except for more significant cases.  The change means only the last part can be ignored (except for more significant cases), not the whole paragraph.  Sensing an opportunity, the EFF pounces insisting there is “no rational basis” for the change.  Let’s examine that.

The very first obligation in the paragraph — where the footnote no longer applies — is that the punishment should fit the crime.  In the precise terms of the agreement, countries must provide “Penalties that include sentences of imprisonment as well as monetary fines sufficiently high to provide a deterrent to future acts of infringement, consistent with the level of penalties applied for crimes of a corresponding gravity.”  Now, if the footnote applied to this requirement, it would be saying that in lesser cases, the punishment doesn’t have to fit the crime and doesn’t have to provide a deterrent.  Would that make any sense to you? 

I’ve just discovered the International Authors Forum (IAF), and I’m in love.

For one thing, IAF features prominently on their website and in their materials the critical text of Article 27 of the Universal Declaration of Human rights, which states:

Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

It drives the CopyLeft and Access to Knowledge folks crazy that the key international human rights document includes intellectual property rights as a basic human right. Yes it does. They try to reconstruct the sentence sometimes to make it sound like it means the opposite of how it is written, but they’re wrong.

I’ve tried to make some hay over the years with this fact, not only writing about it, but also getting physically accosted by activists at a WIPO meeting where I dared to read out the text of Article 27 during an IPI intervention (more here). Ah, memories.

Anyway, the International Authors Forum has a great document [PDF] on their website where authors from around the world including developing countries explain how expanding copyright exceptions and limitations would be harmful to their attempts to produce cultural products in their own markets. It’s worth your time.