Trans-Atlantic Trade and Investment Partnership: IP protection needed now more than ever
Aug 16, 2014
The EU has recently initiated an Action Plan, to combat the violation of the Intellectual Property Rights. This action plan includes non-legislative efforts to inhibit the flow of IP infringed products within the economies of member nations. With the number of IP violations only growing, a combative strategy is not only timely, but economically efficient. Money for R&D firms set aside monetarily spurs innovation which, in return, drives economic growth and sustainability. When industrial modernizations, produced goods, and overseas services are pirated or copied, it not only harms respective industries but also the economy as a whole. Profits from innovation are thus tarnished, leaving companies, consumers and the government to inherit the burden while third-parties profit.
The most intriguing part of the Action Plan includes the non-legislative enforcement strategy. This enforcement strategy aims at stripping gains from infringers on an industry level, instead of just on an individual basis. It also hopes to run globalization efforts to include IP protection rights in bilateral trade agreements, using the same enforcement approach. Doing this would allow cross border cooperation of IP, giving the global economy a needed boost. This addition would not be without its potential impediments, nonetheless.
In 2012 an act similar to the EU Action Plan, titled the Anti-Counterfeiting Trade Agreement (ACTA), was shot down by the EU parliament due to implementation worries within the TTIP and lack of information transparency. Therefore recent history does play well into a sure positive outcome for champions of IP rights. In order to settle immediate criticisms, a balance must be struck between the need to protect property rights and the incentive to innovate while continuing to provide outlets to new information. Despite criticisms and past inter-parliamentary qualms, IP protection is needed now in bilateral Free Trade Agreement’s (FTA) more than ever. According to the most recent data, fabricated goods account for 7% to 8% of world trade. This translates into approximately €1 billion in losses and fiscal encumbrance. These losses affect all players in the economies of an FTA. The governing body loses potential tax revenue, businesses and industries lose profits, prospects for Foreign Direct Investment (FDI) decrease, and the safety and well-being of consumers is put at risk.
Within the TTIP spectrum, IP protection is essential in order, for both the EU and U.S., to reap the full benefits of this agreement. Both economies are extremely sensitive to IP infringement and without protection; the economic purpose of an FTA becomes defeated. In the EU, IPR-Intensive Industries account for 26% of employment and 39% of GDP. For the U.S. it accounts for over 40% of employment and 38% of GDP. The TTIP or any FTA cannot succeed economically unless these numbers are addressed and dealt with substantively. Innovation is the driving force behind any free-market economy, and when the incentive to innovate disappears, sustainability and growth become highly unattainable.