STEVE INSKEEP, HOST:
President Obama landed in the Philippines today, the last stop on his eight-day tour through Asia. Much of this trip has focused on a potential free-trade deal. A dozen countries along the Pacific Rim are negotiating it.
The Trans-Pacific Partnership would establish standards on everything from intellectual property to labor. The United States has tied its economy so tightly to Pacific nations that a trade deal like this could touch almost every part of American life. In fact, you may be surprised at just what this deal may cover.
We talked over the U.S. agenda with Ernie Bower of the Center for Strategic and International Studies and also Dean Baker of the Center for Economic and Policy Research.
DEAN BAKER: We've been pushing for stronger patent related protections; data exclusivity that if a company - a drug company - has a drug approved by the Food and Drug Administration or whatever the national revelatory agency is, that data cannot be used by another company for a certain number of years. And the United States has tried to push for the lengthy periods of data exclusivity, which in effect extends a monopoly possibly for a very long period of time.
INSKEEP: This is really interesting, Ernie Bower, because...
ERNIE BOWER: Yeah.
INSKEEP: ...I would've thought of this as a free trade agreement. That would be the principle here. But if you talk about strengthening patent protections, that's arguably restricting trade to make sure that a company that already has an advantage gets to keep it longer.
BOWER: Actually, I think it's, I would put that more in the category of sort of pro-investment, right? Innovative companies actually get paid for research and development in developing these new drugs. That costs a lot of money. It costs, you know, somewhere between one and two billion dollars to create and patent and test a new drug. And companies who do that need to get paid back for that investment. So, if you don't protect that sort of investment and research, no one will develop any new cures for cancer or other diseases.
INSKEEP: What is it the motion picture industry wants out of this? I'm told that moviemakers also have an interest in the Trans-Pacific Partnership.
DEAN BARKER: They would like stronger copyright protection. And also this is where we may get an issue along the lines of Stop Online Piracy Act because, you know, the entertainment industry was very big in pushing Stop Online Piracy Act here in the United States. It essentially held intermediaries responsible for moving copyrighted material and it set up sort of an extra judicial process where a website could be shut down if they argued that they had copyrighted material there that was not authorized.
INSKEEP: Somebody's movie or video or whatever else.
INSKEEP: But now here's this same proposal. Is it coming back as part of the Trans-Pacific Partnership?
BARKER: It's entirely possible that it will. I mean it's up for negotiation. If something like that can be included in the final text, at this point we're not in the position to say.
BOWER: The intention, I think, of U.S. negotiators is to protect and promote the investment and innovation. And what's interesting, Steve, in Asia, is that while a lot of the Asian companies used to be the bad boys in terms of ripping off entertainment movies, copyrights, a lot of the new innovation in the world is coming from Asia. So with that has come a real grassroots pull for these sort of protections in places like Thailand and Korea and other places. So it may be that the time has come to negotiate and get standards across the Pacific for these sorts of rules.
INSKEEP: So what are the risks and rewards then of trying to standardize some of the rules regarding copyright, regarding patents, regarding intellectual property across this 12 nation area?
BARKER: Well, actually, the big risk is essentially who's at the table, that overwhelmingly, these are the industry groups, they're not the consumer groups.
BOWER: And I think on a benefit side, the idea is that if you have standards governing innovation and intellectual property, you actually spur on a new paradigm of cross-border investment innovation coming from Asia, coming from the United States. We can do a lot more together. The real risk in TPP is not making the rules as Asia rapidly integrates its economies. If we aren't at the table making those rules together, we would substantially left on the sidelines, which would be a big deal.
BARKER: Now one of the interesting aspects - at least to me - is that there are very large potential gains from trade that we're not even talking about. So if you look at our health care sector, we pay more than twice as much per person for health care in the United States than people do in other wealthy countries with really nothing to show for it in terms of outcome. That suggests an enormous possibility for gains from trade. That's not really on the table. Suppose that, you know, one of the main issues was how do we get more doctors will meet U.S. standards, you know, coming in from Thailand, from other countries in the region who would be allowed to practice in the United States, just like a doctor that, you know, was born in New York or California? That would offer enormous potential gains in trade. That would put downward pressure on doctor's wages. That's fine by me. It would mean much lower health care costs for people in the United States. But that's really not at the table because of how we've constructed this package.
BOWER: Yeah. I think that's a good point. You know, these issues like immigration and movement of people really should be in a 21st century agreement and where it's not clear to what extent they will be included.
INSKEEP: Ernie Bower and Dean Baker, thanks very much to both of you.
BARKER: Thanks for having me on.
BOWER: Thank you.
INSKEEP: Ernie Bower chairs for Southeast Asia Studies at the Center for Strategic and International Studies. And Dean Baker is co-director of the Center for Economic and Policy Research.
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