USTR Froman: FTAs A Way To Get Higher IP Standards Into Global Trade “Bloodstream”

United States Trade Representative Michael Froman today said that bilateral and regional agreements offer a way to get higher standards in areas such as intellectual property rights protection “into the bloodstream” of the global trading system, when it is not possible to do it through multilateral agreements.

Speaking to The Economist’s Buttonwood gathering in New York, Froman said that “global trade is expected to grow is expected to grow more slowly in the future than it has in the past.”

Froman’s speech is available here.

One way to address it is to open markets further, creating new opportunities for trade and investment and reducing unnecessary costs and efficiencies in the system. That is why the Obama administration is pursuing “perhaps the most ambitious trade agenda in American history,” he said.

In particular, he referred to the Trans-Pacific Partnership (TPP) and the EU-US Transatlantic Trade and Investment Partnership or (TTIP), which he said “together will allow us to conduct free trade with economies representing nearly two-thirds of global GDP.”

Through these agreements, the US is trying to bring global standards higher on issues like labour, environment or intellectual property rights protection, he said.

“Other countries are busy negotiating preferential access to key markets. They may not share our high standards on labor or environmental or intellectual property rights issue protections.”

“So we need to take the field and help set the standards,” he said. “Otherwise, we will be standard-takers in a global economy that does not necessarily reflect America’s interests and values.”

Froman said all parties recognise that multilateral trade liberalization “is the highest and best form of trade liberalization.” But he said it can only succeed “if and when all countries, including the emerging markets, are prepared to take on responsibilities and open their markets commensurate with their role in the global economy.”

So until then, he said, “all we can do is collaborate with what we expect to be an increasingly broad coalition to raise the standards, develop new disciplines and set new norms.”

“As these norms make their way into the bloodstream of the international trading system, it is our hope that they ultimately will become hallmarks of the multilateral trading system,” Froman said. “The stronger we can make TPP, TTIP, and these other agreements, the more compelling it will be for other countries to raise their own standards to compete with them or to join them outright.”

The US needs to ensure that trade agreements make it possible for American workers to compete and to make sure, “through the enforcement of our trade rights, that we hold other countries to the highest possible standards,” he said.

According to reports, some countries in the TPP negotiations, such as Chile, have pushed back against the US attempt to raise IP standards above those agreed in existing bilateral trade agreements.

Froman told Intellectual Property Watch afterward that the IP rights chapter of the TPP is still under negotiation following a recent round of negotiations on it. “We’re working on it,” he said.

In his speech, he urged Congress to support a push to grant the President trade promotion authority, which would limit Congress to a yes or no vote on trade agreements negotiated by the White House.

Froman also painted a relatively positive economic picture of the US compared with its trading partners, but took a swipe at gridlock in Washington, DC which undermines the positive movement.

“In many respects, the United States is the nicest house on a relatively ugly block,” he said. “We have dealt aggressively with problems in our financial sector, are seeing a recovering housing and jobs market, de-leveraging of household debt, and the discovery of new sources of energy creating the potential for a renaissance in American manufacturing while significantly lowering greenhouse gas emissions.”

“For the United States,” said Froman, “our risk is that our political system fails to do what it needs to do – on fiscal issues, immigration, trade and other issues – to lock in this virtuous cycle.”