Free Trade vs. Intellectual Property

Matt Yglesias posts an email he got from minority leader Pelosi:

House Democratic Leader Nancy Pelosi, the Democratic leadership, and senior members of the Ways and Means Committee sent a letter to President Bush today calling for immediate action to promote and safeguard American intellectual property (IP) around the world. The Democrats made the case that cracking down on piracy and theft of American IP is critical to restoring economic growth, creating jobs and shrinking the trade deficit.

His analysis of this is exactly right:

Some of this relates, according to the press release, to counterfeit auto parts and since I don’t even really know what that means I’m not going to say Pelosi’s wrong about it. As it pertains to software, music, and movie piracy, however, she’s all wet. Developing countries have always had weaker IP protections than rich ones. Certainly, the United States had very weak IP in its early days. That’s simply a rational response to the objective situation. Now it’s arguably true that the contemporary situation (internet and so forth) calls for globally uniform intellectual property rules. But there’s no way that we should achieve that goal by having everyone adopt US IP policy. Our current IP regime is too strict for the United States, and from the perspective of developing countries optimal policy would be even weaker than what would be optimal for the United States.

The problem is that the WTO/TRIPS process has been captured by a handful of large first world companies and is propounding a set of rules that don’t reflect the interests of average Americans or average Europeans much less average Chinese people. I’m not, in general, a critic of the free trade concept, but the multilateral trade regime has become increasingly focused on this business (which, despite the name, is only “trade-related” in the loosest possible sense) rather than the lowering of barriers to the exchange of goods and service.

Free trade is an urgent priority for the poor in the third world because it gives them access to a broader market for their goods and services. The moral case for free trade is therefore strongest for those goods that third worlders are likely to have available to sell. Frankly, Uganda and Peru not likely to have a strong movie or software industry any time soon, so even if American-style copyright laws were a good idea for them, it’s a pretty low priority. It’s far more urgent to make progress on lowering trade barriers for agricultural and labor-intensive manufactured goods, which third world farmers and businesses do have a realistic shot at offering to the world market in the near future. Unfortunately, I suspect our trade negotiations are driven more by lobbyist pressure than they are by a genuine concern for the well-being of poor people in the third world.

SHARE: