Why ACTA? The shifting international IP political scene

Culprits or saviours?

There are various sources of information dealing with the Anti-Counterfeiting Trade Agreement (ACTA) online, but there is one point that seems to be covered less. Why is the Anti-Counterfeiting Trade Agreement (ACTA) being negotiated at all as a multilateral trade agreement? In other words, why is this not being negotiated at WIPO, or the WTO?

We need to make some political distinctions here. Any such questions need first to understand the current balance of power in the global IP scene, and also the motivations of the parties. It is easy sometimes to fall into manichean portrayals of intellectual property, maximalists are money-grabbing soulless enterprises, while those opposed to more protection are plucky romantic rebels fighting against the Evil Empire [insert Star Wars / Lord of the Rings reference here]. It is easy to see how such portrayal finds favour amongst geeks, we have grown up favouring the underdog, wanting to be Jedi fighting for the Rebel Alliance, or Frodo on his quest to destroy the One Ring. However, the IP scene is more nuanced, and I say this as a geek that is attracted to the romantic scoundrel notion.

There are two countries who are net IP exporters: The U.S. and the UK (which goes a long way in explaining the Digital Economy Act). If your IP balance sheet favours exports, then it is obvious that you will want to have a system in place that enhances your trade situation. The U.S. Trade Representative is not a mindless agency pushing for more IP protection to fulfil an evil agenda, it is doing so because it is in the best commercial interest of the U.S. We have to always keep that in mind. As such, the USTR has been engaged in the last decade in a clear strategy that tries to export stronger IP protection around the world, because at the moment anything that protects IP in a given territory will undoubtedly favour its balance sheet. TRIPS-plus agreements, and other bilateral efforts, have to be seen in that light.

During the 1990’s, the global maximalist agenda had the large international institutions on its side. The golden age of international maximalism saw the creation of the WTO, the TRIPS Agreement, and the WIPO Copyright treaties, followed by an unprecedented change in national laws to adopt such efforts. However, at the turn of the century, the international political pendulum swung in the other direction, the over-reach of the IP industries meant that policies were enacted that went against the best commercial interest of several developing countries. If you also take into account the access-to-medicines debacle, as well as the emergence of the Internet and widespread file-sharing, and you will see that maximalism did not have a good start of the new Millennium.

At the same time, the international institutional IP changed. The WTO and WIPO used to be places where large IP producing countries used to hold more sway, and it was easier to pass international agreements. However, as large developing countries started finding their voice, it became harder for IP owner countries to push their agendas. The culmination of this situation was the failure to approve the WIPO Broadcast Treaty in 2007, which was a big blow for the content industries. This Treaty was defeated by a combination of web activists, the tech industry and developing countries, and has to be taken as the final nail in the coffin for the quasi-unilateral control of IP owners of the international institutions.

Several other things have been happening at the international IP institutions. Policy-making at the WTO seems to have ground to a halt after the 2001 Doha Ministerial Conference. WIPO has also been seeing some structural and political changes. The institution has become more financially independent thanks to the success of the Patent Cooperation Treaty and the domain name dispute resolution procedure, which means that they do not have to take marching orders from content owners any more. Then there was the recent disputed election of the new Director General, where Brazil almost succeeded in winning the vote. It is precisely this balance between countries like India and Brazil on one side, and the U.S. and the EU at the other end, that has turned WIPO into a more balanced, but less functional institution.

This was made evident to me during last week’s 5th Session of the Committee on Development and Intellectual Property (CDIP). The institution seems to be completely stuck in political haggling between various groups, which is a result of the fact that all decisions have to be taken by consensus. In the current political climate, it seems unlikely that an international organisation such as WIPO can pass a maximalist treaty. So, if you are a country that wants to continue to protect its intellectual property at the international stage, what would you do? Enter ACTA.

Is ACTA needed? From an IP exporter perspective, the answer seems to be a resounding yes. The current system is not producing the desired results, namely to stop counterfeiting, and most importantly, the current international system seems not to be denting Internet file-sharing. So if you want to enhance protection in other trading countries, what you do is bypass the international institutions, and negotiate an agreement with chosen strategic partners. The list of countries negotiating ACTA is very indicative of where things are going. The U.S. is the obvious mover, the EU is interested in enhancing IP protection because as a whole it is close to being a net IP exporter, if it is not one already (I have to check the figures again). New Zealand seems to be an odd choice, but it is a country that has close links with Hollywood. Japan and South Korea are also countries that are on the verge of becoming IP exporters, if they are not already. Mexico and Canada are acting mostly in their role as NAFTA trading partners of the U.S. Singapore and the UAE are very conservative countries with strong IP protection and enforcement, so it seems like they would favour strong-hand approaches to IP. I have no idea about Morocco though, its presence sticks out a bit. Australia has been conducting a strongly pro-IP policy since the Howard government, even if one could argue that it has done so against its own interest.

So where does that leave us? The current ACTA draft has one interesting feature. It seems to export DMCA-level protection, so the one country to benefit the most will be the United States, but some of the other trading partners might benefit as well. We might see more efforts like this in the future if the current situation at the WTO and WIPO does not improve.