TPA, Free Trade and Technology

May 22, 2015. Businesses that export IT equipment, software, or services, businesses that provide online platforms, businesses that rely upon the internet for distribution physical and digital goods, and businesses that depend upon the free flow of information and data across national boundaries, all stand to benefit from free trade agreements (FTAs).

These businesses (and their investors, workers, and suppliers) would benefit from removal of tariff barriers, better access to foreign markets, and enhanced protection abroad of their patents, copyrights, trade secrets, and trademarks. Hence, these business sectors, and the groups that represent them, tend to advocate passage of a TPA bill.

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release that the Senate passed bill "provides U.S. trade negotiators the tools to promote digital commerce in the 21st century. TPA contemplates future trade agreement language that will break down barriers to Internet commerce, providing new protections for the cross-border provision of online services. The Senate makes clear that it expects trade negotiators to promote balanced intellectual property and strong intermediary liability limitations in future agreements. It also directs negotiators to continue to expand market access for U.S. tech products."

Black said too that "it is imperative that trade negotiators prioritize areas of importance to a growing sector -- the Internet economy".

Gary Shapiro, head of the Consumer Electronics Association (CEA), stated in a release that "This legislation provides a much needed, balanced package that takes into account the realities of the digital economy and Internet era." He said that "Americans thrive on trade and relish competition -- we are not isolationists. Free trade encourages innovation and opens new markets to American manufacturers. We now urge House members to swiftly pass TPA legislation".

Victoria Espinel, a former Assistant U.S. Trade Representative who is now head of the BSA Software Alliance, stated in a release that "The Senate passing TPA represents a huge win. By doing so, the Senate has reinforced America’s leadership on international trade, and the software industry's ability to operate globally. TPA is indispensable when it comes to ensuring we can continue to compete and grow, and help ensure the U.S. can stand up for American companies in the face of global threats to close markets".

The movie, music, video game and other creative sectors whose works are distributed and/or infringed by internet based technologies also support the negotiation of bilateral and multilateral free trade agreements that provide for the protection of copyrights and market access rights abroad. Hence, these sectors support TPA.

Former Sen. Chris Dodd (D-CT), who is now head of the Motion Picture Association of America (MPAA), stated in a release after Senate passage that the "American motion picture industry relies heavily on trade with foreign markets for economic growth that creates jobs here at home. Our industry supports 1.9 million American jobs, generating over 70% of theatrical revenue overseas and registering a positive services trade surplus of $13.4 billion."

Dodd (at right) said that "Today's passage of TPA is an important step towards completing meaningful trade agreements like TPP that will allow our industry to continue this growth in some of the world’s largest and most important markets."

(When former Sen. Dodd represented the state of Connecticut as a Democrat, he voted against giving former President Bush TPA. See, May 23, 2002 Roll Call No. 130 and August 1, 2002, Roll Call No. 207.)

Copyright Protection and Fair Use. The creative sectors that depend upon copyright protection, and the technology sectors that rely upon fair use, both have interests in free trade, but have also sparred for years over just what should be the copyright related provisions of FTAs.

Former Rep. Susan Molinari (R-NY), who now works for Google, stated in a release that "digital exchanges", such as "YouTube, Facebook, Spotify, Twitter", have "become an increasingly important driver of the global economy. As a result, more open trade has the potential to give creators, online platforms and other businesses access to more consumers around the world. And Trade Promotion Authority -- which empowers U.S. officials to negotiate trade agreements subject to up or down votes in Congress -- presents an opportunity to modernize our trade strategy for the Internet era."

But, she continued, "While U.S. trade agreements have historically included copyright provisions to protect right holders, the Internet's success depends on both copyright protection and pro-innovation limitations and exceptions, such as fair use and safe harbors for online platforms. Without both, Internet platforms -- and the explosion of creativity and new distribution channels they have enabled -- would not be possible.

She wrote that Google favors a "balanced approach" in FTAs, without which "there is a very real risk that the Internet's most popular platforms -- like search engines, video sharing sites, and social networks -- could be hindered or even blocked in foreign markets on the basis of one-sided copyright principles".

Similarly, the CEA's Shapiro stated that "This and all future trade agreements must balance intellectual property rights and an open-and-fair flow of commerce".

Democrats, Unions, and TPA. While free trade is in the interests of a wide range of technology and tech dependent sectors, many of the legislators who represent states or districts that are home to many of owners and employees of these businesses vote against TPA bills.

For example, the members who represented the Silicon Valley area districts all voted against TPA in 2001. Ditto for the Hollywood area districts. Moreover, Rep. Anna Eshoo (D-CA), Rep. Zoe Lofgren (D-CA), and Rep. Mike Honda (D-CA) remain in the House.

However, this voting pattern exists because these districts elect Democrats, and the Democratic Party and its members in the House and Senate are particularly dependent upon, and supportive of, organized labor, which aggressively opposes free trade.

The Center for Responsive Politics (CRP), which studies Federal Election Commission (FEC) data, states that for the 2013-2014 federal election cycle, labor raised over $140 Million, and that about 89% of labor's contributions to candidates went to Democrats. See, CRP web page.

The AFL-CIO is particularly active in opposing free trade. It stated in a release on May 15 that unions and their "allies are escalating the grassroots campaign in opposition to fast track".

It elaborated that "Since March, union members and our allies have organized more than 550 events, including 84 in the past week, against fast track and thousands of workers have traveled to D.C. to rally and lobby Congress. Unions have also made 1.5 million phone calls to union members warning against fast track, generated 114,700 phone calls and nearly 12,000 handwritten letters to Members of Congress and gathered more than 40,000 petition signatures. Digital advertisements targeting 16 Senators and 36 Members of Congress have made more than 20.5 million impressions, 570,000 of which came from pre-roll ads voters watched during the House Recess."

Republican Representatives and Senators tend to be less affected, if at all, by the lobbying activities of the AFL-CIO.

Members of Congress are not unaware that in both the 2014 House and Senate elections the AFL-CIO spent heavily on independent expenditures, that 100% of its expenditures in favor of a candidate was for Democrats, and that 100% of its expenditures against candidates was for Republicans. See, CRP summary of AFL-CIO independent expenditures on House and Senate races. (Actually, the AFL-CIO spent a tiny fraction of 1% against a Democrat.)

(Published in TLJ Daily E-Mail Alert No. 2,730, May 26, 2015.)