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PROTECTIONISM, FREE TRADE AND INTELLECTUAL PROPERTY (PART I)

August 13, 2013

PROTECTIONISM, FREE TRADE AND INTELLECTUAL PROPERTY (PART I)

Free traders and business generally prefer weak standards of regulation, especially the financial sector, which would prefer a system of self-regulation. They detest the idea of government’s telling them what they can and cannot do, and that works out well for Wall Street within the confines of a sovereign state. They can and do influence the regulatory system greatly; they are good at lobbying. You mess with a patent infringement or copyright violation here and you are in big trouble.  Courts will protect our innovators and huge damage awards can literally put the violators and infringers out of business.

However, there is a problem. With globalization and American  movies and drugs and myriad other forms of intellectual property spread all over the globe, there are many opportunities for overseas copycats and intangible property thieves to, for instance, make generics out of medicine under American patent. They are not within our “sovereign state” and our courts lack jurisdiction to do anything about it. Gone are the days a century ago when “trade agreements” were largely about tariffs, and gone are the days when Pfizer and Wall Street can (if they ever could on their own) force foreign market interests to honor American patents on movies, medicines et al. Even so-called industrial processes were and are up for grabs. Wall Street’s cozy playhouse in the Congress of the United States and campaign contributions in exchange for loose or no regulations mean nothing in Seoul or Beijing.

Trade has become far more complicated with globalization, so, though ostensibly free traders, American capitalists run to our government for protection of their property rights in overseas venues via trade agreements with the governments of such other countries in a classic case of “regulate those other people in their trade relations with us and make them respect our property rights – but leave us alone.”  American “free-traders” are not really against regulation by government so long as they are not regulated and those with whom they trade are. That’s the level playing table envisioned by “free trade?”

As Robert Kuttner points out in his “The Squandering of America,” “If trade were purely free, there would be no intellectual property rights. Such successful industrial countries as Switzerland and the Netherlands had no patents at all until the early twentieth century. The United States did not recognize foreign patents until the nineteenth century. With true free trade, India’s pharmaceutical industry would be at liberty to manufacture generic versions of drugs invented by American manufacturers, and China’s software companies could make knockoffs of Microsoft Windows.” Kuttner cites the foregoing as proof that “there is no such thing as free trade.” He is right, and I wish corporate America would stop pretending that they are for “free trade” and little or no government regulation when they are running to the government for both protection and regulation (so long as it applies not to them but to their competitors in a perfect example of double standard). They are in truth for both, and I agree with them.

I pride myself that I am a “protectionist” even though so-called “free traders” daily vilify protectionism as a remnant of old economics and contrary to the whole idea of competition in the marketplace. My response to Wall Street and corporate America’s accusations: You people are living in a mirage that you have concocted and don’t believe in yourselves. There is no such thing as free trade and you propagandists are not against regulation so long as you are exempted from it, inviting our government to regulate your competitors. You can’t have it both ways. Labor rights next – stay tuned.  GERALD  E

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