NAFTA Needs Strong IP Protections for America’s Creators and Innovators

As the United States pushes to finish negotiations to modernize and rebalance the North American Free Trade Agreement, the U.S. negotiating team ought to build on its successful conclusion of the United States–Korea Free Trade Agreement talks and continue toughening up intellectual property protections for America’s creators and innovators.

Stronger IP rights abroad would encourage more lifesaving research and development, resulting in more and better treatments for patients around the world and more U.S. jobs in the dynamic life sciences sector.

Effective patent enforcement and protection is associated with the faster introduction of new innovative medicines in a market, giving patients access to the latest breakthrough therapies.

IP protections such as patents, trademarks, and copyrights prevent people from ripping off creators and inventors’ intangible works. Without such protections, the modern economy would grind to a halt.

Here’s why. An enormous amount of time and money goes into developing the formula for a successful medicine, or writing a chart-topping song, or penning a best-selling novel. But once the products have been created, without IP protections, it would be easy for rivals to sell knockoff copies at rock-bottom prices.

Creators and inventors would never be able to earn back their investments if competitors could immediately piggyback off their hard work. Companies would stop funding innovative products in the first place.

IP-intensive industries like the biopharmaceutical manufacturing and creative content sectors drive the American economy. They support nearly 58 million jobs and pay their employees 45 percent more than those working in non-IP-intensive fields, according to a recent U.S. Department of Commerce report. The biopharmaceutical sector alone added more than $1.3 trillion to the economy in 2016.

Innovating and manufacturing new medicines is an expensive and high-risk endeavor. Bringing just one drug to market requires dozens of researchers, years of testing, and thousands of clinical trial participants. A recent study found that developing a new medication costs well over $2.5 billion dollars.

One of the few things that ensures North American companies take on this risk is their legal right to market exclusivity for a limited period of time. That prevents a copycat drug developer from immediately swooping in after an innovative company has done all the leg work and profiting from its years of research and investment.

That’s a real, tangible incentive to pursue risky research.

And it works. Thanks to strong IP protections, the United States is able to draw and retain top-tier talent from around the world. For the past ten years, the majority of the new medicines throughout the world were developed right here at home.

To accelerate this pace of breakthrough discoveries, the world needs stronger IP protections for medical researchers and manufacturers in overseas markets. Such protections would encourage more people around the world to engage in more research and development, which is desperately needed to find cures for devastating diseases like cancer or Alzheimer’s. It’s also needed to cross the finish line on some very promising breakthroughs, like personalized medicine and treatments that can repair damaged genes to heal us.

Without serious intellectual property protections in trade agreements, we’ll never see these advancements come to fruition. Instead, we’ll see copycat medicines and experience a sharp decline in drug research and development as innovative drug makers shy away from pursuing risky new endeavors, since they wouldn’t have a fair chance to earn back their massive R&D costs. U.S. companies might even avoid selling their products in countries with weak IP protections.

U.S. negotiators should hold firm for a new NAFTA that better protects intellectual property.

Brian Pomper is the executive director of ACTION for Trade.

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