Punishing Theft Does Not Violate Free Trade

Economics21 | 1/10/2017 | Staff
Mijac (Posted by) Level 3
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Many assert that President-elect Donald Trump is against free trade. But standing against the theft of intellectual property and old-fashioned mercantilism, as Trump has promised to do, is an appropriate role for the chief executive. Allowing other countries to cheat us is not free trade.

America consistently outperforms the rest of the world in the sphere of intellectual property. People throughout the world identify with American art, music, software, and clothing designs, and benefit from American pharmaceuticals and patents.

Property - Year - United - States - Trade

Yet American intellectual property is routinely stolen. Each year, the United States Trade Representative publishes a report entitled “Special 301 Report” on intellectual property theft—yet does nothing about it.

This year Algeria, Argentina, Chile, China, India, Indonesia, Kuwait, Russia, Thailand, Ukraine, and Venezuela are the 11 countries on the “Priority Watch List.” USTR has “the most significant concerns regarding insufficient [intellectual property rights] protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection.” Another 23 countries are on a “watch list.”

Countries - Priority - Watch - List - Year

Most of the same countries are on the “priority watch list” year after year. China and several other countries have been on the list for many years. There is no credible punishment from stealing American intellectual property, so countries continue to do it. Theft pays.

Intellectual property is stolen when American corporate employees are thrown in prison or harassed in a government shake-down, or when American companies are hauled into foreign courts and accused of stealing their own patents. Sometimes American Internet companies are kicked out a country that fosters its own imitative companies to displace the American ones. In other places, pharmaceuticals are manufactured without license. And by now everyone knows about foreign hackers invading American websites.

Businesses - Property - Theft - Theft - Countries

American businesses have grown inured to intellectual property theft. They expect theft in countries around the world and they cannot...
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