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Trade

October 27, 2015

Ag Committee Hearing Properly Draws Attention to Problem of Foreign Subsidies

Trade policy is starting to get interesting.

Trade is back in the policy discussion with the Trans-Pacific Partnership having been concluded and many waiting to see the final text of the agreement. It’s a major agreement, and if it’s ratified by signatory countries, will have a dramatic impact on U.S. trade going forward.

But there are other trade issues as well, including enforcement of existing trade agreements as well as those countries and goods that are not covered under trade agreements.

That was the topic of a hearing held last Wednesday by the House Committee on Agriculture, led by Chairman Michael Conaway (R-TX). The Committee is concerned about foreign agriculture subsidies that distort markets and target American producers.

Now, we’ve written before about this issue with a focus on the sugar markets. On the one ideological side you have people who overtly believe in protectionism in a mistaken pursuit of somehow benefitting American producers by protecting them from foreign competition and thus gifting them with artificially high prices.

On the other ideological side you have those who think that believing in free trade should mean immediately eliminating any policy that affects the flow of goods across our border. If other countries want to subsidize production of some good in order to gain market share in the world’s most lucrative market (the United States), we should let them. Unilateral disarmament, in other words. It matters not that they would put U.S. producers out of business—all that matters is that U.S. consumers would get lower prices, which is a net benefit to the nation. Read More >>

Posted by Tom Giovanetti | Comments

October 9, 2015

House Votes to End the Crude Oil Export Ban

The House of Representatives has just taken a major step toward reducing the U.S. trade deficit: ending the crude oil export ban. 

In 1975, when gas lines were long and voters’ tempers were high, Congress passed legislation prohibiting U.S. crude oil exports. The country had seemed to peak its oil production a few years earlier and was on a gradual crude oil production decline, and Congress wanted the country to keep every drop it produced.  Read More >>

Posted by Merrill Matthews | Comments

October 9, 2015

Congress Finally Does Something Useful and Lifts the Ban on Crude Oil Exports

We'll, here's some good news: The House voted today to lift the senseless and outdated ban on U.S. crude oil exports.

And while this may seem like a no-brainer, there are any number of no-brainer pieces of legislation that Congress isn't bothering to move, so this is progress.

There is no argument against allowing U.S. crude oil exports except for an extreme anti-fossil fuels mindset, which is as unrealistic as it is wrong.

Here's a piece written by IPI's Dr. Merrill Matthews on why the ban is outdated and should be repealed.

It's important for the Republican Congress to be passing this kind of commonsense legislation that the majority of the American people support, even if they suspect President Obama is going to veto it.

Let him. Force him to explain his rationale to the American people. Get him on record, and force all other Democratic candidates and elected officials whether they agree with the President or not.

One of the things that is so frustrating people right now is Congresses not bothering to pass good legislation because of the threat of a veto. In this baseball playoff season, Republicans need to stop playing wiffleball and start playing hardball. Read More >>

Posted by Tom Giovanetti | Comments

October 2, 2015

Let's Get Real about What's Fair in TPP Copyright Provisions

Last year I was invited by Bill Watson of the CATO Institute to make the case as to why it is critically necessary for U.S. negotiators to insist on strong IP provision in our trade agreements.  Intellectual property-intensive industries account for about two-thirds of U.S. exports – it would be malpractice for our negotiators NOT to work to prevent foreign theft of American innovation.

(I think I got the better of my fellow panelists at that event—you can watch it and judge for yourself.)

The TPP negotiators are in Atlanta this week trying hard to work through the last few, toughest issues, and Bill is back at it again, this time arguing that the United States should not only allow, but in fact demand broad exceptions to copyright in the laws of our TPP trading partners.  This again proves what I said last year – that the TPP debate is not really about trade, it’s about people who want weaker intellectual property rights.  (Bill was kind enough to reference this piece of mine in his, which is always nice.) Ok, so let’s have that debate.

Posted by Tom Giovanetti | Comments

July 31, 2015

The Australia-U.S. Free Trade Agreement Did NOT Blow-up Australia's Pharmaceutical Benefits Program

Right now, literally as I type this, Australian trade negotiators are reportedly resisting U.S. demands for increased protection of pharmaceutical and biotech innovation in the Trans-Pacific Partnership (TPP) agreement. They are no doubt motivated by the warnings of Australian academics and researchers that Australia’s Pharmaceutical Benefits Scheme (PBS), which the Australian government uses to control drug prices, will be weakened or undone altogether by extending the period of data protection for biologics, among other provisions.

The sky-is-falling warning from these academic critics of the pharmaceutical industry is that protecting the products of innovation will necessarily result in dramatic price increases, which Australia (and Australians) will no longer be able to afford.

Interestingly, Australian academics made this exact same argument in 2003, warning Australia about the treaty that was then being negotiated, the Australia-U.S. Free Trade Agreement (FTA).  

I have before me a copy of a paper published by The Australia Institute, entitled “A Backdoor to Higher Medicine Prices? Intellectual Property and the Australia-US Free Trade Agreement,” by Dr. Buddhima Lokuge, Dr. Thomas Alured Faunce, and Richard Denniss.

The paper predicted that the Australia-U.S. FTA would result in dramatic increases in the cost of prescription drugs in Australia.

“This paper examines five leading medicines near the end of their patent lives in Australia. Based on PBS expenditures for these drugs in 2003, we estimated the potential cost of likely changes to IP provisions under the FTA to the PBS and Australian taxpayers. The costs accrue over a four-year period from 2006 to 2009. . . . The ‘central case’ estimate is that the additional cost of these five drugs alone, as a result of IP provisions in the FTA, will be more than $1.12 billion with a lower estimate of $850 million and an upper estimate of $1.56 billion.”

But they were wrong then, and they’re likely wrong now. Read More >>

Posted by Tom Giovanetti | Comments

July 30, 2015

Australia Drug Prices Did NOT Increase After Australia-U.S. FTA

A piece in today’s Dominion Post (New Zealand) finds that warnings about higher drug prices as a result of free trade agreements are baseless, as least as far as facts are concerned:

“We can't assume medicine costs will increase if some patents or Intellectual Property protections are extended. Speculation about rising medicine prices under the TPPA mirror concerns Australians voiced over the U.S-Australia FTA. However, since signing the FTA in 2005, Australia's spend on pharmaceuticals has remained stable and the rate of expenditure has decreased. In 2006 Canada's pharmaceutical spend decreased after implementing an eight year data protection period. Similarly, after Japan increased data protection in 2007 to eight years, pharmaceutical spend decreased and health care spend increased by the year 2010.” Read More >>

Posted by Tom Giovanetti | Comments

July 15, 2015

TPP Critic Quigley Writes Article for Foreign Policy; Coordinates with Anti-IP Activists

On Monday, a writer named Fran Quigley had a piece published on the Foreign Affairs website that was highly critical of some of the provisions in drafts of the Trans-Pacific Partnership (TPP) agreement.

We’ll get around to dealing with the arguments in Quigley’s FP article in a separate blog post.

Quigley’s title of “Clinical Professor of Law in the Health and Human Rights Clinic” at Indiana University tells us much of what we need to know. If you merge health and human rights, you have already decided that access to every bit of the latest health care technology available is a human right, and if it’s a human right, it’s your right to have it for free, or for something very close to free.

That makes Quigley an activist more than an analyst of the provisions of the TPP. A look at his cv demonstrates that Fran is a social justice crusader, a proponent of the labor movement, and a neighborhood organizer type. Read More >>

Posted by Tom Giovanetti | Comments

June 3, 2015

Toward a Free Market Agriculture Policy

A few weeks ago Americans for Limited Government Foundation published a paper by Dr. J. Wesley Burnett of the College of Charleston on "Moving to a Free Market Agriculture Policy." It's a great, short survey of U.S. agriculture policy, especially of recent policy changes, and the role of U.S. agriculture in global agriculture markets. If you're looking for an accessible way to get up-to-speed on federal agriculture policies, this paper is a great means of doing so.

I was drawn to the paper because it also touches on sugar policy reform, something I've written on a couple of times recently for IPI. The paper endorses a multilateral approach to solving the sugar subsidy problem, as I have also suggested. Read More >>

Posted by Tom Giovanetti | Comments

May 31, 2015

An Important Supporting Argument for the Trans-Pacific Partnership (TPP) agreement

An important (though not primary) argument for the importance of the Trans-Pacific Partnership (TPP) trade agreement, and thus for the importance of trade promotion authority (TPA):

"The only thing that could stop China from dominating Asia would be if a hostile, sustainable alliance of Pacific Rim nations emerged." Read More >>

Posted by Tom Giovanetti | Comments

May 2, 2015

Now Is the Time for Republicans to Back TPA (Trade Promotion Authority)

Republicans should enthusiastically support Trade Promotion Authority (TPA). Yes, Obama is mostly right on trade. Even a stopped clock is right twice a day.

This TPA extends past the Obama admin into the next, hopefully Republican, administration. So it's not just for Obama.

"Why not wait until we're sure the next president is a Republican?" some say. Here's the problem: Right now you can peel off a certain number of Dem votes for TPA because it's for a Dem president. If a Republican is president, you'll never get those Dem votes.

Now is the time for TPA. Not just because it's right, but because it's in the strategic interest of the next (hopefully) Republican president as well. Read More >>

Posted by Tom Giovanetti | Comments

January 22, 2015

An Issue In Which We Can Agree: Fast Tracking the TPP

Trade may be the one area in which Congressional Republicans and the president can work together, and Obama has called the Trans Pacific Partnership a high priority that would not only strengthen the U.S. as a leader in the Pacific Rim, but also create jobs, boost investment, and be a boon to small businesses.   

  Read More >>

Posted by Erin Humiston | Comments

November 19, 2014

Can President Obama Work with the Republican Congress on Trade?

An obvious question after the sweeping Republican election win is: “What hope is there for constructive outcomes between President Obama and the Republican Congress during the next two years?”

President Obama and Republican leaders have both answered this question with at least one answer in common: Trade policy. New Senate Majority Leader Mitch McConnell says that he and the President have already discussed trade as one area of possible cooperation,

There now appears to be a renewed possibility of Republicans passing fast track trade promotion authority early in the new Congress, which would revitalize trade negotiations such as the Trans Pacific Partnership (TPP) and other agreements. In general, it’s fair to say that Republicans are more favorably inclined toward trade liberalization than are Democrats, which is at least part of why Democrat Senate leader Harry Reid went out of his way to kill any possibility of progress on trade agreements early in 2014.

Support for freer trade has always been a hallmark of free-market conservative philosophy, although Republicans have also occasionally been guilty of protectionism, and there seems to be a disturbing distrust of free trade among some in the Tea Party movement that policy thought leaders like IPI will be addressing as part of our trade policy program. Ultimately, the evidence is overwhelming that freer trade leads to more economic efficiency and to greater job creation in areas of each nation’s competitive advantage. Read More >>

Posted by Tom Giovanetti | Comments

October 14, 2014

Ending Sugar Subsidies the Right (the Only?) Way

Because of our interest in trade policy and general opposition to government subsidies and other interference in private markets, we’ve done a few pieces on the issue of sugar subsidies, and lately about the best way to phase them out.

About this time last year we released “Solving the Sugar Subsidy Problem,” which outlined the basics of the issue and suggested that the solution must be some sort of global trade pact, most likely through a World Trade Organization (WTO) process.

And this past May we released “Seeking a Global Solution in Sugar Trade Policy,” which explained some of the enormous sugar subsidies and other trade distortions common to trading partners like Brazil, India, Mexico and Thailand. In the face of such global subsidies, only a global solution is probably workable.

Otherwise, you simply allow subsidized foreign competition to destroy our domestic sugar industry, after which time you could expect foreign suppliers to ratchet back up the price, as we explained.

Last week, Americans for Limited Government released a new paper reviewing the material on foreign sugar subsidies by those same four major producers (India, Thailand, Mexico and Brazil), and essentially pleading for free-traders and free-market promoters to embrace the global agreement model, as outlined by Rep. Ted Yoho (R-FL).

Essentially, the Yoho “zero-for-zero” proposal is a commitment by the U.S. that we would eliminate all our sugar subsidy programs if our trading partners would agree to come to a similar agreement. The Yoho plan would require some sort of trade agreement, either a bilateral or multilateral “Sugar FTA” or a WTO agreement. But, under Yoho’s plan, the U.S. takes the first step by making the commitment.

The alternatives are to either leave in place the status quo, which free-marketers and free-traders oppose, or unilateral disarmament, which free-marketers and free-traders (I argue) SHOULD oppose. Read More >>

Posted by Tom Giovanetti | Comments

September 23, 2014

Yes, Of Course, In Trade Agreements, the Devil Is In the Details

Simon Lester, who I met earlier this year speaking at a Cato event, has a blog up over at Cato at Liberty giving a somewhat nuanced response to my new IPI Ideas on including IP protection in trade agreements.

His point, essentially, is that I'm being very general rather than granular in my argument. And he's completely right, of course. My argument in the piece IS a general argument; namely, that it's appropriate and important to include IP in trade agreements.

And, in fact, my general argument in favor is a response to the general argument that is being made by many, including Cato personnel, that IP should NOT be included in trade agreements. Read More >>

Posted by Tom Giovanetti | Comments

September 19, 2014

U.S. Petroleum Exports Up, Crude Oil Imports Down

We've spoken several times about how the United States has the potential to become energy self-sufficient through the shale revolution. Indeed, the U.S. could become the world's #1 exporter of energy, if the right policies are put into place.

As evidence that this is beginning to happen, Bloomberg reports that, in August, U.S. exports of petroleum hit record highs, and imports of crude oil hit record lows.

U.S. exports of petroleum products reached a record in August for the month as refiners boosted rates, the American Petroleum Institute said. Read More >>

Posted by Tom Giovanetti | Comments

 

Total Records: 45

 

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