The United States faces a great challenge from China.
One weapon we have in that struggle is trade, but trade only works if what you’re selling doesn’t get stolen first by the prospective buyer.
The past year has opened the eyes of many to China’s threat to both the U.S. and global economies. The release of the coronavirus on the world (whether this was intentional, accidental, or something in between is still unclear) had direct and indirect costs in the many trillions of dollars.
The only reason the damage was not more severe was that U.S. drug companies were able to produce vaccines in record time. But now President Joe Biden wants to give away the intellectual property rights associated with these vaccines. He would do so via a maneuver known as a “TRIPS waiver.” There’s little doubt that the most direct beneficiary of that giveaway would be China, which is in a position to use its vast manufacturing capacity to ramp up production of knock-off Pfizer, Moderna, and Johnson & Johnson vaccines. Normally, China has to steal the intellectual property of American patent and copyright holders, but Biden is saving them the trouble.
In this error, Biden would be building off a big mistake made by his predecessor with respect to trade with China. One of former President Donald Trump’s first acts in office was to remove the U.S. from the Trans-Pacific Partnership, a free trade zone in the Far East. Commerce in that rapid-growth region is going to happen regardless, but it’s not clear whether this trade will be more influenced by the legal and economic philosophies of the U.S. or China. It’s essential that we get TPP back on track before China exercises its soft and hard power in its geographic sphere of influence. The ad hoc tariffs Trump imposed and that Biden has been slow to remove are a poor substitute for a purposeful trade strategy like TPP.
Securing trade that protects intellectual property isn’t just important when dealing with China, and it doesn’t just affect the U.S.
The Canadian and Ukrainian governments have a free trade agreement. A Canadian company producing energy in Ukraine was shut off by the government in violation of Ukrainian law, likely because the energy produced was competing too successfully with domestic and regional sources. Lawsuits are pending, but this type of activity, which is common in China and in countries that emulate China’s lack of respect for intellectual property rights, tends to end in drying up foreign direct investment, an outcome that hurts everyone.
The Biden administration needs to use American influence directly with other nations and indirectly in bodies such as the World Trade Organization to protect the intellectual property rights of our innovators. It also ought to come to the aid of major trading partners like Canada to help them secure their own rights. Only in solidarity will Western concepts of intellectual property rights survive.
Whether it’s a vaccine made in America, a solar cell made in Canada, or the latest Marvel movie, trade is impossible if the prospective buyer reserves the right to steal the merchandise. Biden certainly shouldn’t assist in that Chinese aspiration.
Ryan Ellis is the president of the Center for a Free Economy.
