Congress Needs to Make Trade Enforcement a Priority
The Trump administration has set an ambitious trade agenda for the remainder of 2020. In a recent House Ways and Means Committee hearing, U.S. Trade Representative Robert Lighthizer stressed the president's intent to crack down on foreign countries that discriminate against American business and innovators.
Getting tougher on trade enforcement will boost our economy and help the millions of Americans who are struggling to make ends meet amidst an unprecedented economic downturn. But the White House cannot — and should not — accomplish these goals unilaterally. Congress plays a critical role in trade — and thus should make trade enforcement a priority.
Americans benefit broadly from strong international trade agreements. International trade supports close to 39 million jobs across the nation. Small and medium-sized businesses — which create more than two-thirds of all new jobs — are especially reliant on trade and stand to benefit the most from it. These businesses make up 98 percent of U.S. exporting firms, according to USTR.
Sadly, many of these businesses are getting ripped off, as other countries unfairly discriminate against American companies.
Consider the rampant theft of intellectual property. America's IP-intensive industries make everything from software to movies and medicines. More than 45 million American jobs depend on IP industries. Together, U.S. IP is worth $6.6 trillion.
The United States employs various legal safeguards, including copyright laws, patent protections, and market exclusivity periods, to prevent malicious actors from stealing inventors' IP. Thanks to these protections, U.S. innovators can attract the investment funding that results in lifesaving cancer drugs, breakthrough smartphone features, and better crop seeds.
It's a different story abroad. Many foreign nations want to benefit from U.S. innovations, but refuse to value these products.
The Japanese government, for instance, intentionally discriminates against U.S. biopharmaceutical companies and refuses to appropriately value American-made medicines. This reduces U.S. exports, harms American manufacturers, and impedes U.S. scientists' quest to find the cures of tomorrow.
India and Brazil, meanwhile, frequently ignore U.S. patents altogether, thus discouraging U.S. businesses from opening shop within their borders.
And Indonesia recently imposed costly tariff regulations for digital products like music, movies, videos, and software — all of which are vibrant U.S. industries.
Businesses lose an estimated $600 billion each year because of IP theft. At a time when unemployment is over 11 percent, with some 19 million Americans receiving unemployment benefits, U.S. lawmakers can't afford to let these egregious crimes continue.
The Trump administration's vow to strengthen IP enforcement abroad is a noteworthy step in the right direction. But the administration's efforts won't succeed unless Congress lends its support.
Thanks to legislation known as "Trade Promotion Authority," Congress — not the executive branch — has the power to approve trade deals and demand better IP enforcement. In fact, TPA specifically outlines Congress' imperative "to secure fair, equitable, and nondiscriminatory market access opportunities for United States persons that rely upon intellectual property protection."
For starters, Congress could strengthen its enforcement of the existing U.S.-Korea Free Trade Agreement. KORUS, as it's known, has removed many trade barriers since it went into effect in 2012. Yet significant enforcement gaps remain — particularly ones regarding digital products.
Cross-border data flow restrictions are a prime example. These policies primarily impact digital products and services businesses. And according to USTR, Korea is the only country to impose such restrictions. Working to lift these barriers would provide new market opportunities for American businesses.
The forthcoming U.S.-U.K. trade deal offers another opportunity for Congress to prioritize enforcement. The United Kingdom is our closest ally — and each year, we exchange $270 billion in goods and services. Yet the nation routinely undervalues U.S. innovation, effectively blocking access to its market. A new agreement focused on high standards gives both nations the opportunity to create a model for 21st century trade.
Congress could also work to broaden our trading relationship with Japan. Last year, our two nations reached a limited, "phase one" agreement. A more comprehensive deal is needed – and soon.
The Trump administration is right to make trade enforcement a priority. It is time for Congress to use its full authority to ensure that trade agreements deliver the full benefits promised to the American people — and that means strong enforcement.
Charles Boustany is a retired physician and former congressman from Louisiana.