A bipartisan group of Senators are calling on the Biden administration to improve transparency and consultation with Congress on pending trade negotiations in light of the U.S. Trade Representatives (USTR) failure to consult with Congress while pushing an agreement to erode intellectual property rights at the World Trade Organization.
The letter was sent by Senate Finance Committee Chairman Ron Wyden (D-Ore.), Ranking Member Mike Crapo (R-Idaho), and Senators Bob Menendez (D-N.J), Charles Grassley (R-Iowa), Catherine Cortez Masto (D-Nev.), and Ben Sasse (R-Neb.).
As the letter notes, it is the USTR’s duty to consult with, provide substantial briefings on negotiations to, and share all negotiating texts with Congress. Under Article I, Section 8 of the Constitution, Congress has foremost authority to regulate tariffs and commerce with foreign nations. While Congress has delegated some of this authority to the executive branch, it still requires that the executive branch consult with legislators on trade policies.
With respect to a waiver of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), the USTR has not met these standards.
The Biden administration has been backing this waiver, which is a global effort to suspend all intellectual property (IP) rights for COVID-19 innovations, a move that would do little to help end the pandemic but would undermine U.S. medical innovation, jobs, and the Constitution.
As the letter asserts, the USTR has side-stepped Congress in several ways during the negotiation process:
“For example, USTR recently announced that a “compromise outcome” was reached with the European Union, India, and South Africa with respect to a waiver of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) that offers a path to a broader agreement with the 164 members of the WTO. USTR’s announcement of the outcome preceded its informing Congress of the specifics of the compromise or sharing text of the proposal. USTR has committed in the Guidelines to share both text of U.S. proposals and consolidated text with Members of Congress and their cleared staff during negotiations. Importantly, USTR has shared — as it should — text for other trade proposals at the WTO and elsewhere with relevant Congressional committees in the past. There is no reason to have broken with that tradition here. USTR should promptly provide any new U.S. proposals or consolidated text to Congress.”
It is especially important that the USTR consult Congress on these matters, as there is robust and clear opposition within Congress to this plan. This is for good reason.
The plan to suspend IP rights for COVID-19 innovations, like vaccines, would undermine U.S. medical innovation, jobs, and the Constitution.
Strong IP protections have facilitated the very creation of several highly effective COVID-19 vaccines at a record pace. The Biden Administration’s decision to support an IP waiver for COVID-19 innovations would create a precedent that IP rights can easily be waived or undermined when government bureaucrats find it convenient.
IP rights are explicitly protected in the Constitution. The Founding Fathers recognized the importance of intellectual property rights in Article 1, Section 8 of the Constitution: “To promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Strong IP rights are vital because they turn new ideas into tangible goods and services that improve the quality of life for Americans by creating high-paying jobs and increasing economic growth.
Without IP rights, medical innovators will have no incentive to create new treatments and cures as they will have no way to recoup the investments they made in developing new medicines. Patent exclusivity for medicines has been deliberately legislated to ensure that creativity, innovation, and medical growth are protected.
Because of strong IP protections, the U.S. is a world leader when it comes to medical innovation. According to research by the Galen Institute, 290 new medical substances were launched worldwide between 2011 and 2018. The U.S. had access to 90 percent of these cures, a rate far greater than comparable foreign countries. By comparison, the United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.
Strong IP for medicines supports millions of American jobs. Nationwide, the pharmaceutical industry directly or indirectly accounts for over four million jobs across the U.S and in every state, according to research by TEconomy Partners, LLC. This includes 800,000 direct jobs, 1.4 million indirect jobs, and 1.8 million induced jobs, which include retail and service jobs that are supported by spending from pharmaceutical workers and suppliers. The average annual wage of a pharmaceutical worker in 2017 was $126,587, which is more than double the average private sector wage of $60,000.
If the Biden Administration refuses to reverse its problematic position, it should at least be transparent about its negotiations and provide necessary information to Congress, as is their duty. ATR applauds the bipartisan group of Senators for urging that the Administration be transparent and live up to their constitutional obligations.