Congressional Hostility To Trade Is A Risky Business

By Carlos Gutierrez

Investor's Business Daily

Two billion people in the Asia-Pacific region have reached the middle class. By 2020, another 1.2 billion will join them. No wonder U.S. businesses are increasingly looking across the Pacific in search of growth.

Unfortunately, Congress is undermining their efforts. Several lawmakers are opposing the Obama administration's push to conclude negotiations on the Trans-Pacific Trade Partnership (TPP), which would remove economic barriers between the U.S. and 11 other nations.

In addition, Congress has not yet passed Trade Promotion Authority (TPA), which would give the president the authority to sign a trade agreement and provide Congress an up-or-down vote. TPA is critical to ensuring America is moving forward on trade agreements — and not falling behind other nations.

This congressional intransigence on trade could deprive American business of billions of dollars' worth of economic opportunity — and put them at a competitive disadvantage with foreign firms whose political leaders are aggressively advancing free-trade deals of their own.

Opposition to the TPP by members of Congress or anybody else makes no sense. The economic rewards would be enormous. Officials estimate that the deal could generate an additional $123.5 billion in U.S. exports by 2025 and 700,000 new American jobs.

That's because the 12 TPP countries are economic powerhouses, accounting for 40% of the world's GDP. Over the next five years, almost half of the world's $21.6 trillion in projected economic growth will come from Asia.

Pacific leaders are trying to capitalize on those growth prospects by striking free-trade agreements among themselves. China is pressing to conclude a trade deal with Australia. It's already done so with New Zealand. And China just announced that it would seek a free-trade agreement among the 21 members of the Asia Pacific Economic Cooperation organization.

Canada is working on a trade agreement with Japan. Australia and Japan just finalized their own bilateral trade agreement. Other nations — and our competitors — are not waiting for the United States to move on TPP or on anything else. The U.S. risks falling behind.

Further, inaction on TPP puts American intellectual property (IP) and innovation at risk. U.S. negotiators have reportedly been working hard to obtain explicit guarantees in the TPP agreement to safeguard innovative works in the international marketplace.

In doing so, they have been building on the IP enforcement provisions of previous free-trade agreements, like the one between South Korea and the U.S. that took effect in 2012.

These protections are crucial. Intellectual property drives our economy. The inventions, designs, symbols and creative works that underpin countless goods and services generate $5 trillion in activity every year, accounting for 60% of America's merchandise exports. Those trillions in economic activity support no fewer than 40 million American jobs.

Without adequate enforcement of the patents, copyrights and trademarks that protect creative works from infringement or outright theft overseas, the jobs and economic activity that IP supports will be threatened.

To see how, consider medicine. Creating a new drug can take up to 15 years and cost more than $1 billion. Firms and investors need assurance that they'll be able to recoup their capital if they develop a groundbreaking therapy.

The exclusive period of sales guaranteed by a patent — and in the case of innovative biologic medicines, the 12 years of control over data granted by U.S. law — provide that assurance. By codifying such rules internationally, the TPP would safeguard and incentivize innovation.

Respect for IP also protects the value of American brands abroad. I've seen that value first-hand, from my earliest days selling cereal for Kellogg in Mexico to my time representing American business on the international stage as U.S. secretary of commerce.

IP enforcement doesn't just spur innovation and creativity; it also helps protect consumers.

Consider the potential impact of counterfeits. Between 2005 and 2008, the number of counterfeit electronics entering the U.S. military's supply chain more than doubled. Just one malfunctioning device can be the difference between life and death for our troops. Legal protections for IP let countries go after criminals peddling dangerous or unsafe goods.

Finally, intellectual property protections inject a moral backbone into the politics of trade — sending the message that stealing is stealing, whether it's a person's wallet or an illegal music download. Without protections for IP, trade can exploit the very people whose inventions are benefiting others around the world.

The Trans-Pacific Partnership is poised to connect American businesses with billions of new customers — and improve the economic prospects of both in the process.

Please see full op-ed online at: http://news.investors.com/ibd-editorials-perspective/062314-705842-congress-needs-to-pass-trade-promotion-authority.htm?p=full