Strategic Protection of Vital US Assets Abroad: Intellectual Property Protection in the Trans-Pacific

241 Pages·2014·2.87 MB·English

Strategic Protection of Vital U.S. Assets Abroad: Intellectual Property Protection in the
Trans-Pacific Partnership

A thesis submitted to the
Graduate School
of the University of Cincinnati
in partial fulfillment of the
requirements for the degree of

Master of Arts

in the Department of Political Science
of the College of Arts and Sciences

by

Kyla Dahlquist
B.A. University of Cincinnati
B.A. University of Cincinnati
June 2012

Committee Chair: T.G. Moore, Ph.D.
Abstract

In 2012, the United States Trade Representative (USTR) submitted a high-
standards intellectual property (IP) provision to the Trans-Pacific Partnership (TPP)
negotiation forum. Indications that this provision is incredibly aggressive were seemingly
confirmed by a series of draft leaks on the Internet, leading to overwhelmingly negative
assessments of the USTR and the U.S. trade agenda in the Asia-Pacific. However, these
scholars and analysts have not adequately addressed the strategic element of the U.S.
trade agenda regarding intellectual property. Arguments have been made regarding the
strategic importance of the TPP negotiations, as a whole, to the U.S.: economically,
politically, and even militarily. I will argue that the U.S. trade agenda regarding
intellectual property in the Asia-Pacific region, specifically, is not counter to these
strategic interests. Examining the reasoning behind this policy is the primary objective of
this comparative analysis of the perceived intellectual property protections of TPP states.
One of the primary, overarching purposes of this examination is to contribute to
the discussion of intellectual property as an all-encompassing security issue. I propose
that promoting the effective enforcement and implementation of intellectual property
protections within other countries provides the United States with a mechanism for
countering the unilaterally insurmountable security issues of the twenty-first century,
including cyber-espionage and forced technology transfer.
I will argue that it is the long-term external effects that provide the most
persuasive explanation for U.S. behavior in the Trans-Pacific Partnership negotiations.
The United States is still proceeding in a strategic manner, establishing long-term
mechanisms for the protection of U.S. interests abroad through bilateral and small-scale
trans-regional agreements with limited membership rather than global international
institutions in an effort to hedge against the rising power in Asia: China.
I have conducted a descriptive, exploratory analysis of the U.S. perception of the
intellectual property protections provided in trade partner states. I have defined these
protections according to the legal infrastructure and the enforcement capacity of that
trade partner. In addition to China, four TPP negotiation members have been selected as
case studies for this analysis based upon their Special 301 designations from 2001 to
2014: Canada, Chile, Peru, and Vietnam.

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Table of Contents
Title Page
Abstract
Table of Contents
List of Tables and Figures
Abbreviations
I. Introduction 9
II. Research Objective and Hypotheses 12
A. Research Objective 13
B. Research Questions and Hypotheses 13
C. Caveats and Contextualization 15
III. Background 17
A. Defining the Concept: Intellectual Property 18
B. The Internationalization of IP Law: The Multilateral Approach 23
C. The Internationalization of IP Law: Moving Away from Multilateralism? 29
i. U.S. Unilateralism 30
ii. U.S. Bilateralism and Plurilateralism 31
iii. The Trans-Pacific Partnership Agreement 36
a. The Trans-Pacific Partnership: What Is It? 36
b. The Trans-Pacific Partnership: Perspectives 37
1. Human Rights 37
2. Institutional Undercutting 40
3. Inconsistency 41
4. Back-Door Politics 42
5. Introducing a Balanced Analysis of the Unknown 43
IV. Theoretical Foundation 46
A. Power and Transformations 47
B. International Political Economy and International Relations Theory 52
i. State-centricity 53
ii. Security 54
a. Defining “Security” 55
b. The Security in the Protection of Intellectual Property 57
C. International Relations Theory and the Rise of China 60
V. Methodological Approach 67
A. Methods 67
B. Case Selection 68
C. Data 70
i. Sources of Data 71
ii. Coding and Interpreting the Data 72
a. Enforcement Capacity Issues (ECI) 73
b. Lacking Legal Infrastructure (LLI) 75
VI. Case Profiles 76
A. Canada 76
i. The U.S.-Canada Relationship 76
ii. Perceived IP Protection Issues 79
B. Chile 84

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i. The U.S.-Chile Relationship 85
ii. Perceived IP Protection Issues 86
C. Peru 91
i. The U.S.-Peru Relationship 91
ii. Perceived IP Protection Issues 93
D. Vietnam 96
i. The U.S.-Vietnam Relationship 96
ii. Perceived Intellectual Property Protection Issues 98
E. China 102
i. The U.S.-China Relationship 103
ii. Perceived Intellectual Property Protection Issues 104
VII. Comparison and Results 115
VII. Conclusions and Possibilities for Further Research 118
Bibliography 121
Appendices 147
Appendix 1. Special 301 Designation Charts 147
Appendix 2. Perceived Intellectual Property Protection Issues Scoring 155
Appendix 2.1. Perceived Intellectual Property Issues—Canada 155
Appendix 2.2. Perceived Intellectual Property Issues—Chile 169
Appendix 2.3. Perceived Intellectual Property Issues—China 183
Appendix 2.4. Perceived Intellectual Property Issues—Peru 211
Appendix 2.5. Perceived Intellectual Property Issues—Vietnam 225
Appendix 3. International Legal Framework 239

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Tables and Figures
Tables Page
Table 1. Canada: Perceived IP Protection Issues, 2001-2014 83
Table 2. Chile: Perceived IP Protection Issues, 2001-2014 89
Table 3. Peru: Perceived IP Protection Issues, 2001-2014 95
Table 4. Vietnam: Perceived IP Protection Issues, 2001-2014 100
Table 5. China: Perceived IP Protection Issues, 2001-2014 111

Figures Page
Figure 1. Special 301 Designations: Average, 2001-2014 68
Figure 2. Special 301 Designations: Comparison of Averages 71
Figure 3. U.S. Exports & Imports—Canada, 2001-2013 77
Figure 4. U.S. Balance of Payments—Canada, 2001-2013 77
Figure 5. Canada: Perceived IP Protection Issues, 2001-2014 79
Figure 6. Canada: ECI and LLI Scores, 2001-2014 81
Figure 7. U.S. Exports & Imports—Chile, 2001-2013 85
Figure 8. U.S. Balance of Payments—Chile, 2001-2013 85
Figure 9. Chile: Perceived IP Protection Issues, 2001-2014 87
Figure 10. Chile: ECI and LLI Scores, 2001-2014 88
Figure 11. U.S. Exports & Imports—Peru, 2001-2013 92
Figure 12. U.S. Balance of Payments—Peru, 2001-2013 92
Figure 13. Peru: Perceived IP Protection Issues, 2001-2014 93
Figure 14. Peru: ECI and LLI Scores, 2001-2014 94
Figure 15. U.S. Exports & Imports—Vietnam, 2001-2013 97
Figure 16. U.S. Balance of Payments—Vietnam, 2001-2013 97
Figure 17. Vietnam: Perceived IP Protection Issues, 2001-2014 98
Figure 18. Vietnam: ECI and LLI Scores, 2001-2014 99
Figure 19. U.S. Exports & Imports—China, 2001-2013 103
Figure 20. U.S. Balance of Payments—China, 2001-2013 103
Figure 21. China: Perceived IP Protection Issues, 2001-2014 105
Figure 22. China: ECI and LLI Scores, 2001-2014 109

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Abbreviations

ACTA Anti-Counterfeiting Trade Agreement
AI Amnesty International
ASEAN Association of Southeast Asian Nations
AUSFTA Australia-U.S. Free Trade Agreement
BIT bilateral investment treaty
DMCA U.S. Digital Millennium Copyright Act
ECI enforcement capacity issues
EU European Union
FoD Friends of Development
FTA free trade agreement
GATT General Agreement on Tariffs and Trade
GIPC U.S. Chamber of Commerce Global Intellectual Property Center
IP intellectual property
IPRs intellectual property rights
KORUS Korea-U.S. Free Trade Agreement
LLI lacking legal infrastructure
MFN most-favored nation principle
MNC multi-national corporation
NAFTA North American Free Trade Agreement
NGO non-governmental organizations
NTB non-tariff barrier
PhRMA Pharmaceutical Research and Manufacturers of America
PTA preferential trade agreement
R&D research and development
SOPA U.S. Stop Online Piracy Act
TPP Trans-Pacific Partnership
TPSEP Trans-Pacific Strategic Economic Partnership
TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights
USPTO U.S. Patent and Trademark Office
USSFTA U.S.-Singapore Free Trade Agreement
USTR U.S. Trade Representative
WIPO World Intellectual Property Organization
WTO World Trade Organization

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“… the State Department today is very clear that economic policy is
foreign policy and foreign policy is economic policy. And all of our
people – the people of China, the people of the United States, really the
people of the world – are looking for their fair opportunities… We are
in the middle of negotiating now a bilateral investment treaty… We
want to have an intellectual/technology trade agreement. We need to
make sure we’re protecting intellectual property rights; make sure
we’re creating transparency in the regulatory process; make sure that
we are raising the bar for everybody in a sense, in terms of the
standards by which we do business.” – U.S. Secretary of State John
Kerry, Addressing a CEO Roundtable Discussion in Beijing, China,
July 2014

I. Introduction
In the United States, individuals identify social status by the intellectual property
they wear, drive, read, hear, and even eat, though very few people think of it in such
terms. “These days, for example, one can not even eat a simple breakfast without
immersing oneself in intellectual property.” Law Professor William P. Alford quipped
during a 1994 speech. “Or, at least, so I am regularly reminded, as I pour what I fear may
be genetically enhanced milk over my trademarked bananas and flakes made of hybrid
corn and sold in trademarked packages covered with copyrighted advertising blather.”1
Despite the lack of general recognition of its importance, intellectual property is arguably
one of the most essential assets for the future prosperity and economic welfare of the
United States.
Recognizing the centrality of intellectual property to the economy, the United
States government has placed the issue high on the trade agenda for the last several
decades. Indeed, the U.S. has developed numerous tools to promote greater global
intellectual property standardization over the last 25 to 30 years. From the standard-

1 Ibid., 12.
2 In the context of this analysis, ‘Multilateral’ and ‘Multilateralism’ refer to the inclusive systemic-level
deliberation and agreement upon issues affecting the way that states interact in the international system.

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standard setting multilateral2 TRIPS agreement to bilateral3 TRIPS-plus harmonization
agreements such as the Korea-U.S. Free Trade Agreement (KORUS FTA), negotiations
regarding intellectual property have continued along a trajectory toward greater
harmonization of internal policies between states. As harmonization becomes more acute,
smaller forums of like-minded states have become more necessary to gain consensus on
trading issues. The United States uses bilateral and plurilateral4 forums to promote its
trading interests, carefully assessing the issues that need redress in other states. In order
to do so effectively, the United States maintains a number of unilateral5 mechanisms for
reviewing potentially damaging practices in foreign countries. These unilateral policies,
however, are more than just review mechanisms: they have teeth of their own.
In the late 1980s, the United States created a mechanism that would allow the
Office of the United States Trade Representative (USTR) to (1) unilaterally review the
trade practices of each of its trading partners, (2) report issues that could impede the
access or value of U.S. goods and services within a given state, and (3) apply
enforcement measures as necessary. At that time, the supporting congressional members
believed that the trade deficit with Japan and other states could be rectified if those states

2 In the context of this analysis, ‘Multilateral’ and ‘Multilateralism’ refer to the inclusive systemic-level
deliberation and agreement upon issues affecting the way that states interact in the international system.
Examples include TRIPS, GATT/WTO, the United Nations, etc. Disambiguation: Unilateralism,
Plurilateralism, Multilateralism.
3 ‘Bilateral’ and ‘Bilateralism’, in this analysis, refer to joint policies negotiated and adopted by two states.
Disambiguation: Unilateralism, Plurilateralism, Multilateralism.
4 In this analysis, ‘Plurilateral’ and ‘Plurilateralism’ refer to negotiation within a forum of three or more
states or actors regarding issues that affect those negotiating parties. Regional trade agreements are
plurilateral agreements. Examples include, the ACTA, ASEAN, APEC, etc. The WTO defines plurilateral
agreements as minority interest agreements among several states that seek greater liberalization. See, World
Trade Organization, “Understanding the WTO: The Agreements – Plurilaterals: of minority interest.”
Disambiguation: Unilateralism, Plurilateralism, Multilateralism.
5 In this analysis, ‘unilateral’ and ‘unilateralism’ refer to the practice of determining the policies that affect
other states exclusively within one state. The term also refers to the enforcement of policies that have been
determined on the bilateral, plurilateral or multilateral scale without appropriate utilization of international
dispute resolution mechanisms. Disambiguation: Unilateralism, Plurilateralism, Multilateralism.

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