TPP: The battle for the IP chapter


David Farrar

While the TPP text was (and is) secret, stakeholders could gain information on proceedings by engaging with the process. Many met with Trade Minister Tim Groser

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This will be a long blog post but an important one. It is about the TPP, the IP chapter, and how a group of New Zealand organisations actually managed to help beat back the US government and the corporates they were fighting for.

First, I want to talk about critics of the TPP, and how you can divide them into three categories. They are:

1. Opponents of all trade deals
There are some people who are opposed to all trade deals. They have a honest belief that either trade deals are bad, or trade is bad. A couple of examples are Professor Jane Kelsey and the Greens.

Prof Kelsey has opposed (as far as I can tell) every trade deal New Zealand has ever signed up to. It doesn’t matter what the details are – she has campaigned against it. She has a world view that is basically protectionism is economically good, and no amount of evidence will sway her views.

Prof Kelsey has every right to her views (though I do grumble that she seems to spend a large proportion of her time as a taxpayer-funded academic running campaigns) but the reality is that she will never influence the details of a trade detail, because people know that nothing they agree to will ever stop her being a critic. She can make a deal more unpopular with voters but no one in government ever asks the question “Will this satisfy the demands of Jane Kelsey.”

I’m not trying to personalise it on Prof Kelsey. There are many others like her, who are against petty much all trade deals.

The Greens have voted against against (I think) every trade agreement. Their opposition seems to be more because of their belief that trade harms the environment, and we should grow and produce everything we need locally. So again, no one ever asks what is needed to get the Greens do support a trade deal – it is basically impossible.

2. Opponents because of who the government is
This is basically the Labour Party, and some of their supporters. If Labour were in government I have no doubt the TPP would look very similar to what was announced this week, and it would be signing up to it. They are not opposed to the TPP (well, not most of its caucus) but, because National is in government, they just see it as a weapon to attack with. Just like the flag referendum.

I don’t mind oppositions attacking governments for things they honestly disagree on – for example labour laws and the like. But it does get tiring when you know their opposition is only because they are not in government themselves. It is worth remembering the TPP started under Labour. It also did a great trade deal with China, which has been hugely beneficial. If it were National that had done the trade deal with China, I suspect Labour would be condemning it.

So in the end these opponents do not get much traction either, because their opposition is more about who the government is, than what is in the TPP. That doesn’t mean their criticism do not have validity, just that their motivations are more about bashing the government.

3. Opponents of some proposed details
The last category is what I want to focus on. It is individual and groups who have been critical of what might be in the TPP, because they think certain aspects would be bad for their area of interest if included.

These opponents are not against the TPP regardless of what is in it. They’re not for it either. They’re people saying “We don’t want X in there” but if X is not there, "then we don’t have a view on it."

That might be a health group on keeping the Pharmac model, or ICT groups on the details of the e-commerce and intellectual property chapters. The latter is what I want to focus on, and tell a story about the battle here.

The US wish list on intellectual property
The first post I can find I did on the TPP was about how despite being a big supporter of free trade, I was concerned about the US wishlist in TPP. I quoted Rick Shera on how it could affect us:

•    Rights holders would be allowed to prevent parallel imports;

•    Massive extension of copyright terms, from life of author plus 50 years, to 70 years;

•    Circumventing a Technological Protection Measure (TPM) will be a criminal offence even if the work it protects is in the public domain or you want to exercise fair dealing rights like educational use or current affairs reporting;

•    The return of guilt upon accusation three strikes internet termination laws;

•    Forcing us to reverse the decision recently taken to exclude software from being patentable;

•    Introducing statutory damages (which give rights holders windfall damages up to three times their actual losses);

•     ISP policing of IP rights including a requirement for ISPs to give up their customers’ identities when they receive a mere allegation from a rights holder;

•    Criminal liability even where the infringement has no commercial value at all; and

•    Pushing Courts to impose imprisonment as the default sentence for infringement even where no monetary benefit is obtained.

These provisions would have been truly horrible, if they had been agreed to. The good thing is that with the exception of the extension of the term (which is more a copyright than internet issue) the US got beaten back on pretty much all of this. I’m not saying the IP chapter is great (there are still a couple of areas of concern which we need to see the detail on) but this truly horrible stuff is not in there – software is not patentable still, parallel importing remains legal, you can circumvent TPMs for legal purposes, ISPs don’t face extra liability, no changes to our three-strikes law for filesharing infringing (which rights holders don’t like).

So why did the US not get its way on much in this chapter? Is it because it was an unimportant chapter? No, far from it. For several years it has been said that the IP chapter will be one of the most difficult. Many in the media thought the big battle was Pharmac but in reality that was never at great risk. The PM and others had often said that the IP chapter was one of the big challenges.

This was a concern, as those of us against the US demands, were worried that the IP chapter would be traded at the last moment with the US, to gain a better deal elsewhere. We wanted to stop that happening, and make the price of compromising on the IP chapter too high, so what did we do.

By we, I mean groups such as InternetNZ, IITP, TUANZ and NZ Rise. I don’t speak for any of them, this is just my views as someone who was involved.

Set the tone right
It was important that we were not seen as just against TPP regardless. We were against an IP chapter that was bad for New Zealand. While we would work with other critics such as Prof Kelsey (and inform them of our concerns), it was vital not to be seen as anti-TPP regardless. You lose influence if you do that.

We also tried to have it about ICT and internet industries being important for New Zealand’s future, so don’t trade away their interests for those of commodity industries.

Be specific
Another key was not just to rant about secret negotiations (even though criticism of the process was made), selling out sovereignty, attacking Hollywood corporations. It was to be specific as to what measures were opposed, the impact on New Zealand of them, and putting up alternative provisions.

Meet NZ negotiators
Many meetings were arranged with negotiators with MFAT and MBIE. And they were extremely professional, and useful. The negotiators do not set policy (ministers do), but they will tell you what their position is, listen to your concerns, and make sure they understand them.

They would also share information on the negotiations. They are not allowed to sit down with you and show you a copy of the proposed texts (unless every negotiating country agreed). But they could tell you in some detail what the issues are, and what the New Zealand government position currently was. And thanks to texts being leaked on Wikileaks, we actually got verified that the New Zealand negotiators were advocating exactly what they told us they were, and resisting the US demands.

They also were useful in giving us some idea of which countries were with us on these issues, and which were not, and which were yet to take a position. Again, not in exact detail which would breach confidentiality but some useful steers.

The key here is that while the exact negotiating texts were secret, stakeholders could gain information on proceedings by engaging with the process – and not just corporates but civil society groups also. Engaging with the process works, rather than just shouting slogans.

Also at least one meeting was held (possibly more) with Trade Negotiations Minister Tim Groser. I did not attend but understand he was up to speed with the issues around the IP chapter. Meetings were also held with the ICT minister, so she could be a voice for the industry if the cabinet discussed details.

It also became apparent to me that other ministers, up to and including the prime minister, were aware of the issues around the internet and the IP chapter. In fact as I said earlier, the prime minister said fairly early on that the IP chapter might be the toughest.

Meet TPP supporters
We met supporters of the TPP such as NZ International Business Forum (Stephen Jacobi). We explained that our potential opposition was issues based. If certain provisions were in the TPP, we would be opposing and criticising it. But if they were not there, then mostly we would have no view.

We know that most business groups would support the TPP, regardless of the IP chapter. What we wanted to get across, was that if they could use their influence to get an IP chapter that was more palatable to us, then there would be less domestic opposition.

The meetings were cordial and useful.

I can’t recall exactly other meetings we had but off memory there was some dialogue also with the US Embassy and Federated Farmers.

Attend the negotiations
Staff were sent to some of the international negotiations rounds. Why, if you are not allowed in the negotiating room? Well, a lot happens in the side events and public forums. You can set up stands handing out information on your views, you can chat to New Zealand negotiators, you can get to meet the negotiators from other countries, and also develop links with other third party groups who share your concerns.

The staffer who attended some of these for the New Zealand group did an excellent job in building networks, organising events and getting our message across. It was an excellent investment in sending her.

Build a coalition locally
A local coalition was set up – called the Fair Deal coalition. It was set up to critique and oppose the US demands but also to put pressure on the NZ government to stick to its position. We wanted to make any backing down politically painful. A quote from the site is:

The US wants copyright standards that would force change to New Zealand’s copyright laws. We want you to know more about what’s at stake so that you can have a say now, before the deal is done.

The good news is that we know – from another leaked document – that the NZ copyright team went into TPP talks looking for fair copyright (and other intellectual property) standards. Now is the time to stand behind our team and  support a Fair Deal for New Zealand.

NZ members were InternetNZ, NZ Rise, Creative Freedom Foundation, Blind Foundation, Tuanz, Consumer, IITP, Trade Me, NZ Open Source Society, LIANZA, Tech Liberty and Scoop.

The tone wasn’t to attack the government, but to pressure the government to stand firm.

Build a coalition globally
At the beginning of the negotiations, New Zealand was quite exposed. The US was pushing hard for its wishlist, New Zealand was the most staunch against and we had few allies. Many were not focused on it much and Australia even seemed to be backing the US.

The New Zealand negotiators made it pretty clear that if we are alone there, then we need to compromise more. So we went about building a wider coalition.

Through attendance at the actual meetings, links were made to other groups in the countries negotiating the TPP. An alliance was formed with Public Citizen, Open Media, Australian Digital Alliance, Consumers International, EFF etc. Gradually more and more countries came to siding with the New Zealand position.

Note I am not suggesting this is solely or even mainly due to the work of the alliance but I do believe it did have an impact.

Also crucially, we tried to soften the US position. Its position was reflecting the demands of Hollywood associated creative industries. In fact many of the staff in the IP area of the trade team, had worked for lobby groups there. But then big US IT companies started lobbying, saying they did not support some of the US position. This helped weaken the US stance, as it was no longer unambiguous what US businesses wanted.

Host the negotiations
Auckland hosted the 15th round of negotiations in December 2012. This was great as it gave us a great opportunity to interact. There were a number of initiatives as part of that but the most significant was we hosted a lunch for all the IP negotiators from all the countries. I think they all had someone attend and, most importantly, the US did.

Over the lunch a few of us spoke, on various aspects and outlined what our issues and concerns were. My role was to talk about the politics, and explain how New Zealand had just had several big fights on IP law – the blackout campaign, ACTA, patent law, a new copyright act – and I doubted any government would want to be explaining why the hard-fought compromise that had been achieved was now going to be upended. I also talked about Kim Dotcom and how he is alleging John Key and Barack Obama did a deal with Hollywood to lock him up, in exchange for the TPP – and while that may be nonsense, could they imagine a New Zealand prime minister standing up and saying “We’ve decided to change our copyright and IP laws to please Hollywood.” The point was that if you demand something a government is simply politically unable to deliver, then you won’t get an agreement (like Canada on dairy – political cost too high).

And this is partly why the only major change appears to be length of copyright, rather than stuff more directly affecting the internet. And don’t get me wrong – I am against the extension but from my point of view it is less harmful than what else the US was demanding, and if we had to compromise on something – that is the lesser evil from an internet point of view.

Constructive opposition does make a difference
The point of all this, is that constructive engagement, criticism and even at times opposition can make a difference. When you work with the government and negotiators in good faith, you can have influence and get better outcomes (even if still sub-optimal) than without your involvement. You do a mixture of loud noisy activism (postcard campaigns, petitions, public meetings) and behind the scenes diplomacy – but always with a consistent principled message that we are not anti TPP (or pro TPP), just anti these provisions.

I’m actually very proud that the New Zealand ICT industry and civil society managed to run a very effective and principled campaign, that was overall remarkably successful – especially against the power of the US government and very wealthy and powerful firms in the US. One can be cynical about aspects of politics (such as the secrecy), but one can also celebrate that spending time and money on sticking up for your beliefs can work, and logical well reasoned arguments can beat vested interests.

Again, do not take any of this to suggest the ICT industry now thinks the TPP is great. I don’t speak for it, and from what I have observed views are as diverse within it, as elsewhere. Some still think it is the worst thing ever and the end of democracy, and others think it is a great deal. I personally think it is an overall positive deal and I am actually pleasantly surprised that we managed to get a deal, with most (not all) of the nasty IP provisions defanged.

But there is a lesson here for other groups, and individuals. Constructive opposition and criticism can achieve far far more, than just blanket negativity and attack.

The groups involved in the Far Deal coalition, both locally and globally, should be proud of what they managed to achieve, against formidable odds.  Also I give credit to the professional negotiators from MFat and MBIE who I think did a very good job of holding the line., against formidable odds.  Also I give credit to the professional negotiators from MFAT and MBIE who I think did a very good job of holding the line.

RAW DATA: Ministry of Foreign Affairs and Trade's summary of the Trans-Pacific Partnership (PDF here)

(Click to zoom)

Political commentator and pollster David Farrar posts at Kiwiblog.

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18 Comments & Questions

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I think honest debate is a good idea but is that what our leaders have been doing?
Why did John Key say that we have never been sued when a lot of us know that Australia is being sued over plain packaging and we are too scared of following Australia's example because we don't want to be sued.
Honesty is a great thing but the guys at the top need to be setting the example. Otherwise everyone gets fed up with the whole system and you get people voting for extreme leaders like Donald Trump because he is not an insider, because no one trusts the insiders anymore.

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Congrats to everyone who backed the Fair Deal Coalition — from the conservative David Farrar to the right-on Creative Freedom Foundation to Trade Me, Consumer, InternetNZ and Tuanz. It represented a cross section of New Zealand and worked constructively to educate politicians and moderate the TPP on IP issues. Not revolutionary or street-brawling stuff (unless you count a few virtual blows to Judge Harvey's head), but effective.

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Thanks Chris, and thanks to David for writing a well-thought out piece.

I think if we hadn't stood up to talk about the impacts those provisions would have on the New Zealand ICT sector the outcome would have been quite different.

Thanks also to NZ Rise for paying to support a group of us to travel to the Saigon round to put forth our views to the negotiating teams. It was a small but vitally important moment that helped them view the discussions through a different lens.

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Speaking of a "different lens" Paul,...

The trade "wins" achieved with the TPP are only for products that have to be shipped to somewhere before the country makes a dollar. Surely NZ's economic future is in weightless exports - selling our ideas - that derive an ongoing revenue stream from licensing them rather than a one-off goods sale?

Since the announcement was made on TPP, the negative play on copyright term extension (with a totally unsubstantiated dollar figure attached to it) has completely overlooked not only the current value of our creative sector (which includes software among the more traditional creative industries), but also the export growth potential. If we don't harness this opportunity and get the country behind it, we'll be relying on dairy etc forever.

I get that IP, and copyright in particular, is complicated. But all too often the discussion gets skewed in the wrong direction. We need to focus on what the NZ economy needs. If you look at a number of the Fair Deal members, they rely on others to create what they want to use as opposed to generating economic growth.

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Correct, These "IP free lobby" seem to think that they can set up a web site and charge for the use of it forever. But they should get to use other peoples IP creations for free!!!!
Go figure!!

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Paula, as the head of one of the Fair Deal organisations (the NZOSS), some members recognise that the secret to future NZ prosperity is *providing value to customers*. IP does not necessarily aid in that. That's why, for instance, we worked hard to block software patents in NZ. In technology, execution is everything, IP is, for the most part, pointless. A few years copyright protection would be more than sufficient. Please don't speak for us.

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>"Circumventing a Technological Protection Measure (TPM) will be a criminal offence even if the work it protects is in the public domain or you want to exercise fair dealing rights like educational use or current affairs reporting"

Was this not agreed to? I thought I read in media coverage that this clause also made it through.

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So in as much as this agreement appears to quite modestly help a small number of NZ'ers grow wealthier, the TPP is a success - Bravo! Given that "trickle down" is BS, the great majority of us will not see any benefit at all. BUT the wider Public certainly bears all the risks - that old chestnut again, thanks for the trade-off.

The BEST most of us can hope for is that the doomsday predictions don't happen and that the failure of Dairy actually means less pollution of rivers etc.

Gee - that's a pretty low bar! So by all means celebrate your success, but don't expect too many of us to slap you on the back. For most of us it don't matter a damn - fingers crossed.

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Just a bit confused by the graphic on meat exports on the end of this piece.

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Your ignorance knows no bounds.

Have we really done well out of the FTA with China? Dairy speculators maybe, and the international money lenders. As for the rest, they are up to their necks in debt and polluted waterways. The reality is this increased dairy trade would have happened anyway. When you have products there is a demand for, they purchase it where they can.

The benefits have largely gone to China. They now have our IP, some of our farms and a good chuck of our value added food business and growing. No balance here.

If you were in business yourself, you'd understand doing business with larger ones is dangerous stuff. They slow payments, start dictating turns and after that give you the option of a buy out at a reduced price or leave for some other supplier. The supermarkets already employ these tactics here.

Wake up and smell the roses. Free trade agreements should be with similar sized countries, so there is a balance to price negotiations, rather than being lap dogs to bigger businesses than yourself.

With rising government debt and reduced social services, where are the benefits David?

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Oh God nooo - poorer people than us have benefitted from trade and have subsequently become richer. I agree that this is definitely the end of the world. Lets all shut our borders and tell Johnny Foreigner that they will have to get themselves out of poverty some other way (actual poverty, not make believe "relative" poverty).

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>"The good thing is that with the exception of the extension of the term (which is more a copyright than internet issue) the US got beaten back on pretty much all of this." Does this means the ONLY IP changes the TPP will bring to the other countries is the extension from 50yrs to 70yrs?

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No there are other changes but that appears to be the major one.

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Okay but I just want to know that the things in bullet point are all, removed from the deal except the extension right? And it's for all country involved in tpp or jut New ZEALAND

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As I understand it all removed, except the TPM issue. The win for NZ is that it will not be an offence to circumvent a TPM for an authorised purpose (ie watch a DVD you have legally purchased). There will be greater penalties for circumvention though which is not for an authorised purpose.

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Removed for all countries involved in tpp right?

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Good to have some background detail which may be the start of the Governments propaganda on the deal to pre condition the public to believe the official story before the actual details are available. No intention to belittle the success of getting the deal finalized but lets not celebrate it as a win before we know the result in detail.

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You are correct that the IP chapter is the most important. It is also the most difficult to understand because of the complexities and the potential for ISD cases to change the background rules in favour of large companies.

A new book "“The Making of the TRIPS Agreement: Personal Insights from the Uruguay Round negotiations," was just launched that has implications for this brave new world of IP law.

One of the authors is Adrian Macey, author-contributor and senior associate, Victoria University of Wellington. It would be good to hear from him.

In that book one of the key points seems to be

"IP negotiations need a public policy point of view, he said, and not just represent private interests."

And getting that balance right is the hard part.

On TPP more directly the investor protection provisions are the ones that offer the most inherent danger to local economies.

According to Stiglitz

"If there were a need for better property protection, and if this private, expensive dispute-resolution mechanism were superior to a public judiciary, we should be changing the law not just for well-heeled foreign companies, but also for our own citizens and small businesses. But there has been no suggestion that this is the case."

The real risks in the IP chapter are that there are significant background changes to the way the game is played. And that is in favour of private corporations rather than the public interest.

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