acta rodrik trilemma

February 9th 2012 - POLI 417: IPE - Trade
The New Trade Requirement: United States Exported Copyright Protection


There is a new trade requirement now if you are looking to do business with the
United States. One that has historically never been a trade concern, that of anti-
counterfeiting and copyright protection. Increasingly the prospect of increased free trade
with the worlds largest market is coming with more strings attached. The most visual of
these is the Anti-Counterfeiting Trade Agreement (ACTA), which is a plurilateral trade
agreement with the auspices of creating world-wide standards in legal frameworks for
dealing with counterfeit goods, patented medicines, and Internet copyright infringement. It is
being conducted and led by the US externally of traditional trade bodies such as the World
Trade Organization (WTO), the World Intellectual Trade Organization (WITO), and the
United Nations (UN). As of January 2012 there were a total of 31 signatories, including the
22 members of the European Union (EU), Japan, South Korea, Australia, Singapore,
Morocco, Switzerland, New Zealand, Canada and of course the United States. The treaty is
now only gaining prominence with the public of respective signatories as it had originally
been negotiated in secret, away from any sort of democratic debate in domestic legislatures
or public forums. The recent controversy over the Stop Online Piracy Act (SOPA) and the
Protect IP Act (PIPA) in the United States during January of 2012 also raised awareness of
ACTA as it would have similar effects on creating a stricter Internet with regards to
copyright and piracy issues. The ACTA treaty would require nations to meet lofty US
requirements on intellectual property protection, the harshest in the world in the world. In
essence, exported intellectual property protection. How did the entire process even begin,
especially in secret?

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The premise of Rodrik's Trilemma seems apt to describe the situation that is taking
place currently. The theory goes that states have an option of two of the three following
desirable options. First, an integrated national economy that is open to free trade on the
premise of utilizing one's comparative advantages. Second, the maintenance of a cohesive
nation state that is autonomous and independent. Third, the ability of voters and other
mobilized groups to submit their leaders to their own policy preferences through mass
politics. Theoretically, the choice of the first two will co-opt the ability to conduct any
meaningful exercise of the third. The majority of the world's nations, save a few autarkic
and mostly pure Communist states, have chosen the first. The second choice for many,
perhaps with the exclusion of the EU to more of a degree than others, has been the
maintenance of the nation state. The first two diminish the ability of the exercise of the third
choice, that of mass politics and voter choice. Essentially, leaders hands are tied by the fact
they have chosen an integrated economy whilst wanting to maintain autonomy of a nation
state and ability to sign onto trade agreements without domestic interference. This results in
the populous of a country experiencing a democratic deficit in areas such as trade policy.
The populous must submit to the vagaries that integrated markets pose, as well as the actions
of powerful trading nations, such as the US, who can use their market power to force
unilateral conditions for the continuance of free trade with access their large and desirable
markets.
At face value the proposed goals of ACTA may not seem insidious. One would be
hard pressed to argue against the need to protect intellectual property that is often exploited
in developing markets, thus leading to losses for those who made an investment in a new
idea or technology. Politicians in the US may have legitimate terms of trade concerns in this
area. This is most likely true in regards to protections against counterfeiting and

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pharmaceutical patents. However, as one delves deeper into the details of the ACTA treaty;
how it proposes regulation of the Internet; how the treaty has been negotiated in secret away
from democratic debate; and how it is being forced upon countries as a condition for free
trade with the US, suddenly its qualifications become much more dubious and has rightfully
come under intense public scrutiny. As Rodrik's Dilemma shows, with integrated economies
and nation states, direct democracy over trade policy invariably suffers, and has resulted in
closed doors secretive treaty process. It is safe to say that most country's populations would
reject ACTA if they knew its full contents and it was put to a referendum in each. Protests
have taken place in Poland within the last few weeks; there has been the resignation of the
European Parliament's rapporteur, Kader Arif, over the issue; and Slovenia's Ambassador to
Japan, Helena Drnovsek-Zorko, has regretted her decision in signing it. The concern of
critics is that members would be forced to police the Internet in such as way that media
corporations or governments, under the guise of copyright infringement, could stifle free
speech and freedom of expression. The need to heavily monitor the Internet through
intrusive means would likely lead to less personal privacy and potential infringement of civil
liberties. For these reasons, every nation considering ratifying ACTA, including Canada,
should be rightfully worried about the collateral fall out on their populations. The ultimate
questions that remain in regards to this and any similar legislation are, `is the potential loss
of civil liberties worth the potential reduction in counterfeiting and copyright infringement
but with continued trade with the US?' and `should it be permissible for the US to tie anti-
counterfeiting and copyright protection to free trade as this has never been done before in
the past?' Rodrik's Trilemma may produce the constraint that many nations sign ACTA
against the clear preference of their populations so as to not disrupt trade flows. Only time
will tell the end result, however time is ticking fast towards full ratification of the treaty.

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