Trade agreements and the hypocrisy of 'free' market advocates

| December 10, 2012
Trade agreements and the hypocrisy of 'free' market advocates

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Many critics and most apologists focus on how "free" trade agreements are opening the economy up to the competitive market. Survival of the fittest in the marketplace is what corporations are supposed to desire.

This story is only partly true. Corporations want selective competition -- competition for others, but not for themselves.

The Comprehensive Economic and Trade Agreement the Conservatives hope to conclude with the European Union in coming weeks will strengthen Canadian patent provisions. Essentially a law that gives a monopoly for a set period of time to a corporation (or individual) with enough resources (or creativity) to "invent" something, a patent becomes a legal piece of property that can be bought, sold or traded.

The Canadian Press has reported that, as part of the CETA negotiations, the Harper government has agreed to give patent holders the ability to appeal overturned patents, increase patent data protection terms by two years and grant patent term restoration to compensate patent holders for any time lost during the approval process. According to the government's own figures, these changes will increase Canadian pharmaceutical costs by between $367 million and $903 million a year.

Another study suggests the costs could be much higher.

CETA isn't the only so-called "free trade" agreement where anti-competitive monopolies reign. In the ongoing negotiations over the Trans-Pacific Partnership, which Canada joined last month, the U.S. is lobbying for significantly increased patent protections. In 2000, Ottawa succumbed to a World Trade Organization decision that banned the stockpiling of generic drugs in anticipation of the end of a patent.

Skyrocketing drug costs that have harmed Canadian health care are the result.

Increasing patent protection was also part of Canada's first free trade agreement. Washington pressed Ottawa for patent-law reform when the two countries negotiated a free-trade agreement in the mid-1980s. With a nudge from the Reagan administration, Brian Mulroney's government increased patent protection from 17 to 20 years prior to signing the Canada-U.S. free trade agreement. The 1994 North American Free Trade Agreement, which extended the Canada-U.S. accord to Mexico, codified a wide swath of intellectual property provisions.

During the past 25 years of "free" market reforms, the number of patents issued per year in North America has more than tripled. With patents ever more important to big corporations, there's been heavy pressure to extend Canada's intellectual property system. In recent months various companies have called on the House of Commons Committee on Industry, Science and Technology to extend patent protections.

These calls are justified on the grounds that patents promote innovation, but they are increasingly an obstacle to technological advancement. More and more companies patent initiatives not with the aim of using the inventions, but rather to deter new innovators from entering their field or to make money from licensing agreements. In a sign of growing uneasy over the issue, the U.S. Federal Trade Commission has complained about companies that act as "patent assertion entities," buying or using patents to assert them against parties that have often invented, produced and marketed the technology independently.

In July, the St. Louis Federal Reserve released a study titled the Case Against Patents. It explained: "in spite of the enormous increase in the number of patents and in the strength of their legal protection we have neither seen a dramatic acceleration in the rate of technological progress nor a major increase in the levels of R&D expenditure."

The hypocrisy of "free" market advocates is astounding. While proponents of "free" trade trumpet increased competition as a means of spurring economic advancement, they regularly undermine free markets by increasing monopolies through strengthened patent protection.

 

Dave Coles is president, Communications, Energy and Paperworkers Union of Canada.

 

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