USMCA is nice but no model
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Policymakers and pundits from across the political spectrum are celebrating a newly unveiled plan to pass the United States – Mexico – Canada Agreement (USMCA) on trade. U.S. Trade Representative Robert Lighthizer has even called it a model for future trade agreements. The USMCA contains many improvements over its 1994 predecessor, the North American Free Trade Agreement (NAFTA) and should be passed expeditiously. Yet while there are many positive aspects to the USMCA, the agreement is far from perfect and should not be viewed as any kind of “model” for future trade agreements.

The original USMCA struck last year contained some strong provisions on intellectual property protections—protections that should be included in any good, model trade agreement. Yet, under pressure from the most radical elements of her party, House Speaker Nancy Pelosi (D-Calif.) demanded the removal of some intellectual property protections from the USMCA and by doing so has thus rendered the agreement sub-par.

These include a provision requiring at least 10 years of data protections for biologic medicines, a provision requiring patents to be available for new uses of drugs, a provision requiring three years of data protections for clinical information submitted in connection with new uses of previously approved medicines, and a provision that links regulatory approval and patent status. Speaker Pelosi also demanded revisions that will make it more difficult for innovators to have their patent terms adjusted to account for regulatory delays.

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These revisions were purely political moves on Speaker Pelosi’s part, based on the faulty premise that intellectual property protections would raise the price of medicines in the United States. In reality, eliminating these protections from the USMCA will do nothing to help American patients afford the medicines they need or to gain access to new treatments and cures.

Indeed, the removal of intellectual property protections for medicines is likely only to dissuade scientists and inventors from developing new cures for some of the most chronic diseases and thus deny patients the innovative treatments they have come to expect from our nation’s traditionally dominant medical sector.

Without adequate intellectual property protections, the enterprise of developing new medicines quickly becomes a losing proposition, considering the time, expense, and effort involved. The USMCA in its original form actually stood to inject more money into drug research and provide a stimulus for increased medical innovation. This ultimately would have accelerated our nation’s ability to combat some of the most difficult health challenges.

By stripping the intellectual property protections from the USMCA, Pelosi is not only thwarting the efforts of our nation’s scientists and doctors to address these challenges but also helping foreign governments to freeload off American biopharmaceutical preeminence.

One of the benefits of trade agreements is that they can bring nations into alignment with one another when it comes to various domestic standards. In the case of the USMCA, Pelosi made a point- of underscoring how the agreement would help to bring Mexican labor laws and employee protections into alignment with the standards in the United States and Canada.

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This makes it particularly disappointing that the Speaker is foregoing the opportunity to encourage similar regulatory alignment across North America when it comes to intellectual property rights for pharmaceutical innovators. The intellectual property protections for medicines that existed in the original USMCA would have helped to raise standards abroad while also protecting American companies and American patients.

Any future trade agreement, with any other country, should include the type of intellectual property protections for medicines that Pelosi insisted be removed from the USMCA. Just as the USMCA cannot be considered a “model” trade agreement because of what the Speaker demanded be removed, any future trade agreement could not be called a model without vital intellectual property protections for America’s scientists and medical innovators.

Kent Kaiser, Ph.D., is a senior advisor for the Trade Alliance to Promote Prosperity.