A ‘secret’ copyright treaty

In company with some industry groups, such as the Australian Digital Alliance (comprising national and state and university libraries and senior Australian jurists—ADA’s submission on ACTA is here), I urged the Australian government not to join these negotiations in a submission to the Department of Foreign Affairs and Trade (DFAT).

Although there has been minimal press coverage of this proposed treaty, highly-credentialed copyright experts are also expressing their concern. William Patry—an expert on US copyright legislation, former copyright counsel to the US House Judiciary Committee and now Senior Copyright Counsel to Google—has attacked the objectives and lack of transparency of the negotiations.

I agree with Patry’s criticisms. I believe that this negotiation has other detriments, too, for the WTO’s open and consensus-based framework that I outlined in an email I sent to the Australian negotiators in Feburary:

I agree with jurists and librarians in the Australian Digital Alliance (not to mention the members of the government’s former Copyright Law Reform committee) who say that our own copyright legislation is already imbalanced in favor of rights holders. But my objections to this proposed negotiation/treaty are made from a trade-analysis perspective.

Two reasons for concern:

  1. This will be one of the first (if not the only) trade negotiation concerning an obligation specifically covered by an existing WTO Agreement to be launched outside WTO without any prior attempt to address the supposed problems first in the existing multilateral framework (e.g. in the Doha agenda). There may be nothing objectionable in the negotiation of a trade agreement outside WTO even when the domain (TRIPS) is already covered in WTO. But to do so without first attempting to address the supposed issues in WTO first is a cynical act that shows very little concern for the credibility of the system.
  2. The implausibility of the “$200 billion” problem as stated in e.g. the Minister’s press release. This is what the OECD documents say is the basis for this particularly shoddy claim:

24. A model was developed using customs interception data (adjusted for known biases) to establish an indirect estimation framework. Running the model resulted in the development of two sets of data which established (i) the product categories in international trade that were most likely to be counterfeit or pirated and (ii) the economies that were most likely to be sources of such goods.

25. The two sets of data were then combined to develop a matrix indicating the relative likelihoods that imports of specific products from specific economies would be counterfeit or pirated. Further analysis based on a combination of this matrix and international trade data (landed customs value basis) led to the conclusion that up to USD 200 billion of that trade could be in counterfeit or pirated products. This amount is larger than the national GDPs of about 150 economies around the world. The value of actual customs interceptions is far below this, which means that customs authorities are only intercepting a small fraction of the actual trade in counterfeit and pirated products…

As a trade analyst1, I have to say that this looks like a manipulative model. Who knows what ‘customs interception’ data reflect (suspicions? allegations? random checks? checks for other, or for multiple, infringements?) or what the ‘adjustments’ made by the modelers were. But to apply this un-verified set to global direction-of-trade data to come up with a supposed ‘potential’ counterfeit trade (as if the intersection of the matrices showed ‘hard’ numbers) and then to publish the alarming supposition ($200billion) in the first sentence of the paper is just spin.

I’m not sure what the motives of the Australian government are in joining this ‘negotiation’ (With WHOM, incidentally, are we ‘negotiating’?). But I can more confident in assessing the motives of the other proponents.

  1. The US especially, but also the EC, got a huge windfall out of TRIPS and are looking to repeat it (at the cost of developing countries, mostly). Here (attached image) is some World Bank data from much more reputable trade analysts (a paper by Mike Finger for the ADB [See Tables 3 and 4]) that shows the relationship between the UR gains from patents rents and the UR gains from tariff reductions. China’s obligations (measured as transfers of the economic rent) are estimated to be 5 times greater in TRIPS than in tariffs. Copyright obligations alone were almost the same size as its tariff obligations.
  2. The proponents of this overblown idea know that they have zero prospects of getting consensus on their objectives in WTO (or in WIPO).
I urge you to get out of these talks or to sit on your hands. This ACTA ‘coalition’ is bad for us (especially since it cannot lead to a consensus), bad for the system and bad for our ambitions in our bilateral trade negotiations, too.

I am told that the Australian Government has not yet made a decision to join an ACTA treaty, but is participating in the “negotiations” in order to be informed of its content.

1. I was the DFAT negotiator responsible, among other things, Australia’s participation in the TRIPS negotiations during the first half of the Uruguay Round from 1986 to 1990.


  • ACTA looks very worrying. I’m wondering what you think of the following quote in the discussion paper:

    “Intellectual property rights (IPR) infringement is recognised as a problem in all economies to a varying extent. A recent OECD report indicates that negative impacts of IPR infringement are wide-ranging, creating significant costs for governments, international trade and economies. These costs have direct negative impacts on individual businesses, employees and consumers.”

    I’m pretty skeptical about all the power granted to rights-holders and especially at the large valuations of the effect of piracy (eg.  from the same paper: If domestic production and trade in infringing goods and digital piracy via the Internet were also to be included, the OECD report estimates the total value would be increased by several hundred billion US dollars). Do you think current copyright law is ok as-is or does it need to be relaxed?

    Are governments entering into these negotiations at the behest of corporate interests wanting to protect their rights? Or is there a genuine public/national interest at stake? Do people really think music/drugs/art/creation/innovation is being killed by a lack of copyright/patents/etc?

    It seems to me that the only good way forward for copyright law is to develop some relaxations and exceptions. Consumers need their first sale, private copying, etc rights restored. Developing countries need to be able to parallel import needed medication or produce it themselves.

  • Hi Devon,

    I think copyright law in Australia has leaned far too much toward the protection of the interests of rights holders and has given too little room to the public interest in access, distribution and consumer rights to fair uses. Hence, my support (www.petergallagher.com.au/index.php/site/article/new-zealand-copyright-reform) for the more balanced NZ legislation. I’m pleased to say that the Australian Digital Alliance (see article) seems to share this view.

    As to what the motives of the rights-owners might be for ACTA… My article implies that I think they’re pretty predictable. Take a look at the Mike Finger article I cite. You might find the data interesting.


  • Thanks for the reponse Peter.

    FYI, Wikileaks has a copy of a “draft discussion paper” on ACTA which was circulated to some industry groups. It is supposedly meant to be the guide behind negotiations. You can view it at wikileaks.

  • This will only set back the intense process that has been undertaken to process for a much safer and easier world trade. Hope the Australian government will take note.!

  • McSporran wrote:

    Thanks for the update Peter, It’s shocking that the first I hear of this is on boing boing.
    Do you think that our control/Jesus freak Communications minister will be able to resist trying to implement this. No chance.

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