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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