1818 N STREET, NW, 7TH FLOOR WASHINGTON, DC 20036 TEL (202) 355-7900 ∙ FAX (202) 355-7899 WWW.IIPA.ORG ∙ EMAIL: [email protected] October 29, 2020 FILED VIA WWW.REGULATIONS.GOV USTR-2020-0034 Edward Gresser Chair, Trade Policy Staff Committee Office of the U.S. Trade Representative Washington, DC 20508 Re: IIPA Written Comments Regarding Foreign Trade Barriers to U.S. Exports for 2021 Reporting in Response to: USTR’s Request for Comments to Compile the National Trade Estimate Report on Foreign Trade Barriers, 85 Fed. Reg. 55925 (September 10, 2020) Dear Mr. Gresser: The International Intellectual Property Alliance (IIPA)1 – representing significant sectors of the copyright-based industries in the United States2 – takes this opportunity to provide the Office of the United States Trade Representative (USTR), through the Trade Policy Staff Committee (TPSC), with written comments to assist “[USTR] and the TPSC in identifying significant barriers to U.S. exports of goods and services, U.S. foreign direct investment, and the 1IIPA is a private sector coalition, formed in 1984, of trade associations representing U.S. copyright-based industries working to improve copyright protection and enforcement abroad and to open foreign markets closed by piracy and other market access barriers. Members of the IIPA include Association of American Publishers (www.publishers.org), Entertainment Software Association (www.theesa.com), Independent Film & Television Alliance (www.ifta-online.org), Motion Picture Association (www.motionpictures.org), and Recording Industry Association of America (www.riaa.com). Collectively, IIPA’s five member associations represent over 3,200 U.S. companies producing and distributing copyrightable content. The materials produced and distributed by IIPA member companies include entertainment software (including interactive video games for consoles, handheld devices, personal computers and the Internet) and educational software; motion pictures, television programming, DVDs and home video and digital representations of audiovisual works; music recorded in all formats (from digital files to CDs and vinyl) for streaming and other online services, as well as broadcasting, public performance and synchronization in audiovisual materials; and fiction and non-fiction books, educational, instructional and assessment materials, and professional and scholarly journals, databases and software in all formats. 2In December 2018, IIPA released the latest update of its comprehensive economic report, Copyright Industries in the U.S. Economy: The 2018 Report, prepared by Stephen E. Siwek of Economists Inc. (2018 Report). According to the report, the “core” copyright industries in the U.S. generated over $1.3 trillion of economic output in 2017, accounting for 6.85% of the entire economy. The core copyright industries also employed over 5.7 million workers in 2017, accounting for 3.85% of the entire U.S. workforce, and 4.54% of total private employment in the U.S. The jobs created by these industries are well-paying jobs; for example, copyright industry workers earn on average 39% higher wages than other U.S. workers. In addition, according to the 2018 Report, the core copyright industries outpaced the U.S. economy, growing at an aggregate annual rate of 5.23% between 2014 and 2017, while the U.S. economy grew by 2.21%. When factoring in other industries that contribute to the copyright economy (which together make up the “total” copyright industries), the numbers are even more compelling. Additionally, the 2018 Report highlights the positive contribution of selected copyright sectors to the U.S. overall trade balance. Given the importance of digital delivery to the copyright-based industries, this sector has the potential to multiply its export revenues if our trading partners provide strong copyright-protective environments. In 2017, these sectors contributed $191.2 billion in foreign sales and exports, exceeding that of many other industry sectors, including chemicals, aerospace products and parts, agricultural products, and pharmaceuticals and medicines. IIPA Written Comments Regarding Foreign Trade Barriers to U.S. Exports for 2021 Reporting, 85 Fed. Reg. 55925 (September 10, 2020) Docket: USTR-2020-0034 October 29, 2020, Page 2 protection and enforcement of intellectual property rights for inclusion in the [National Trade Estimate Report on Foreign Trade Barriers (NTE)]” to be released in 2021. IIPA’s Interest in the 2021 NTE Report Since 1984, IIPA and its members have worked in partnership with the U.S. government to improve the ability of the copyright industries to compete fairly in foreign markets. This cooperation has resulted in improved copyright protection and enforcement, and fairer and more equitable market access in many countries around the world. Unfortunately, too many markets continue to inadequately protect and enforce copyrights, and maintain burdensome barriers to U.S. creative goods and services. These market limitations often create an environment ripe for piracy, since they constrain the ability of the U.S. creative industries to export legitimate goods and services. Of course, these constrained markets negatively impact revenues returning to the United States and the growth of U.S. jobs, particularly those that are connected to exporting goods and services to the worldwide marketplace. The NTE facilitates the U.S. government’s efforts to reduce or eliminate these barriers to U.S. trade, assists with enforcement of U.S. trade laws, and strengthens the rules-based trading system. In its annual submission as part of the Special 301 process, IIPA details to the U.S. government the U.S. copyright industries’ concerns regarding the inadequate protection and enforcement of copyright, as well as barriers that deny fair and equitable market access to U.S. persons who rely on copyright. Attached to this filing is IIPA’s February 2020 Special 301 submission for USTR’s and the TPSC’s consideration in developing the 2021 NTE.3 Significant Foreign Trade Barriers for the Copyright Industries Lack of Intellectual Property Protection (e.g., inadequate copyright regimes or enforcement issues). The copyright industries, including the many workers they employ and their significant contributions to the U.S. economy, depend on the adequate and effective protection and enforcement of intellectual property rights. Accordingly, lack of adequate protection and enforcement of intellectual property is of primary concern to the copyright industries. As noted above, the attached IIPA 2020 Special 301 submission details our concerns regarding inadequate intellectual property protection and/or enforcement. This is a pervasive challenge confronting the U.S. copyright industries in both developed and developing countries around the world. Mexico’s July 2020 implementation of certain copyright and enforcement obligations of the U.S.-Mexico-Canada Free Trade Agreement (USMCA) was a positive development since the filing of the Special 301 submission, but a constitutional challenge to the implementing legislation is highly concerning to IIPA. The constitutional challenge, if ultimately successful, would place Mexico out of compliance with its USMCA obligations and undo critical gains, which are much needed improvements to the Mexican legal system, achieved in the legislation. 3IIPA’s 2020 Special 301 Report is available to the public via www.regulations.gov, as well as our website, at http://www.iipa.org/special301.html. IIPA plans to participate in the 2021 Special 301 process, and as in prior years, IIPA will provide the TPSC with a courtesy copy of our 2021 Special 301 submission for its consideration in this NTE docket. In years past, the NTE report, published in March, has often incorporated the most current IIPA information and statistics, even though our Special 301 submission arrives later in the NTE production process. IIPA appreciates the Committee’s efforts in that regard. IIPA Written Comments Regarding Foreign Trade Barriers to U.S. Exports for 2021 Reporting, 85 Fed. Reg. 55925 (September 10, 2020) Docket: USTR-2020-0034 October 29, 2020, Page 3 Another important development since the filing of the Special 301 submission is that in June 2020 South Africa’s President referred the Copyright Amendment Bill and the Performers’ Protection Amendment Bill back to the National Assembly based on “a number of reservations as to the Constitutionality of the Bills.” At the time of this filing, the National Assembly is reconsidering these bills. It is critical that the National Assembly does not rush this process and make only minor revisions; instead, consistent with the President’s directives, South Africa’s Parliament should redraft the bills to address the concerns of all stakeholders and ensure the provisions comply with international agreements. Enactment of the bills in their current form would place South Africa out of compliance with international norms, its obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), as well as the eligibility criteria of both the Generalized System of Preferences (GSP) and the Africa Growth and Opportunity Act (AGOA) regarding intellectual property.4 The South Africa country report from the IIPA 2020 Special 301 submission includes a full description of the deficiencies in these two bills, as well as other deficiencies in South Africa’s legal and enforcement regimes. Barriers to Digital Trade and Electronic Commerce (e.g., discriminatory practices affecting