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Monday, December 22, 2014         

APEC: TRADE PACTS, GOOD AND BAD


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Trade agreements desirable but should strongly protect intellectual property

By John C. Lechleiter

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This week the United States is hosting the leaders in the Asia-Pacific region as part of the Asia-Pacific Economic Cooperation summit.

Among the many ideas being discussed, one, in particular, can wait no longer: We must secure key free trade agreements that will support our economy, our innovation-based industries, and jobs in the U.S.

The opportunity is great. The 21 member nations of APEC include one-third of the world's population and 55 percent of the world's GDP. Nearly 60 percent of U.S. exports go to APEC economies, and seven of America's top 15 trading partners are in APEC.

In the past, APEC has played an integral role in the trade debate, developing the structural framework for agreements throughout the region.

One agreement currently being negotiated is the Trans-Pacific Partnership (TPP), which was announced at the APEC Leaders meeting two years ago. This regional free trade agreement includes the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

Other countries, including Japan, may join the partnership as well, further increasing the economic importance of the TPP.

Indeed, the TPP represents an important watershed with very real potential to become the basis for a free trade area of the Asia-Pacific.

U.S. engagement with the countries of the Asia-Pacific region must be a vital part of any national strategy for re-igniting our economy and creating new jobs. Yet U.S. economic engagement with the region has been declining over the last decade. While our competitors in Europe and elsewhere have increased their presence and, in some cases, have signed new free trade agreements in Asia, we have been left behind -- suffering the loss of trade and significance in the region. We simply cannot let this happen.

Clearly, our global competitors understand the importance of trade.

China in particular is aggressively expanding its trade relationships with other countries. While the U.S. has 11 active free trade agreements and four more pending, China has 11 trade agreements, five under negotiation and four more proposed. During the past 18 months, China has secured five agreements; the U.S., three.

Trade supports 38 million U.S. jobs -- more than one in five -- with nearly 18 million relying on transactions with America's current free trade agreement partners. We need to build on that strength, taking advantage of this week's APEC summit to make substantial progress towards conclusion of the TPP. But as with any trade deal, it needs to be done right.

For example, for the TPP to be truly successful, it must contain strong protection for intellectual property.

Industries that center on intellectual property employ more than 19 million Americans and account for some 60 percent of total U.S. exports.

High standards of intellectual property protection are critical to increasing U.S. companies' ability to export.

The recently ratified Korea-U.S. Free Trade Agreement and U.S. law should serve as a model for the TPP and all future trade negotiations. Our agreement with Korea protects the ideas and inventions developed by our brightest minds -- to ensure that those ideas translate into increased employment and economic growth within our own borders.

Quite simply, the U.S. cannot possibly hope to sustain its competitive advantage in the global marketplace unless we have strong protection for our best ideas and inventions.

We should accept nothing less -- especially with other trading nations watching the precedents we establish.

The standards set by the Trans-Pacific-Partnership agreement will dictate the tone for all Asia-Pacific trade relationships for decades to come.

Simply put, the TPP offers the means to advance U.S. economic interests with the fastest-growing economies in the world and to expand U.S. exports -- so critical to our economic recovery and the creation and retention of high-paying, high-quality jobs in the United States. This is especially true when it comes to innovation-based industries, where America still has a decisive edge.

With American innovation and millions of jobs on the line, now is the time to act.


John C. Lechleiter is chairman, president and chief executive officer of Eli Lilly and Co. He participated in the APEC 2011 CEO Summit's opening panel discussion in Honolulu on Friday.






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