A while back I noted that the new USMCA treaty (i.e., NAFTA 2.0) would not increase American GDP. The government’s own analysis projects a GDP decrease of 0.12 percent, but then adds back 0.47 percentage points because they figure that newfound certainty in things like intellectual property rules will increase investment. This suggests that we might be better off just adopting the IP rules and skipping the rest.
But wait! Jeffrey Schott of the Peterson Institute for International Economics—normally the kind of place that loves trade treaties—says that even this is bogus:
Some supporters of the deal say it provides new rules that will benefit the U.S. But those “new” rules aren’t new. Rather they mirror provisions affecting labor, the environment and e-commerce from the revised Trans-Pacific Partnership that have been carried out by Mexico and Canada since that accord went into effect on Dec. 30, 2018. Trump withdrew from the TPP, but Canada and Mexico remained in it, and already apply these provisions in trade relations with the U.S.
Is this true? It seems like it. The main IP provisions of the USMCA are here. A side-by-side comparison with TPP is here. As near as I can tell, Canada and Mexico already agreed to all of USMCA’s IP rules when they signed onto TPP, with one exception: patent protection for biologics is ten years in USMCA compared to eight years in TPP. That’s about it.
Unless I’m missing something, Donald Trump has negotiated a treaty that favors Canada and Mexico when it comes to trade in goods, and does virtually nothing new to favor the US in IP law. It’s even more useless than I ever imagined.
POSTSCRIPT: Needless to say, if there are any legit trade experts out there who think I am missing something, please speak up!