Enhancing Trade By Protecting Intellectual Property

As published in the National Post, April 14, 2011

By John Manley and Russell Williams

Canadians are passionate about their national symbols, from the maple leaf and hockey to universal health care. But there's another aspect to our Canadian character that is vital to our country's success: Our ability to trade with the rest of the world.

Trade in furs, timber and other goods dates back to our earliest experiences as a nation. More recently, the Canada-U.S. Free Trade Agreement and its successor, the North American Free Trade Agreement (NAFTA), have delivered enormous benefits to Canada. Since NAFTA took effect in 1994, trade among Canada, the United States and Mexico has nearly tripled, topping $1-trillion in 2008.

Today, one out of every five Canadian workers owes his or her job to international trade. Given this history and record, it is only natural that we would want to enhance our trading advantage by reaching out to a wider circle of economic partners, including the European Union (EU).

Negotiators for Canada and the EU have been holding talks, with the most recent round taking place this week in our nation's capital, aimed at forging a Comprehensive Economic and Trade Agreement (CETA). If the talks succeed, Canada would become the only country in the world to have signed a comprehensive trade deal with both the United States and the 27-nation EU. NAFTA and CETA combined would provide our relatively small economy of 33 million people with privileged access to a market of almost one billion consumers.

According to the federal government, a trade deal with Europe has the potential to give "a $12-billion boost to the Canadian economy and increase bilateral trade by over 20 per cent."

With these kinds of benefits on the table, political leaders at both the federal and provincial levels ought to be making CETA a "must do" in their policy platforms.

As part of the negotiations, the Europeans have been urging Canada to improve its protection of intellectual property (IP) for pharmaceuticals and other innovative products. They're right, but we should be enhancing IP protection not just because other countries advocate it. We should do it because it's the right thing to do to improve health care, spur innovation and create jobs. Unless we make IP improvements to compete with other leading industrialized countries, we won't be able to attract a greater share of the $100-billion in life-sciences research and development that is available annually.

World-class IP protection is fundamental to Canada's success. It will allow our country to be the birthplace of ideas and of new processes and products that will improve our quality of life. These include new medicines and vaccines that represent our best hope in the fight against disease.

Opponents of improved IP protection have suggested that it could lead to higher drug costs. Europe's experience, however, proves otherwise. European nations enjoy strong public health systems and better access to innovative medicines while at the same time promoting innovation through stronger IP safeguards.

In any event, health-care affordability is an issue for social policy; the notion that governments should use IP as a tool for containing drug costs is both shortsighted and counterproductive. The entrepreneurs and scientists in Canada's burgeoning health sciences and biotech sector deserve better.

Our country's success is built on our openness to trade but we are also a nation of innovators - from Sir Frederick Banting and Charles Best, the co-discoverers of insulin, to the Montreal researchers who helped develop the revolutionary HIV/AIDS treatment known as 3TC.

By strengthening IP protection and opening our doors to the EU, the world's largest single market and biggest investor, Canada can create the kind of jobs and opportunities that will enhance our success in the global economy.

John Manley is President and Chief Executive Officer of the Canadian Council of Chief Executives and Co-Chair of the Coalition for Action on Innovation in Canada. Russell Williams is the President of Rx&D.