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Glyn Moody

Glyn Moody's look at all levels of the enterprise open source stack. The blog will look at the organisations that are embracing open source, old and new alike (start-ups welcome), and the communities of users and developers that have formed around them (or not, as the case may be).

ACTA Update XVII

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Since my last ACTA update, quite a lot of good stuff has happened. For a start, all four European Parliament committees have recommended that ACTA should be rejected when the plenary vote takes place at the beginning of July. That just leaves one more committee – that for International Trade, or INTA – to make its recommendation, which should take place next week. I'll be writing more about this vote soon.

In the meantime, I wanted to point to what seems to be the lone example of a pro-ACTA site appearing recently. That's not too surprising, since most of the action will be taking behind the scenes, as highly-paid lobbyists descend upon Brussels and its politicians in an attempt to turn things around. That's why it will be vital for all of us to contact our MEPs nearer the time of the vote; again, I'll write more about this when the moment comes.

The new site is called "ACTA Facts", and suggests we should "get the facts", which may recall a similar campaign by a certain large software company. Indeed, you can be pretty sure that when a site is set up inviting you to "get the facts", what you will really be getting is some choice misinformation, and so it is with this latest example:

Our MEPs have been confronted with a propaganda campaign suggesting that ACTA ignores fundamental rights, threatens protection of personal data, monitors individuals on the Internet, endangers freedom of expression, affects the whole supply chain of medicines in developing countries...and on and on. These claims are flatly not true, and cloud responsible decision-making by our political leaders.

As this makes clear, this is trying to sway some of the MEPs who have realised just how bad ACTA is. The site's main "facts" are available from the FAQ page. Here's a sample:

Fiction: ACTA encourages the targeting of technical intermediaries to be forced to remove material from the Internet, something that presently requires a court order...

FACT: ACTA includes no requirements whatsoever for intermediaries to remove material from the Internet. (Sec. 5)

ACTA may not "require" this explicitly, but signatories are obliged to "to promote cooperative efforts", which in practice means that intermediaries would be forced to do this "voluntarily", or face the consequences.

Fiction: ACTA will have a chilling effect on generic competition, and therefore consequences on access to medicines...

FACT: Generics are not counterfeits; nothing in the ACTA interferes with lawful generics that are widely used and traded under existing EU laws that ACTA will not alter.

Well, that's not what the respected Médecins Sans Frontières thinks. In a report entitled "Blank Cheque for Abuse: ACTA & its Impact on Access to Medicines", it writes:

As a treatment provider, Médecins Sans Frontières (MSF) is deeply concerned about the impact of the enforcement agenda on the production and supply of affordable, legitimate medicines. We urge contracting States not to sign or ratify ACTA unless all concerns related to access to medicines are fully addressed.

And MSF has no reason to misrepresent the situation, since it simply wants to get medicines to people who need them.

Fiction: ACTA never mentions fundamental rights, when it clearly could jeopardise some of them...

FACT: ACTA does mention fundamental rights; in fact it is the first and only international agreement to explicitly provide that enforcement of intellectual property rights in the context of the Internet "shall be implemented in a manner that … preserves fundamental principles such as freedom of expression, fair process, and privacy." (Art 27.2)

This is particularly outrageous: ACTA not only doesn't mention fundamental rights like "due process", it uses a completely meaningless and made-up term "fair process" in a cynical attempt to hide that fact.

Fiction: ACTA was negotiated in a totally non transparent way, which is unacceptable considering the impact the agreement may/could have on citizens...

FACT: Texts of ACTA were made fully public for more than 17 months before any government signed the agreement.

The text was published in April 2010, but only after there had been leaked versions circulating for nearly two years. Moreover, no public discussion of that text was permitted – the consultation during the negotiations was minimal, and consisted of a handful of meetings in Brussels. There was simply no way most citizens could express their views on ACTA. This contrasts with the detailed negotiating positions there were passed to US business interests on a routine basis.

Fiction: ACTA is bypassing international fora, such as WIPO and WTO, which is particularly unreasonable considering the magnitude of the issues it is dealing with...

FACT: A core goal of ACTA is to be "supportive of international enforcement work and cooperation conducted within relevant international organizations" (p.E-1) and to avoid duplication of any other international effort (Art. 36).

It doesn't matter what ACTA states, the way in which ACTA was negotiated as a backroom deal outside the existing international forums, with no transparency or participation, gives the lie to those words.

Fiction: ACTA leaves key terms undefined and open to interpretation ("commercial scale", "aiding and abetting", etc)...

FACT: ACTA has two pages of definitions, and brings greater clarity to concepts like "commercial scale" than has existed previously.

It's absolutely true that ACTA has two pages of definitions: pity that the key concept "commercial scale" isn't included there. In fact, nowhere is it defined – hence the problem, since potentially it could apply even to trivial acts of infringement.

Debunking the other fake facts is left as an exercise to the reader – you may find my earlier Updates useful, especially Update III.

The FAQ, then, is a rehash of some very tired and weak arguments. There's more recycling of old material in the section "Why support ACTA", including the BASCAP and INTA report "ACTA in the EU: A practical analysis". I demolished what passed for arguments there in my ACTA Update X.

However, to be fair there does appear to be something new here – a report entitled "ACTA, in the EU: Assessment of Potential Export, Economic and Employment Gains":

BASCAP's new report, ACTA, in the EU: Assessment of Potential Export, Economic and Employment Gains, links ACTA to potential economic growth of ‚¬50 billion and 960,000 new jobs in EU.

The study was release June 4, 2012 and was conducted by the international economic research firm, Frontier Economics. It concludes that the EU can expect to see increased trade to the ACTA signatories, and that this increase in exports will lead to an increase of up to ‚¬19 billion in the EU economy. If ACTA can be expanded beyond the initial group of signatory countries, including the BRIC countries (Brazil, Russia, India and China), the value to the EU country will be significantly greater. The increase in exports to the BRIC countries alone that could be expected with greater intellectual property (IP) protection under ACTA could increase EU growth by a further ‚¬23 billion. With stronger enforcement of IP rights in countries where counterfeit products are rife (i.e. China), EU Gross Value Added could increase by a further ‚¬8 billion.

Full acceptance of ACTA by the current signatories, including the EU, and working to extend ACTA membership to BRIC economies could boost European output by a total of ‚¬50 billion, and create as many as 960,000 new jobs.

For perspective, an increase in GVA of ‚¬50 billion represents about 0.4% of total 2011 European GVA. This potential is critical since the EU economy grew by just 1.5% in 2011 and growth in 2012 is forecast to be zero for the EU and -0.3% for the Euro area. Forecasts for 2013 put growth in the EU at less than 1.5%.

Impressive figures, no? So let's take a closer look.

There are two parts to this analysis. Here's the "Base Case" (their words, not mine):

EU trade to the ACTA signatories currently is valued at ‚¬590 billion and provides 12 million jobs.

To reflect that not all traded products are vulnerable to IP theft, only 67% of these totals are considered.

Given the size of European exports and the estimated scale of counterfeiting and piracy worldwide, we believe it is reasonable to establish a "base case" on modest increases in EU exports of 5% and 10%.

5% increase in exports: Output growth of ‚¬19 billion and 400,000 new jobs being created; and,

10% increase in exports: Output growth of ‚¬40 billion and 800,000 new jobs being created.

That looks fair enough, but where do those increase in exports come from? Here's the rationale:

All countries that sign on to ACTA are signalling a renewed commitment to IPR enforcement that will strengthen the fight against counterfeiting and piracy, both within signatory countries and collectively through the international cooperation provisions in ACTA. As a result, unfair competition from infringing products will be reduced.

If we estimate that intensified and/or increased IPR protection and enforcement leads to a reduction in IP infringing products, then existing market demand would be met at least partially by increased imports of legitimate products. Given the magnitude of EU exports to these markets, ACTA would increase the potential for EU exports, driving the associated benefits of higher growth and employment.

So, the basic argument is that if countries sign up to ACTA, then they will intensify their fight against counterfeits, and that will cause a 5% or 10% boost in EU exports to those countries. But let's just look at which countries outside the EU are in ACTA:

United States, Australia, Canada, Japan, Morocco, New Zealand, Singapore and South Korea, Mexico and Switzerland.

Now, with the possible exception of Morocco and Mexico, I would like to suggest that all of those countries already have anti-counterfeiting policies that are pretty much on a par with ACTA (just as the European Commission keeps on telling us is the case for the EU.) Signing up to ACTA will produce very little impact on the level of counterfeits in those countries, which are already actively combating them.

So, at most, the uplift from implementing ACTA will come from Mexico and Morocco, which together represents a pretty small chunk of the EU's export market. So figures of 5% or 10% for all those signatories is sheer nonsense, as are the figures of ‚¬19 billion growth and 400,000 new jobs being created. The real effect is probably one or two orders of magnitude less.

Even more ridiculous is the second part of the analysis:

In total, considering on conservative assumptions, bringing ACTA into being and working to extend ACTA membership to BRIC [Brazil, Russia, India, China] economies could boost European output by ‚¬50 billion, and create as many as 960,000 new jobs.

Well, the incidental assumptions may be conservative, but the underlying premise – that countries like China or India would sign up to a treaty specifically designed to destroy significant parts of their industries – is flawed, so the numbers are meaningless. Indeed, both China and India have on several occasions expressed their concerns about ACTA.

In essence, then, this report is little more than fantasy economics: it might as well claim that China could boost ACTA signatories by giving them the trillion dollars it holds in its reserves – it's about as likely. The fact that one of the few public supporters of ACTA has to resort to making numbers up in this way shows just how desperate it is – and how completely devoid of any benefit for Europe ACTA is. If anything, this new site reinforces, rather than diminishes, the case for firmly and finally rejecting ACTA in the plenary vote next month.

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