One Trade Agreement Startups Should Know About

 

Venturebeat originally posted about this earlier this week and we thought it was an important one to be aware of.

Unbeknownst to most, a new trade agreement between the Trans Pacific Parternship (the “TPP”) has been in development for almost a year now.  The TPP consists of the United States, Mexico and a handful of both South American and Asian nations.  This “handful,” however, accounts for 40% global production and a third of all trade.  All negotiations thus far regarding this agreement have been held behind closed doors and have only come to light thanks to the folks at Wikileaks.

Only the participant nations and the privileged few have been involved in these secret negotiations, and the privileged few include hundreds of massive multinational corporations.  It’s clear that the startup community with its ill-aligned interests has not and will not have a say in the negotiations.  This in itself causes problems for the emerging companies based in these nations.

The negotiations involve very standard matters relevant to international law/treaties (environmental protection, for example), but they also involve talks about how the TPP will hand intellectual property moving forward.  That’s where things get dicey for startups.  It appears that SOPA-esque language is making its way back into the talks.

For example, discussions include increasing the length of patent terms while decreasing the level of novelty needed to obtain a patent.  This could create a situation where startups that want to innovate need to budget for the legal fees associated not only with immediately patenting their work, but also the inevitable patent trolls that follow.  The agreement also tightens copyright protection (which Lars Ulrich and friends will be pumped about) and would force startups to pay even more (you guessed it!) legal fees to check for infringement and disparagement issues, amongst other things.

The point is this: these regulations have the general effect of unnecessarily driving the cost of business up for young companies, creating more barriers to entry than necessary.  When you play out the scenario, you can see how these barriers could have a stifling effect on the type of risk-taking startups champion in order to innovate and disrupt.

When it comes to something like an international trade agreement, startups don’t really care usually.  Most of them don’t really have to care.  But it’s necessary to recognize the potential for a pattern.  Massive agreements like the one being negotiated by the TPP tend to set the bar for future legislation, so it’s best to be aware of the issues and get involved early.

Feel free to reach out to our team at any time with any questions regarding startups, insurance, or even the TPP itself! We can be found at Mailto:info@foundershield.com and 6468541058.