Preferential trade agreements and power asymmetries: the case of technological protection measures in Australia

Abstract

Since the 1980s states have sought to harmonise economic standards to aid the flow of goods, services and finance across borders. The founding agreements of the World Trade Organisation (WTO), for example, harmonised standards on services, intellectual property and investment. However, mutlilateral trade negotiations in the WTO have since stalled. In response, the United States (US) has engaged in forum shopping, using preferential trade agreements at the bilateral, regional and multinational level to harmonise international standards. This article argues that through forum shopping the US has been able to export standards that support the commercial interests of US-based industries more than they encourage economic exchange across borders. Furthermore, because power asymmetries are starker in preferential trade negotiations smaller and middle power states should not enter trade agreements, which include regulatory harmonisation. This is illustrated with the case of the US-Australia free trade agreement, looking specifically at a copyright standard known as technological protection measures (TPMs). It was clear before, during and after the agreement was signed that Australia’s existing standard on TPMs was more popular than the US-style standard. Nevertheless, a US-style standard is in effect domestically because of the trade agreement.