‘New’ American trade policy must not misunderstand the role of copyright

The Wall Street Journal reported on Jan. 24 that the Biden administration will adopt a “new look” for U.S. trade policy — one that focuses on global investments that support American exports and jobs. While this may not represent a major shift in doctrine, the US trade representative should certainly focus on opportunities for American workers. But if that is truly the goal, then the Biden administration must reject the views reportedly expressed by former Treasury Secretary Lawrence Summers. “[Summers argued] against prioritizing gains for Hollywood, investment banks and inventors who want intellectual property protection. Their ‘elite concerns’ don’t contribute much to U.S. employment or tax revenue,” the WSJ stated.

It cannot be overstated how consequentially naïve Summers’ statement is about IP protection, specifically copyrights as an “elite concern.” Broadly speaking, the creative industries employ more than 6 million Americans and comprise 7.4 percent of the U.S. economy. More specifically, the invocation of Hollywood is a misleading. It is a term that conjures movie stars but which does not accurately describe the American motion picture industry, which employs tens of thousands of middle-class workers in some of the highest paying, skilled-labor, union and freelance jobs in the nation.

Yes, the big studios make billions, and the executives and movie stars make millions, but for every star we see on screen, more than a hundred technicians, like electricians, props-makers, seamstresses, drivers, and carpenters are working just outside that frame. These are the people who make most of the magic happen. On average, they earn $80,000 annually, and they practice their trades for years to achieve the levels of skill necessary to advance in a highly competitive industry. Most acutely, the health and retirement security benefits of these professionals are directly dependent upon licensed distribution of their work products. Make no mistake: where international agreements fail to ensure the effective protection of copyright, piracy thrives. And piracy threatens American jobs and small business.

Eighty-five percent of all businesses in “Hollywood” employ 10 people or fewer, and independent production companies comprise the lion’s share of all motion picture production in the U.S. These projects are financed through international market pre-sales. Providing a return on those investments can be — and often has been — destroyed by online piracy rendering the exclusive licenses worthless in one or several markets. As these risks increase, budgets decrease, which drives down production overall and exports domestic work overseas.

At a March 2020 Senate Judiciary hearing — one in a series held to discuss potential reform of the Digital Millennium Copyright Act (1998) — producer Jonathan Yunger stated in response to a question from Sen. Chris Coons (D-Del.), “We used to shoot movies in the United States. We have a movie studio in Shreveport, Louisiana, and unfortunately because we finance our movies based on international pre-sales, all of those revenues have been going down due to things like piracy….So that studio we have in Shreveport can pretty much be turned into a public storage today.”

Further, in direct contradiction to the sentiments of Summers, it is in fact only the major studios (e.g., Marvel) that come anywhere near absorbing the volume of piracy as a cost of doing business in the digital age. This is not to say that piracy of blockbusters does not harm the overall ecosystem, but it is unquestionably the independent producers who are the first to cut corners, shed jobs, move production to international markets, and invest in fewer projects overall.

The protection of copyrights through international trade agreements is certainly not an “elite” issue. On the contrary, thousands of creative workers, especially those who rely on live venues, have been laid off due to the COVID 19 crisis. There simply could not be a worse moment to overlook America’s creative workforce, and the “Hollywood” to which Summers refers is only a fraction of the total picture.

Finally, inasmuch as the economic and jobs numbers are indisputable, the need to protect copyrights at home and abroad is about more than numbers. Particularly through this period of pandemic and political strife, we have been reminded quite often these days how important the arts are to our personal health and to the health of our democracy. More than just decorative amusements to bide our time or escape our anxieties in isolation, the arts continue to remind us that in America, aspiration is everything. And that is worth protecting at almost any price.

David Newhoff is a writer and copyright advocate. His first book “Who Invented Oscar Wilde? The Photograph at the Center of Modern American Copyright” was published in November of 2020 by Potomac Books.