The 'democratic deficit' in Australian law-making

In an unusual move, the parliamentary committee tasked with reporting on all treaties entered into by the Australian executive has recommended that the government delay ratifying the troubled Anti-Counterfeiting Trade Agreement ('ACTA'). The 'Joint Standing Committee on Treaties' or 'JSCOT' has almost always made recommendations in line with government policy. With ACTA however, JSCOT has asked that the government wait until:JSCOT receives and considers independent analysis of the agreement's economic impact for Australia; the Australian Law Reform Commission completes its inquiry into copyright law; and the government issues notices of clarification in relation to several terms of the agreement.

ACTA has attracted heavy criticism and faced similar setbacks internationally.All five parliamentary committees in the EU have recommended against ratification. Thousands of citizens across Europe protested the agreement in February and again in June, and several politicians involved in its negotiation resignedorapologised for signing the agreement.

What is ACTA?

ACTA is a plurilateral agreement with the stated purpose of providing an international framework for the better enforcement of intellectual property rights, to combat the 'high levels of commercial-scale trade in counterfeit and pirated goods worldwide'. It was negotiated amongst 11 parties including Australia, the US and the nations of the EU. Although primarily negotiated in secret as a trade agreement, several versions were leaked throughout the three-year long process. The first official text was published on April 2010. ACTA was signed in October 2011 by eight countries including Australia and the US.

Despite the title of the agreement, ACTA is not actually a trade agreement, nor it is solely about counterfeit goods. Although negotiated in secret as trade agreements historically have been, ACTA does not seek to promote or facilitate trade. As the JSCOT report concluded, it is actually an IP agreement; despite its purpose of combating 'counterfeit and pirated goods' (often associated with goods that infringe trademarks or copyrights), ACTA has terms applying to all 'intellectual property' (which includes patents, industrial designs and geographical indicators).

What would ACTA actually do?

There has been a lot of confusion over ACTA's possible legal effects. Its defenders insist it merely imposes 'minimum standards' of enforcement while allowing countries to adopt higher standards should it choose to do so; and that it would not require the changes of any laws in the EU, US or Australia.

The Australian Government's assertion that it would not require any change to our laws is questionable, as the JSCOT report noted. The agreement establishes an 'ACTA Committee', comprised of ACTA members, who would be tasked with developing 'best practice guidelines' for the implementation of ACTA's obligations. Where the language of ACTA is vague this committee could influence its interpretation. For example, where article 27.1 requires 'effective action' against infringement in the digital environment, other countries' interpretations of what is 'best practice' may require laws more stringent than that currently adopted in Australia to be implemented.

Similarly unclear is what economic benefits ACTA could have for Australia. JSCOT was heavily critical of the lack of evidence detailing what the actual economic impact of counterfeiting and IP infringement is. In addition the Australian Government has failed to provide any economic evidence of what benefits ACTA will have. As Australia is a net importer of IP goods (such as patented and copyright-protected products), any extensions of IP rights increase the costs of this importation. Thus the Australia-United States Free Trade Agreement ('AUSFTA') which came into force in 2005 and required an increase in our IP standards actually generated a net cost for Australia. Since then the Productivity Commission has recommended that negotiation in relation to IP laws be informed by a robust economic analysis of the size and distribution of the resultant benefits and costs. It may be hard to calculate the political and economic benefits of entering into treaties with the US and other countries. However, as the JSCOT report noted, the Department of Foreign Affairs and Trade failed to include any economic assessment of its possible benefits.

The 'most troubling' aspect of ACTA: its lack of transparency

Although the possible effects ACTA may have are continuing cause for concern, most outrage is directed at the process by which it was negotiated. As the JSCOT report concluded, 'the most troubling aspect throughout the development of ACTA has been the opaque nature of the process'.