Democracy of Sound (40 page)

The Uruguay Round negotiations ran into several dead ends between 1987 and 1994, but the Americans’ determined lobbying ultimately produced the Agreement on Trade Related Intellectual Property Rights (TRIPS). Many leaders in developing countries remained unconvinced that curbing piracy was in the best interests of all, believing that antipiracy measures would privilege American corporations and inhibit their own development. The stubbornness of both sides in the debate stalled progress, as everyone argued over the basic premises of the negotiation. The Americans threatened to push bilateral deals across the board if talks at GATT failed. The process broke down in 1990, but GATT director-general Arthur Dunkel revived it the following year with a new proposal, the so-called Dunkel Draft, which lowered tariffs on a wide variety of goods and mandated stronger protections for intellectual property.
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By this time, resistance to the prospect of a new intellectual property regime had softened somewhat. Leaders in the developing world began to see that multinational corporations looked favorably on nations with better intellectual-property protections as candidates for investment, and GATT officials believed that poorer countries were willing to accede to US demands to keep the North American giant at the negotiating table. Concessions on intellectual property could be a reasonable price to pay if the United States reduced barriers to foreign agricultural products, textiles, and other goods.
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Ironically, business interests in the United States began to have their own doubts by 1990. Some in the American entertainment industry worried that Dunkel’s proposal would prove less effective than bilateral negotiations, which had allowed the United States to pressure other nations into accepting its terms of intellectual property protection. Movie studios complained that the agreement would allow the French to use levies on blank tapes to subsidize their own national film industry, and they also viewed the European practice of setting 51 percent of television time aside for European programs as a restraint of trade.
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Jack Valenti, the tireless MPAA campaigner, did not sleep for three days and even went a day without eating as he fought such provisions. “If these quotas exist,” he said, “this is Armageddon time. I’m on the Hill in a New York minute bringing out every patriot missile, every F-16 in our armory, leading whatever legions we can find to oppose this agreement.”
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Despite these “North-North” struggles, the so-called South still saw the Dunkel Draft as a victory for intellectual property interests in the First World. The proposal required developing countries to accept the fundamental premise that copyrights, patents, trademarks, and trade secrets deserved protection throughout the world. It required them to develop procedures for enforcing
property rights that were more efficient than the legal mechanisms antipiracy campaigners had encountered in countries like Pakistan and Nigeria. The agreement also urged customs officials to hold on to pirate goods seized at borders and stated that piracy “on a commercial scale” should be treated as a criminal, rather than a purely civil, offense. Finally, the deal went beyond setting standards for copyright law, which some countries might formally adopt but fail to carry out. The agreement set up a Dispute Settlement Body that would handle cases of alleged noncompliance through the World Trade Organization (WTO), a new body established to weigh trade disputes between nations.
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The Dunkel Draft also contained concessions to various interests in the developed countries. The United States insisted on an exception to the mandate for “moral rights,” a European concept that recognized the inherent right of an artist not to see his work altered, even when ownership of the work changed hands. The American model of copyright included no such right, allowing whoever purchased the rights to control the fate of the work in question, regardless of the wishes of the original creator. Japan also managed to include in TRIPS an exception for its popular system of renting compact discs. The United States had banned rental of sound recordings (1984) and software (1990), but in Japan, music rental shops were commonplace.
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Developing nations, particularly Brazil and India, attempted to limit the new agreement’s effect on their economies. While acquiescing on the basic issue of intellectual property, the developing bloc pushed for differential treatment for poorer countries and the most limited standards in matters of copyright, patent, and trademark. India’s prime minister Narasimha Rao faced political risks at home; while the Americans pushed tough international standards, many Indians opposed any compromise in the country’s position on intellectual property. Everyone from the Communists to the conservative Bharatiya Janata Party viewed the agreement as bad for the country.
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Though it still raised the ire of many Indians, the Dunkel compromise ceded some ground to critics. TRIPS provided a multitiered system of compliance in which most developing nations would have five years to conform their legal systems to the new standards, while the poorest countries would have a ten-year period to update copyright laws and enforcement mechanisms.
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Rao was not the only head of state to worry about getting the result of the Uruguay Round approved at home. President Bill Clinton also contended with enemies on the left and the right when the agreement reached Congress in 1994. Conservatives Patrick Buchanan and Senator Jesse Helms worried about ceding sovereignty to the WTO—or any other international organization, for that matter—while labor unions, environmentalists, and consumer advocates warned that the WTO could strike down economic regulations as unfair restraints on trade. Hollywood was disappointed with the pact, despite the provisions that
bound developing nations to protect its intellectual property, in large part because Europeans retained the right to limit broadcasts of foreign television.
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California’s Republican governor, Pete Wilson, faxed a warning to Clinton: “We must walk away from a bad GATT agreement.”
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The measure passed because of several factors, not the least of which was a concerted, focused effort by other business advocates to cement the gains made during the Uruguay Round. Pharmaceutical lobbyist Gerald Mossinghoff described the operation as “a full-court press,” with daily lobbying of senators and representatives. Although some liberals were uneasy with the direction of US trade policy, GATT had the support of every key Democrat—the House and Senate majority leaders, the Speaker, and the president—and Clinton’s energetic support helped ensure its passage. If nothing else, certain doleful Democrats could vote for the Uruguay Round Agreements Act when it passed in December 1994, fearing no further electoral consequences. The Republican Party had swept the elections in November, and many Democrats would not be returning to Congress in 1995.
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“It wasn’t a huge fight,” recalled Clinton aide George Stephanopoulos. “We all had bigger problems after that election.”
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The Persistence of Piracy under the New International Regime

Battles over piracy continued both during and after the passage of TRIPS. Several Asian governments scrambled to do more to curb piracy as the diplomatic debate remained unresolved in the early 1990s, because the United States was determined to enforce property rights one way or the other, within GATT or without. “Southeast Asian countries are worried about the Clinton stand,” an official for the record company EMI (Asia) said in 1993. “A year ago piracy was a disaster. Now I think we are rounding the corner.” That year Thailand fired the director of the antipiracy agency that had been set-up under US pressure in the 1980s. He had been doing too little to stifle the illicit trade. Taiwan was still raiding pirate factories, capturing 16,000 compact discs in February 1993. Bilateral negotiations with South Korea were also making progress.
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However, the battle lines shifted once again, as the antipiracy campaigners encountered a foe that was much harder to push around than Singapore or Thailand: China. The IFPI warned in 1994 that China’s pirate factories could produce 60 million recordings a year, a number so great that the Chinese could export bootleg discs and tapes throughout the region.
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The turnabout was ironic: Hong Kong and Taiwan had exported bootleg music to China in the 1980s, and now the People’s Republic was providing Hong Kong with the illicit records it could no longer produce. By 1995 the
Economist
claimed
that China consumed 25 percent of the world’s bootleg discs, and many of its pirated discs ended up in Hong Kong, where authorities had worked hard to curb domestic piracy.
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Despite their political accomplishments, antipiracy crusaders failed to strike a decisive blow against the global illicit market. Yes, many countries had signed on to the 1971 Phonograms Convention. Interpol (ostensibly) joined the fight against audiovisual piracy in 1977. The United States passed one tough copyright law after another and persuaded other countries to do much the same, while the entertainment, fashion, pharmaceutical, and technology industries won the long battle over GATT and TRIPS. They did not, however, vanquish piracy in the developing world. The
Economist
reported in 1995 that pirate recordings were, at least, “no longer on open display” in Thailand, although a visitor to Bangkok in the early twenty-first century can find pirate CDs and DVDs widely available on the street. In Pakistan, the
Economist
estimated that 92 percent of 1994 sales were illicit.
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Pakistanis could get the latest Madonna CD for less then a dollar; and if they did not want all twelve tracks by the Material Girl, they could go to a local shop, pick out the songs they liked best, and have a personal CD or tape mixed. These services were affordable, available, and popular, while a legitimate market for music barely existed. Little had changed by the twenty-first century, as the IIPA estimated that 90 percent of recordings sold in the country during 2003 were illegitimate. “There are no legitimate licensees producing in Pakistan,” an IIPA report said, “or licensed to produce such product in Pakistan … Legitimate domestic demand in Pakistan is dwarfed by the number of discs being produced, meaning Pakistan’s production is destined for export.”
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The Philippines provides an example of a developing nation where licit and illicit markets emerged side by side. Recorded music could be found in the stalls of street markets and the Tower Records in an upscale urban shopping mall. In the early 2000s, anthropologist Jonas Baes noticed how vendors and consumers haggled over pirate CDs on the street in front of the SM City supermall, while other bootleggers sold their goods within sight of the police department. The singer Martin Nievera exhorted consumers to buy the “real” thing in a 2002 TV interview, arguing, “You actually miss out on a lot of things when you buy that garbage.” This expectation—that all Filipinos could easily choose to buy the “orig” CD over the bootleg one—defied reality there as it did in Pakistan or Nigeria. As one teenager told Baes, “I would never be able to buy a beautifully packaged CD of my favorite bands from Tower Records in Makati, but I was able to buy that album I wanted from the stacks of [pirated] CDs in Quiapo.”
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A young man in Queens, New York, echoed the same sentiment twelve years earlier. Holding up a bag of tapes, local resident Marc Anthony told a reporter, “I got five of them here. For those who can’t afford the $9.99 tapes, this helps
them out.” He was standing outside a record store on Jamaica Avenue that had just been raided by the police, minutes after he had made his purchase. Another bystander disagreed. “The rappers are getting robbed real bad,” said Eric Petty. “The police got to bust the whole avenue because we got them on every block.” Petty had invested a lot of money in his car stereo system and considered it pointless to play inferior pirate tapes on it. The raid was spurred by the RIAA, which lobbied the state legislature to toughen antipiracy laws and pestered the police to enforce them. Lawmakers ratcheted up penalties for piracy in November 1990, making it a felony to sell or possess 1,000 or more pirate recordings. The NYPD said it had bigger problems to deal with, but it continued to act on tips from the RIAA, which had been investigating piracy in New York’s discount stores and flea markets for more than six months.
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The RIAA estimated that piracy cost the music business $400 million in 1989. Did that mean that customers like Marc Anthony would have bought $400 million of legitimate recordings at the regular price if cheaper pirate tapes were unavailable? A New York street vendor sold Run-DMC’s
Back from Hell
for $5 in 1990, whereas the record company charged $10 for the cassette. When Anthony visited the store in Jamaica, he walked away with five tapes, saying that he could not afford to buy them at full price. According to the RIAA’s logic, Anthony would have sprung for two $9.99 tapes if he could not get five cassettes for $5 a piece. In this sense, the industry’s astronomical figures might have had some basis in reality.

However, the same principle did not apply for the teenager in the Philippines; her street purchase did not necessarily substitute for a potential sale that Tower Records could have made. Piracy filled a niche for the poor around the world, whether in New York City or Quezon City, providing a product that would otherwise have been less available or completely unavailable. Piracy might have made it easier for Marc Anthony to purchase
more
music, whereas it made it possible for his counterpart in Pakistan to acquire any recordings at all. The latter impulse was always going to be harder to deter than the former.